Shah Deniz gas field to stay exempt from Iran sanctions

BP Plc (BP/) believes its Shah Deniz natural-gas field off the coast of Azerbaijan will remain exempted from U.S. and European Union sanctions on Iran.

“We are confident at the moment that we will not be captured by any change or escalation in the sanctions process,” Steve Garlick, a marketing manager for BP on Shah Deniz, said at the Energy Exchange’s European Gas Conference 2012 in Vienna today.

Tehran-based Naftiran Intertrade Co. has a 10 percent stake in Azerbaijan’s biggest gas field that may help supply fuel to the 7.9 billion-euro ($10.9 billion) planned Nabucco link and bring gas to Europe via Turkey from 2015.

The European Union will ban Iranian oil imports from July and freeze assets of the central bank and eight other entities. The U.S. has also imposed restrictions on financial transactions with Iran and its officials are touring the world to boost support for the measures. Iran was already under four sets of United Nations Security Council sanctions.

“Obviously the situation is being monitored and we are actively involved with various political bodies and lobbyists and attempting to understand exactly what does this legislation mean for Shah Deniz,” Garlick said. “There is at the moment an exemption, whether that exemption actually holds remains to be seen,” he said adding that “big projects like this are all about risk and about managing risk and the Iranian sanctions are a risk that we are having to manage.”

BP and Statoil ASA (STL) each own stakes of 25.5 percent in Shah Deniz. Other partners with 10 percent stakes are State Oil Co. of Azerbaijan, OAO Lukoil (LKOH), Naftiran Intertrade Co. and Total. Turkiye Petrolleri AO owns 9 percent.

To contact the editor responsible for this story: Zoe Schneeweiss at [email protected]