LONDON – BP has created a new executive committee to explore business in Iran which will exclude its American chief executive Bob Dudley in a bid to avoid potential violations of U.S. sanctions still in place.
Continue Reading Below
The new committee is headed by BP's chief financial officer Brian Gilvary, who is a British national. Gilvary will coordinate the oil major's operations in Iran and any discussions with the country's national oil company, according to industry sources.
The move highlights the lengths to which multinationals will go to exploit lucrative new business in Iran, which is only slowly emerging from years of isolation that crippled the OPEC member's energy-reliant economy.
The election of Donald Trump has added to uncertainty over Tehran's push for foreign investment to revive its economy. The republican president-elect has criticized the 2015 nuclear deal with Iran that curbed Tehran's nuclear ambitions in return for the lifting of some economic sanctions.
A lack of clarity over the terms of new production contracts Tehran has yet to finalize, difficulties facing the banking system due to continued U.S. sanctions, and companies' severe budget constraints due to lower oil prices have kept most firms on the sidelines.
Sanctions imposed by the United States on Iran, which prevent U.S. companies from dealing with Iran, remain in place.
Continue Reading Below
Total was the first major western company to sign a deal with Iran earlier this month on further development of the giant South Pars gas field in the Gulf. Norway's DNO has also agreed to study the development of the Changuleh oil field in western Iran.
BP's new executive committee also includes Bernard Looney, upstream chief executive, who is Irish, Dev Sanyal, chief executive of alternative energy and executive vice president, regions, an Indian national, and General Counsel Rupert Bondy, a Briton.
"The separate governance structure does not involve Bob or any other U.S. citizens and was set up for Bob's own protection," one source said.
A BP spokesman had no immediate comment.
The London-listed oil major has been working to mend its relations with Washington since the deadly 2010 Deepwater Horizon rig explosion in the Gulf of Mexico, and has agreed to pay more than $50 billion in fines and clean up costs. Dudley, who took BP's helm from Tony Hayward shortly after the incident, was instrumental in the process.
BP, which was founded more than a century ago as the Anglo-Persian oil company, has yet to sign any deals with Iran.
Last month, Dudley said: "Iran is a large oil and gas province ... We're going to have to be very careful. We don't want to violate any sanctions."
NIOC has extended the period for international oil companies to submit their pre-qualification documents for Iran's first oil tender until Dec. 4, the state-run firm said on its official website on Monday.
(Reporting by Ron Bousso; editing by Giles Elgood)