Identifier
Created
Classification
Origin
08BAKU1168
2008-12-12 12:08:00
CONFIDENTIAL
Embassy Baku
Cable title:
CORRECTED COPY -- FORMAL REQUEST FOR GUIDANCE
how-toVZCZCXRO4808 RR RUEHAG RUEHBC RUEHDE RUEHDIR RUEHKUK RUEHROV RUEHSR DE RUEHKB #1168 3471208 ZNY CCCCC ZZH R 121208Z DEC 08 FM AMEMBASSY BAKU TO RUEHC/SECSTATE WASHDC 0501 INFO RUCNCIS/CIS COLLECTIVE RUCNMEM/EU MEMBER STATES RUCNIRA/IRAN COLLECTIVE RUEAIIA/CIA WASHINGTON DC RHMFISS/CDR USEUCOM VAIHINGEN GE RHEBAAA/DEPT OF ENERGY WASHDC RUEATRS/DEPT OF TREASURY WASHDC RUEKDIA/DIA WASHDC RHEHNSC/NSC WASHDC
C O N F I D E N T I A L BAKU 001168
SIPDIS
E.O. 12958: DECL: 12/10/2018
TAGS: PGOV PREL AJ IR ENRG
SUBJECT: CORRECTED COPY -- FORMAL REQUEST FOR GUIDANCE
CONCERNING USG EURASIAN ENERGY POLICY AND AZERBAIJAN'S SHAH
DENIZ GAS FIELD
Classified By: CDA Don Lu, Reasons 1.4 (b,d)
C O N F I D E N T I A L BAKU 001168
SIPDIS
E.O. 12958: DECL: 12/10/2018
TAGS: PGOV PREL AJ IR ENRG
SUBJECT: CORRECTED COPY -- FORMAL REQUEST FOR GUIDANCE
CONCERNING USG EURASIAN ENERGY POLICY AND AZERBAIJAN'S SHAH
DENIZ GAS FIELD
Classified By: CDA Don Lu, Reasons 1.4 (b,d)
1. (U) This is an action request. See paragraph 6.
2. (U) On November 26, 2008 the U.S. Department of Treasury's
Office of Foreign Assets Control (OFAC) identified the
National Iranian Oil Company (aka NIOC),Naftiran Intertrade
Company Ltd (aka NICO) and Naftiran Intertrade Company Co.
SARL as entities owned or controlled by the Government of
Iran. This action placed these entities on the list in the
Iranian Transactions Regulations (ITR) of entities determined
by OFAC to be owned or controlled by the Government of Iran.
3. (U) According to the bulletin announcing this
listing,(www.ustreas.gov/press/releases/hp122 9.htm) "while
the ITR do not impose an asset freeze, they do prohibit most
commercial and financial transactions with entities owned and
controlled by the Government of Iran . . . the ITR prohibit
most transactions with NIOC, NICO and NICO Sarl, in any
locations worldwide, because these companies are entities
owned or controlled by the Government of Iran."
4. (U) NICO is a ten percent owner of the Shah Deniz
Consortium, a consortium of international companies
developing Azerbaijan's offshore Shah Deniz gas field and
operating the South Caucus Pipeline which transports most of
this gas to Turkey and Georgia. Other Consortium members are
BP (25.5 percent),Statoil (25.5),Total (10),SOCAR (10),
LukAgip (10),and TPAO (9). In addition to a ten percent
share of Shah Deniz gas production, as a consortium member
NICO is also entitled to ten percent of the field,s
substantial oil condensate production (currently the most
profitable part of the Shah Deniz operation).
5. (U) Heretofore, one of the key pillars of the USG Eurasian
energy policy has been to encourage the GOAJ and the Shah
Deniz Consortium to develop the second stage of the Shah
Deniz gas field (SD2) in order to provide sufficient gas to
sanction at least one pipeline project to deliver gas to
European markets, be it Nabucco, TGI or another commercially
viable pipeline. Doing so would help diversify European
energy supply and decrease its reliance on a single source of
gas, in this case gas supplied from Gazprom.
6. (C) Given the November 26 listing mentioned above, Embassy
asks for formal guidance as to whether its advocacy and
promulgation of SD2 gas sales to European companies can in
any way be construed as advocating commercial transactions
with a commercial entity at least partially controlled by the
Government of Iran, and if so, whether it should cease all
such attempts to advocate and work towards this end.
LU
SIPDIS
E.O. 12958: DECL: 12/10/2018
TAGS: PGOV PREL AJ IR ENRG
SUBJECT: CORRECTED COPY -- FORMAL REQUEST FOR GUIDANCE
CONCERNING USG EURASIAN ENERGY POLICY AND AZERBAIJAN'S SHAH
DENIZ GAS FIELD
Classified By: CDA Don Lu, Reasons 1.4 (b,d)
1. (U) This is an action request. See paragraph 6.
2. (U) On November 26, 2008 the U.S. Department of Treasury's
Office of Foreign Assets Control (OFAC) identified the
National Iranian Oil Company (aka NIOC),Naftiran Intertrade
Company Ltd (aka NICO) and Naftiran Intertrade Company Co.
SARL as entities owned or controlled by the Government of
Iran. This action placed these entities on the list in the
Iranian Transactions Regulations (ITR) of entities determined
by OFAC to be owned or controlled by the Government of Iran.
3. (U) According to the bulletin announcing this
listing,(www.ustreas.gov/press/releases/hp122 9.htm) "while
the ITR do not impose an asset freeze, they do prohibit most
commercial and financial transactions with entities owned and
controlled by the Government of Iran . . . the ITR prohibit
most transactions with NIOC, NICO and NICO Sarl, in any
locations worldwide, because these companies are entities
owned or controlled by the Government of Iran."
4. (U) NICO is a ten percent owner of the Shah Deniz
Consortium, a consortium of international companies
developing Azerbaijan's offshore Shah Deniz gas field and
operating the South Caucus Pipeline which transports most of
this gas to Turkey and Georgia. Other Consortium members are
BP (25.5 percent),Statoil (25.5),Total (10),SOCAR (10),
LukAgip (10),and TPAO (9). In addition to a ten percent
share of Shah Deniz gas production, as a consortium member
NICO is also entitled to ten percent of the field,s
substantial oil condensate production (currently the most
profitable part of the Shah Deniz operation).
5. (U) Heretofore, one of the key pillars of the USG Eurasian
energy policy has been to encourage the GOAJ and the Shah
Deniz Consortium to develop the second stage of the Shah
Deniz gas field (SD2) in order to provide sufficient gas to
sanction at least one pipeline project to deliver gas to
European markets, be it Nabucco, TGI or another commercially
viable pipeline. Doing so would help diversify European
energy supply and decrease its reliance on a single source of
gas, in this case gas supplied from Gazprom.
6. (C) Given the November 26 listing mentioned above, Embassy
asks for formal guidance as to whether its advocacy and
promulgation of SD2 gas sales to European companies can in
any way be construed as advocating commercial transactions
with a commercial entity at least partially controlled by the
Government of Iran, and if so, whether it should cease all
such attempts to advocate and work towards this end.
LU