Iran General News2 multinationals pull back from Iran

2 multinationals pull back from Iran

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ImageNew York Times: Royal Dutch Shell and Ingersoll-Rand this week became the latest major corporations to announce they would cease or cut back business operations in Iran. The New York Times

By RON NIXON

ImageRoyal Dutch Shell and Ingersoll-Rand this week became the latest major corporations to announce they would cease or cut back business operations in Iran.

The announcements came as the United States and its European allies stepped up their efforts to win a tough new round of United Nations sanctions aimed at pressing Iran to rein in its nuclear program.

Over the weekend, The New York Times reported that over the past 10 years, the federal government gave more than $107 billion in contract payments, grants and other benefits to foreign and multinational American companies while they were doing business in Iran. Among them were Shell and Ingersoll-Rand.

On Wednesday, Shell announced that it had stopped selling gasoline to Iran, which despite its vast petroleum reserves has antiquated refineries that leave it dependent on gasoline imports. Shell said it had not supplied gasoline since last year.

“We have stopped all sales of gasoline to Iran,” said David Williams, a Shell spokesman at corporate headquarters in The Hague.

The decision, however, does not apply to Shell’s other business interests in Iran.

Royal Dutch Shell signed an $800 million deal in 1999 to develop two huge oil fields. The project was completed in 2005, but Shell continues to receive payments as a result of its work.

Shell has a Iranian natural gas development project in the works, but it is awaiting the results of a feasibility study before determining whether to proceed with it, Mr. Williams said.

Ingersoll-Rand P.L.C., a multinational company that makes air compressors and cooling systems, said Monday that it would no longer allow its foreign subsidiaries to sell parts or products to Iran. The company announced its decision in a letter to United Against Nuclear Iran, a group based in New York that lobbies against companies that do business with Iran. The group was also instrumental in trying to get Shell to withdraw.

A spokesman for Ingersoll-Rand, Paul Dickard, said in an interview on Wednesday: “We’ve been looking at the development for some time, and when we saw a number of companies make this decision, our withdrawal became imminent. Unless there is a regime change, we are completely out of Iran.”

The Times reported that more than two-thirds of the $107.8 billion in government benefits went to companies doing business in Iran’s energy industry, a huge source of revenue for the Iranian government and a stronghold of the increasingly powerful Islamic Revolutionary Guards Corps, a primary focus of the Obama administration’s proposed sanctions because it oversees Iran’s nuclear and missile programs.

Several companies have recently decided to pull out of Iran because of pressure from the United States and its allies, shareholder divestment campaigns and the difficulty of doing business with Iran’s government.

Several other companies, including Vitol Holding B. V.; Trafigura; and Glencore International AG, commodities traders based in Switzerland, recently announced that they had stopped gasoline sales to Iran.

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