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Page added on April 28, 2007

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Austria courts Iran, angers U.S.

Washington has protested an Austrian oil and gas firm`s investment plans in Iran. However, the Americans won`t have much influence on the deal, observers say.

OMV, Central Europe`s largest oil and gas firm, announced last Saturday it had signed a memorandum of understanding with Iran to jointly develop parts of the gigantic South Pars gas field and cooperate with Iran in producing liquefied natural gas.
The field would be explored by OMV, with LNG transported via container ships to a terminal to be built in Croatia; from there, the gas will be fed into the Austrian and Italian pipeline networks. The total value of the deal has been reportedly estimated by the Iranian Oil Ministry at $18 billion.

With yearly sales of roughly $13 billion, OMV is a major player in Central Europe and has in the past explored in other politically sensitive countries, such as Libya.

Yet what has excited Austrian investors has managed to irritate politicians across the Atlantic.

Earlier this week, Rep. Tom Lantos, D-Calif., chairman of the House Foreign Affairs Committee, warned OMV that under his legislation the company will not escape sanctions if it follows through on the deal to help develop the Iranian field.

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