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The business end
of US, Iran ties
By M K Bhadrakumar
The timing of the Iranian decision to take
the lid off US company Halliburton's involvement
in a giant gas field project in Iran comes at a
point when the school of thinking in the US that
the Bush administration must opt for a policy of
constructive engagement with Tehran has
incrementally gained currency in debates over
Iran, including in conservative think-tanks.
This week, Iran said that a subsidiary of
Halliburton, the Cayman Islands-registered
Halliburton Products & Services Ltd would work
as a sub-contractor with Oriental Kish Co, an
Iranian company, in the South Pars field, believed
to be the world's largest natural gas field.
"Halliburton and Oriental Kish are the
final winners of the tender for drilling South
Pars phases 9 and 10," Pars Oil and Gas Company
managing director Akbar Torkan said, according to
state television. An unnamed Pars company board
member said the deal for the gas fields in the
Persian Gulf off the south coast of Iran was worth
about US$310 million.
The latest instance
of the "engage Iran" school is a US advocacy group
dominated by prominent figures of the Republican
Party, the Committee on the Present Danger (CPD),
which, in a paper titled "Iran: A New Approach"
calls for the re-opening of diplomatic relations
with Tehran, bringing to an end the 25-year
estrangement in US-Iran relations following the
hostage crisis in the American embassy in Tehran
in 1979, shortly after the Islamic revolution of
that year. CPD is co-chaired by the former US
secretary of state George Schultz and former
director of the Central Intelligence Agency James
Woolsey. Indeed, the Bush administration has all
but piped down its rhetoric over Iran lately.
But Iran seems to be seeking some
transparency over the Bush administration's
intentions. Certainly, the deal over South Pars
will be profitable for Texas-based Halliburton.
But Iranians do not want to be treated as a
one-night stand by the Bush administration either.
They would seek a more predictable, enduring,
mutually beneficial relationship with the US -
indeed, they always wanted it.
Washington's reaction to the media "leak"
in Tehran two days back will be keenly watched.
The (multi) million-dollar question is whether the
Halliburton deal constitutes the first meaningful
step of a concerted American diplomatic effort to
engage Iran constructively. The initial reaction
among the American strategic community is that
there's some kind of a "dance" going on here.
According to diplomatic observers, some
degree of calibrated activity in the "green room"
behind the heavily draped stage had been going on
in recent weeks in preparation for the "dance"
concert - the participation of in-coming US
national security advisor Stephen Hadley and
Iranian Foreign Minister Kamal Kharrazi in the
recent conference in Dubai (organized by the
International Institute of Strategic Studies) over
a new regional security architecture for the Gulf
region; the first-ever visit of the librarian of
the US Congress to Tehran, and so on. The pressing
concerns over the Iraqi situation and the
Palestine issue admittedly provide a huge backdrop
to a promising "dance".
What about the
audience of such a concert? Firstly, the Iranian
audience. In the hothouse that Tehran is
inexorably becoming in the coming weeks between
now and the presidential election in June, there
is no foretelling which Iranian political faction
takes a potshot over which other - and, equally
so, whether the "dance" is found to be an
agreeable cultural event by all Iranian factions
alike.
In a hard-hitting speech in Tehran
on January 12, two days after the "leak" over
Halliburton, the influential presidential
candidate and former foreign minister, Dr Ali
Akbar Velayati, seems to have already hastened to
set a benchmark that Iran should keep its "nuclear
achievements" at any price. He criticized those
who might believe that "Iran might gain new things
in case it forsakes its nuclear achievements". He
stressed that "nothing could ever compensate" for
Iran's loss of its nuclear program. He cautioned
his audience about the "manipulative" policies of
the US.
In a manner of speaking, the
larger audiences of Iran's immediate region and
beyond, too, become participants in any such
carnival in Tehran. That is inevitable when the
performer in the lead role happens to be the
world's only superpower. Will "Old Europe" lend
its violins and musicians for the concert and opt
to become a participant? Or will it watch with
envy if Washington chooses to bring to Tehran its
own orchestra? The same holds good for great
powers like Russia and China, for whom an American
overture toward Iran may not be coming as a
surprise, but its timing probably does as they
would stand to be profoundly affected. Indeed,
countries like India, Turkey and Saudi Arabia,
being "natives abroad", likely saw the wind
blowing much beforehand and, arguably, will not be
taken by surprise.
But it is for the newly
independent countries of Central Asia that the
affair should become a case study. For one thing,
they could learn a great deal from Iran. They,
too, possess vast untapped riches of hydrocarbon
reserves and a wealth of minerals. They, too, are
facing a barrage of threats of impending "regime
change". They must relearn the art of dancing.
Big business
The size of the
contract for the development of Iran's Pars 9 and
10 oil and gas fields is obvious from the fact
that the total output of the two phases of the
fields will stand around 50 million cubic meters
of refined natural gas per day for domestic
consumption within Iran; roughly 80,000 barrels of
condensates per day for export; one million tons
of ethane as feed for petrochemical units; 1.05
million tons of liquefied petroleum gas for
export; and 400 tons of sulfur as byproduct.
The project involves earth moving
operations, land preparation, building
construction, concrete work, steel skeleton
pipe-laying and wiring, installation of equipment
and mechanical parts, construction of reservoirs -
all leading to the construction of refineries. The
construction of the refineries itself is estimated
to take 29 months. The development of the two
fields will stretch over 52 months.
According to the Iranian Mehr news agency,
Halliburton is the first American company to have
ever participated in Iran's oil and gas sector in
the entire 25-year period since the Islamic
revolution in Iran in 1979. Halliburton will work
as contractors for Iranian principals. The main
contractor is Pars Oil and Gas Company of Iran.
Halliburton is no ordinary run-of-the-mill
American company from nowhere. It is headquartered
in Houston, Texas and has a distinguished record
as a major contractor of successive US
administrations, whom it served with dedication in
sensitive theaters of American policy, such as
Vietnam, Diego Garcia, Afghanistan and presently
Iraq.
In fact, according to estimates,
Halliburton won $2 billion worth of contracts from
the US government for projects in Iraq in the
calendar year 2003 alone. Halliburton is currently
renovating the oil fields located in southern Iraq
under a 1.2 billion contact with the US
government. Halliburton's multibillion-dollar
contracts in Iraq and Kuwait have drawn heavy
criticism in the past by the congressional
Democrats on the ground that the contracts were
awarded by the Bush administration on a
non-competitive basis.
Halliburton's
proximity to top US officials has been the stuff
of legends in the American media. US Vice
President Dick Cheney himself served as the
company's chief executive officer during the
period from October 1995 until August 2000 when he
agreed to become George W Bush's running mate in
the presidential elections. After leaving
Halliburton, Cheney placed his shares and stock
options in a trust. Cheney claimed that he had
severed all connections with the company, but his
critics vociferously disagree.
According
to a 1995 executive order passed by the Bill
Clinton administration, American companies are
barred from doing business with Iran. In the past
also, controversy had arisen about Halliburton
subsidiary Halliburton Products and Services
having sold $40 million worth of oil services to
Iran. But the US sanctions against Iran do not
cover "independent foreign subsidiaries" - a
description that was apparently applicable to
Halliburton Products and Services, which is
registered in the Cayman Islands.
M
K Bhadrakumar is a former Indian career
diplomat who has served in Islamabad, Kabul,
Tashkent and Moscow.
(Copyright 2005
Asia Times Online Ltd. All rights reserved. Please
contact us for information on sales, syndication and republishing.) |
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