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