Malaysian firm shrugs off U.S. sanction threat
Malaysian firm shrugs off U.S. sanction threat
KUALA LUMPUR (Reuters): Malaysia's state oil company said yesterday it would go ahead with a planned US$2 billion gas project in Iran with French and Russian partners despite the threat of U.S. sanctions.
"We will continue with the plans we have made, so far as Iran is concerned," Petroliam Nasional Bhd (Petronas) president Mohamed Hassan Marican told a news conference in Kuala Lumpur.
Washington says the gas deal involving Petronas, France's Total SA and Russia's Gazprom and signed last September violates the Iran and Libya Sanctions Act of 1996.
The law requires the president to impose sanctions on any foreign company that invests $20 million or more a year in Iran's oil and gas sector.
Deputy Assistant Secretary for Energy, Sanctions and Commodities William Ramsay was due to arrive in Kuala Lumpur on Wednesday for talks on the deal.
Asked if Malaysia's economic slowdown would prompt the firm to reconsider the project, Mohamed Hassan said: "No impact on the schedule."
He added: "Ramsay's visit to Malaysia is Ramsay's visit to Malaysia. There's nothing planned for us."
Ramsay was due to meet government and Petronas officials, diplomats said, but the U.S. embassy, the Malaysian Foreign Ministry and Petronas were tight-lipped about his schedule.
The U.S. State Department has also been reviewing whether a separate $180 million deal in Iran's energy sector between Indonesia's Bakrie Minorak Petroleum and Canada's Bow Valley Energy Ltd violates the law.
The State Department said last week that the administration was reviewing whether the Asian economic crisis could cause Petronas and Bakrie Minorak Petroleum to abandon their plans to invest in Iran.
The Washington Post said last month that some U.S. officials believed Malaysia might be re-evaluating Petronas's commitment because of a desire to "keep its dollars at home".
"A Petronas pullout might undo the entire deal, obviating the need for controversial decisions in Washington," the newspaper said.
Industry sources in Kuala Lumpur said Ramsay might try to explore an alternative investment for Petronas that would involve exporting natural gas from Turkmenistan through the Caspian sea.