FRENCH CONSIDERING RENEWED APPROACH TO AUSTRIA ON

C O N F I D E N T I A L VIENNA 001796 SIPDIS E.O. 12958: DECL: 12/05/2023 TAGS: PREL IR FR AU SUBJECT: FRENCH CONSIDERING RENEWED APPROACH TO AUSTRIA ON IRAN TIES; SKEPTICAL OF NABUCCO VALUE Classified By: Econ/Pol Counselor Dean Yap. Reason: 1.4(b) and (d) ¶1. (C) Summary. Incoming French Embassy DCM reported Dec. 5 that France is considering a joint approach together with the UK, Germany, and perhaps the U.S., to Austria on several aspects of Austrian-Iranian relations: possible gas activities, to include the Nabucco pipeline, lack of support for enhanced EU sanctions, and ongoing financial activities by Austrian banks. End Summary. ¶2. (C) Newly arrived French DCM Jean-Paul Guihaume (protect) told Econ/Pol Counselor on Dec. 5 that Austrian relations with Iran were a major issue for Paris and that the French were considering whether to approach the British and Germans, and possibly the U.S. as well, about making a joint approach to the Austrians on these concerns. He outlined the following problem areas: Energy: The French are worried about plans by Austrian energy firm OMV to invest in Iran's energy sector, both in exploration/development of the South Pars field and construction of a related LNG facility and through the Nabucco pipeline's possible transport of Iranian gas. French contacts with the GoA thus far had only elicited statements that, as OMV is a private firm not engaged in illegal activities, the GoA could do nothing. Sanctions: Guihaume noted that the Austrians are among a small group of EU members which continue to object to strengthening EU sanctions. He maintained that the EU-3 are not aiming at autonomous EU measures, but rather at introducing measures supplementary to UN sanctions. He expressed great frustration with Austrian legal posturing. Financial Ties: Paris, Guihaume reported, was focusing on cutting Iran's ties to European financial institutions and Austrian bank activities were a significant concern. ¶3. (C) E/P Counselor noted a wide overlap of U.S. and French views on these matters. With regard to energy, however, E/P Counselor noted that U.S. contacts with both GoA and OMV indicated that the firm had no plans in the near- to mid-term for moving forward with Iran. The Nabucco consortium was actively exploring non-Iranian gas sources for the pipeline, and had received some positive signals in recent months. Moreover, the firm was well aware of the political and economic difficulties of dealing with Iran and, was seeking to preserve its options for the future, rather than complete and implement the South Pars "heads of agreement" from early ¶2007. ¶4. (C) Guihaume responded that France was skeptical about Nabucco's value and prospects. "Some of the governments" involved were not reliable, he said, and France judges there was little chance of securing gas supplies from sources other than Iran. Moreover, he said, France did not believe that Russia intends to use its energy deliveries as a tool to win political leverage over the EU. Econ/Pol noted France's relative independence of Russian energy and pointed to South Stream and Russian treatment of Ukraine as evidence that Russian energy policy was motivated by political as well as commercial considerations. Guihaume acknowledged that Russia was using energy as a political tool in its relations with the FSU, but implied that France did not see a direct threat for EU members. GIRARD-DICARLO