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Monday, March 8, 1999 Published at 03:03 GMT

World: Middle East

Iran courts US oil firms

Tehran is wooing European investors

By BBC Iranian Affairs Reporter Sadeq Saba

Iran has stepped up pressure for an end to United States sanctions by inviting American companies to take part in developing its huge oil and gas industry.

The Iranian Foreign Minister Kamal Kharrazi said they were welcome to bid for future projects.

The United States passed a law in 1996 under which harsh measures can be imposed against any foreign company investing more than $20m dollars in the Iranian oil sector.

But last week, two European oil companies signed a deal with Iran despite Washington's threat of sanctions.

Iran is fully aware that the American oil companies are not happy with their government's current policy on investment in the Iranian oil industry.

Only a few days ago a top American oil executive warned Congress that American firms could not compete on equal terms with companies from Europe.

It is perhaps for this reason that Iranian Foreign Minister Kamal Kharrazi said the American sanctions were only hurting US business interests.

He announced that there was no obstacle from Iran to American companies participating in oil development projects there.

European deals

Mr Kharrazi said the large oil deal with two French and Italian companies last week, and other recent agreements with European firms, have weakened American sanctions against Iran.

He called on the US to come to terms with reality and change what he called its hostile and fruitless policy.

Mr Kharrazi hopes that the invitation to American companies to invest in Iran will put more pressure on Washington to review its sanctions.

The statement comes on the eve of a visit to Italy by the Iranian reformist President Mohammad Khatami which can be seen as a reminder to American companies that they are losing business to their European competitors in the huge Iranian market.

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