AMBASSADOR DELIVERS UNSC 1737 POINTS TO NORSK

C O N F I D E N T I A L OSLO 000162

SIPDIS

SIPDIS

STATE FOR EUR/NB, ISN, EB, NEA, IO, VCI, P, T
TREASURY FOR TFI

E.O. 12958: DECL: 02/16/2017
TAGS: PREL ENRG EPET ETTC EFIN KNNP IR NO
SUBJECT: AMBASSADOR DELIVERS UNSC 1737 POINTS TO NORSK
HYDRO CEO

REF: A) OSLO 152 B) OSLO 132 C) STATE 14071 D) OSLO

98 AND PREVIOUS

Classified By: Deputy Chief of Mission Kevin M. Johnson for reasons 1.4
b and d.


1. (C) The Ambassador delivered ref C points on February 15
to Norsk Hydro CEO Eivind Reiten. (Note: As indicated in
ref D, Hydro's petroleum sector investments in Iran have been
an ongoing point of discussion between the Embassy and
company. End note.) The Ambassador urged Reiten to
reconsider Hydro's investments in Iran, stressing the need to
keep financial pressure on the regime and pointing out the
rising commercial risk of investing there. Reiten, noting
previous conversations with the Embassy on the issue, said
that Hydro is well aware of USG concerns and following rising
tensions over Iran closely. Hydro is engaged in a continuous
dialogue over its Iran investments on a number of fronts --
with the Embassy, the Norwegian Ministry of Foreign Affairs,
the Norwegian Ambassador to the United States, and EU foreign
policy chief Javier Solana. Reiten underscored the
importance of having all concerned parties "knowing what
we're doing."


2. (C) Reiten said Hydro is in the "unfortunate situation"
of successfully developing a petroleum project in Iran as
the political situation there deteriorates. Hydro is trying
to stay "on the back burner level," keeping its activities
"low key" and trying not to create tensions. The company,
said Reiten, faces a difficult balancing act -- avoiding
high-profile activities but, at the same time, not abandoning
its commercial position, hoping that in the longer term the
political situation will improve. Reiten thought Hydro's
work in Iran helped to "bring the Iranians the right way" by
setting a positive example, but also understood that Teheran
sought to showcase big business deals to present a false
"business as usual" face to the world. Hydro was being
careful not to be drawn into the Iranians' game. Reiten also
acknowledged the risk of investment funds "leaking" to the
regime, but added that Hydro's investment to date is
relatively modest. Noting the rising commercial risks of
doing business in Iran, Reiten said Hydro intended to
"carefully move its projects forward, not investing a lot."


3. (C) Reiten concluded by highlighting Hydro's intention to
send a senior executive to Washington next month for
consultations on Iran and other energy matters with USG
officials. Reiten thought the visit would provide an
excellent opportunity for Hydro to explain its position and
clarify facts while getting Washington's views on the
situation in Iran. (Note: Hydro Senior Vice-President for
International Business Development Torgier Kydland is
expected to visit Washington March 14-15. Post is working
with EB/ESC to set up Kydland's schedule at the Department.
End note.)


4. (C) Separately, visiting USNATO Ambassador delivered our
Iran points to FM Stoere February 16 (septel). Stoere
stressed Norway's desire to keep its communications lines
open with Iran, and noted that EU Secretary General Solana
recently told him he had seen encouraging signs from Iran's
national security advisor. Ambassador Nuland stressed that
international pressure on Iran was key.
WHITNEY