• 5 minutes 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 8 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 12 minutes Will Uncle Sam Step Up and Cut Production
  • 51 mins Trump cancels Denmark visit amid spat over sale of Greenland
  • 6 mins Iran Is Winning Big In The Middle East
  • 1 hour Nor Chicago, nor Detroit: Killings By Police Divide Rio De Janeiro Weary Of Crime
  • 7 hours Not The Onion: Vivienne Westwood Says Greta Thunberg Should Run the World
  • 19 hours Danish Royal Palace ‘Surprised’ By Trump Canceling Trip
  • 2 hours Strong, the Strongest: Audi To Join Mercedes, BMW Development Alliance
  • 9 hours OPEC will consider all options. What options do they have ?
  • 20 hours A legitimate Request: France Wants Progress In Ukraine Before Russia Returns To G7
  • 23 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 22 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 6 hours With Global Warming Greenland is Prime Real Estate
  • 10 hours Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 14 hours What to tell my students
Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Undeterred By Trump Threats, Schlumberger Signs Deal With Iran

Just about everyone right now wants to know where President-elect Donald Trump stands on Iran, and what fate lies ahead for the nuclear deal and the easing of sanctions that have energy companies’ mouths watering—not the least of them oilfield services giant Schlumberger, which has just hedged its bets that sanctions are history despite heavy rhetoric to the contrary.

Schlumberger has signed a memorandum of understanding with the National Iranian South Oil Company for the development of oilfields in Iran’s southern Khouzestan province, making it the second Western energy major to return to Iran after the lifting of most sanctions.

According to the Iranian government, Schlumberger could be involved in up to three Iranian oil fields in an agreement that comes only two weeks after Norway’s DNO oil and gas company also signed an MOU on oilfield development in Iran.

But for Schlumberger, things aren’t that simple.

Just last year, Schlumberger was, for all intents and purposes, banned from investing in Iran for three years. The three-year probation period was part of the company’s plea bargain with the Department of Justice, after a six-year investigation that found the company guilty of having repeatedly violated sanctions against Iran and Sudan.

As part of the bargain, Schlumberger also agreed to a fine of US$155.1 million and gave up US$77.6 million in illegally obtained profits.

There is a way for Schlumberger to legally do business in Iran: the company is registered in the Caribbean and can export equipment to Iran, as long as it has not been manufactured in the U.S. and the company’s operations in the Persian Gulf country do not involve U.S.-based employees or employees who are U.S. citizens.

This deal, however, is not for the export of equipment. According to the Wall Street Journal, a spokesperson for Schlumberger said that the deal was “for the non-disclosure of data required for a technical evaluation of a field development prospect” and does not involve any oilfield services. Related: Is The Permian 20 Billion Barrel Oil Discovery Real?

Even so, it might prove to be a challenging conundrum unless Schlumberger has struck a deal with the relevant authorities to amend its three-year probation conditions. Alternatively, it could possibly wait it out, since the current agreement with the NISOC is only a preliminary one.

There is a possibility that it will never move past the preliminary stage if President-elect Donald Trump goes ahead with his plan to strike down the deal that the West made with Iran last year, and which saw the country “scrap” its nuclear program in exchange for the removal of most economic sanctions.

The uncertainty has both sides on edge.

Trump has referred to the Iran nuclear deal and “one of the worst deals ever negotiated”, but reversing it is not a simple. Nonetheless, Trump has deemed this as his “number 1 priority”.

Trump has also surrounded himself with people who are also on record as wanting to roll back the Iran deal, including Rudolph Giuliani and John Bolton, not to mention the President-elect’s pick for CIA head, Mike Pompeo.

International companies have put their Iran plans on hold because of this uncertainty. As one analyst, RBC global head of commodity strategy, Helima Croft, put it: “The potential reinstatement of U.S. extraterritorial sanctions on Iran is one of the clearest policy implications of the Trump victory.” Related: Shell Considering Dumping Its Iraqi Oil Fields

But at the end of the day, pulling a U-turn on Iran will not sit well with Russia, with whom the President-elect has made pragmatic détente a cornerstone of his campaign.

The only question is, what will persuade Trump more: the benefit to U.S. security interests, cooperative relations with Russia to fight ISIS, or the “hawks he has surrounded himself with”, to borrow a title from the New York Times.

Schlumberger is clearly betting on the status quo as far as Iran is concerned, but the jury is still out in regard to future sanctions on Iran.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play