Malaysia clear on South Pars project

Malaysia has reiterated that Petronas had not contravened any laws or any World Trade Organisation regulations by participating in the consortium to develop the South Pars Gas Field in Iran.
The message was conveyed to visiting US Deputy Assistant Secretary of State for Energy, Sanctions and Commodities William C. Ramsay during a meeting with Wisma Putra officials led by Under Secretary for Americas Division Datuk John Tenewi Nuek.
The US is against the Iran gas project, involving Petronas, France's Total SA and Russian Gazprom signed last September, which it said violated the Iran and Libya Sanctions Act of 1996.
Reading a statement after the meeting, Nuek said Malaysia did not accept the extra-territorial application sought by the US Government to apply the Act beyond its boundaries.
On the Petronas investment, he said although the Malaysian Government is a principal stake holder, Petronas is deemed to be a private business enterprise driven by market forces and its own business priorities. "Malaysia holds the view that Petronas, in participating in the consortium to develop the gas field in Iran, has not contravened Malaysian laws or any international laws or any World Trade Organisation regulations."
He added that Petronas and other Malaysian companies would continue to invest abroad wherever economic opportunities exist, including in Iran and Libya.
Despite the differences between Malaysia and the US on the interpretation of the US legislation, Nuek said both sides agreed that the foundations of Malaysia-US relations remained strong.
Nuek said Ramsay briefed Malaysian officials that the Act contained provisions for sanctions to be imposed by the US against foreign companies making investments beyond $ 20 million in the oil and gas sector of the targeted countries.
It was further clarified that the Act also provided the US President with the discretion to waive or delay the imposition of sanctions under certain circumstances.
Ramsay when met earlier, said the US Government had not decided on any course of action regarding Petronas' investment in Iran and that it would continue to hold dialogue with Malaysia. "There has been no change in this programme. We have not made any decisions. We have not excluded any options. We will continue our dialogue with Malaysia," he said.
It was reported that the chairman of the House International Relations Committee Benjamin Gilman, a New York Republican has criticised the US administration for taking too long to reach a decision. Gilman told President Bill Clinton that his administration had three weeks to decide whether foreign companies have violated the US law.
Petronas president and chief executive Mohd Hassan Marican had said there was no delay in funding or scheduling for the Iran project despite the regional economic problem.