Identifier
Created
Classification
Origin
03THEHAGUE2290
2003-09-11 17:04:00
CONFIDENTIAL
Embassy The Hague
Cable title:  

ILSA: IRAN-AZADEGAN DEMARCHE DELIVERED TO ROYAL

Tags:  ENRG EPET ETTC IR JA NL UK 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L THE HAGUE 002290 

SIPDIS

EUR/UBI, EB/ESC FOR DAS BORG AND J.EIGHMIE

E.O. 12958: DECL: 09/10/2008
TAGS: ENRG EPET ETTC IR JA NL UK
SUBJECT: ILSA: IRAN-AZADEGAN DEMARCHE DELIVERED TO ROYAL
DUTCH SHELL

REF: STATE 256533

Classified By: AMBASSADOR CLIFFORD M. SOBEL FOR REASONS 1.5 (B) AND (D)

C O N F I D E N T I A L THE HAGUE 002290

SIPDIS

EUR/UBI, EB/ESC FOR DAS BORG AND J.EIGHMIE

E.O. 12958: DECL: 09/10/2008
TAGS: ENRG EPET ETTC IR JA NL UK
SUBJECT: ILSA: IRAN-AZADEGAN DEMARCHE DELIVERED TO ROYAL
DUTCH SHELL

REF: STATE 256533

Classified By: AMBASSADOR CLIFFORD M. SOBEL FOR REASONS 1.5 (B) AND (D)


1. (C) Summary. Senior Shell Advisor Gavin Graham
confirmed that Shell has no plans to make a proposal or
tender for the Azadegan oil field independent of the
Japanese. Shell does not feel the time is right to make
deals in Iran, and is wary of undermining its relationship
with the Japanese companies. Shell hopes to be a player in
Iran on an estimated horizon of five years from now, but only
if conditions are right. End Summary.


2. (C) On September 10, EconCouns delivered ref demarche
on Azadegan oil field investment to Dr. Gavin Graham, Senior
Regional Adviser to Middle East, CIS, and South Asia at Royal
Dutch Shell's Exploration and Production Division. EconCouns
conveyed the Department's appreciation for the "heads up"
from Shell's Washington representatives and passed a copy of
Ambassador Brill's September 9 statement to the IAEA to
illustrate USG concerns, also noting the parallel European
proposals to the IAEA board. Graham confirmed that the
Iranians had asked Shell and a number of other companies
(Russian/Chinese/other) to bid on the Azadegan oil field.
Shell will not take up the Iranians' invitation for an
independent bid due to (a) USG sensitivities, and (b) a
desire not to undercut the Japanese companies with whom Shell
has been working on the project.


3. (C) Graham speculated that the Iranian move, which
came as a surprise, was intended to turn up the competitive
pressure on the Japanese consortium (confirming points in ref
A). Graham commented that the Japanese were concerned about
the development, but should not be because they had perhaps a
2-year head start on any potential newcomer into the project.
Graham said the move shows the Iranian government's tendency
to try to bargain with foreign entities -- not just on
energy, but on a variety of matters. At the same time,
Iran's oil industry decisionmakers are by and large highly
competent technocrats eager to "get things right," that is,
to conduct business at a level and in a manner fitting of the
developed world.


4. (C) Graham explained that Shell has a long-range
perspective: it wants to remain engaged ("keep the balloon
in the air") and hoped that in 5 years Iran would be a much
more promising environment, but that for now Shell was
looking at prospects warily. Iran is attractive to Shell for
its massive reserves, educated workforce, and need for
foreign investment. However, in order for Shell to
participate in an Azadegan deal, Graham reiterated that three
conditions must be in place: the deal must be commercially
viable, and Iran must have better internal and external
political environments.
SOBEL