Eni says its Iran activities could lead to U.S. sanctions

Eni SpA (E), Italy’s biggest oil and natural gas company by volume, said Tuesday its activities in Iran may face U.S. sanctions against investments in the Islamic republic, and they could be material.

Eni said, in its 2012 annual report, that it doesn’t believe its activities in Iran are sanctionable under current U.S. rules but notes it has no formal assurances from the U.S. State Department.

“If sanctions were imposed, their impact could be material and adverse to Eni,” said the Rome-based company.

Eni has operated in Iran for several years as part of four service contracts: South Pars, Darquain, Dorood and Balal. Eni said all the projects have been completed with the exception of Darquain, which is in the process of final commissioning and is being handed over to the national Iranian oil company.

The Italian company’s projects in Iran are in the cost-recovery phase, and it adds it has no plans to make further capital expenditure in the country in future years.

Eni’s daily output in Iran averaged 3,000 barrels of oil equivalent in 2012, representing less than 1% of the company’s total production.

Eni said its refining and marketing division bought 498,000 metric tons of Iranian crude in 2012, paying the country’s state oil company $396 million, less than the $742 million it paid for the 976,000 tons the year before.

Eni hasn’t any involvement in Iran’s refined petroleum sector and doesn’t export refined products to Iran, it added.

By The Wall Street Journal


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