Iran Daily: General Electric Joins Withdrawal from Tehran

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General Electric is the latest international company to end its business with Iran, following US withdrawal from the July 2015 nuclear deal and the prospect of expanded American sanctions.

GE said it is planning to end sales of oil and gas equipment later this year in Iran, halting its ambitions after the deal for a stake in the Islamic Republic’s energy sector.

Last November, the US-based firm signed an agreement with Iran’s MAPNA Group for up to $150 million in bids for pipelines, compressors, and subsea equipment. Company officials said those plans have been all but abandoned in the way of Donald Trump’s May 8 announcement of American withdrawal from the Joint Comprehensive Plan of Action. A small office in Tehran has been close and the company’s logo removed from the entrance.

Baker Hughes, an energy-equipment company bought by GE last year, has told Iranian merchants to make no deals for deliveries after November 4, the Trump Administration’s deadline for any companies with American links to end business with Iran.

“We are adapting our activities in Iran as necessary to conform with recent changes in US law,” a GE spokeswoman said. “GE’s activities in Iran to date have been limited and in compliance with US government rules, licenses and policies.”

GE and other firms had been allowed to work in Iran if they used foreign subsidiaries walled off from their US operations, with no American employees.

GE follows French energy giant Total, German industrial conglomerate Siemens, German insurer Allianz, and the shipping company Maersk in announcing suspension of projects. France’s Airbus — whose plan to deliver 100 passenger planes to Iran was already stalled because of existing restrictions on financial transactions — has said the January 2016 agreement is now in limbo.

Earlier this week Russia’s Lukoil and India’s refiner Reliance Industries also said they are halting their work with the Islamic Republic.

See Iran Daily, May 31: Russian, Indian Oil Firms Suspend Projects Amid US Sanctions Threat

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3 COMMENTS

  1. An American company pulling out of Iran? Shocker!

    Iranian firms can make the same oil equipment although perhaps not to the same quality and standard. From personal experience, having worked in the supply of precision industrial components, I know that MAPNA prefers foreign-made goods (they tend to last longer and fail less frequently) but has turned to domestic and black market suppliers when it cannot source them.

  2. Iranian oil exports expected to drop by 500,000 bpd according to some analysts. Here’s how Iran makes it up:

    1. Exporting 250,000 bpd to Russia as part of a 2014 barter agreement (still not implemented) in exchange for Russian goods like grains, machinery and metals. Some of the oil is sent to Russian refineries, which will export the refined products, and some to Russian oil traders.

    2. Exporting another 125,000 bpd to China on top of 725,000 bpd currently shipped.

    3. Selling 75,000 bpd to Iraq which will be sold to third parties as Iraqi oil.

    4. Selling 50,000 bpd to private oil traders who will ship it to any refinery in the world that wants it.

    Iran could also find new customers beyond the limited number it currently does business with.

  3. India’s refiner Reliance Industries also said they are halting their work with the Islamic Republic.

    That’s not confirmed. It is based on “sources” close to the company, according to the Reuters agency.

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