Exxon Mobil Corp. is ramping up efforts to track U.S. government work on Iranian sanctions that have locked out American oil companies from the Middle Eastern nation for more than three decades.
Exxon, the world’s largest publicly traded crude producer by market value, hired the lobbying firm founded by former Senator Don Nickles, an Oklahoma Republican, to monitor activity related to Iranian sanctions, according to federal disclosure documents. This is the first time since 2010 that the Irving, Texas-based oil company enlisted outside lobbyists to discuss Iran.
Western energy companies are eager to tap Iranian fields that are among the biggest and cheapest to exploit in the world, said Morningstar Inc.’s Allen Good. Iran nationalized oil production in the 1970s. Sanctions imposed after the 1979 Islamic Revolution and later over the country’s nuclear ambitions have kept the country largely off-limits to American firms. Iran is home to the world’s fourth-largest oil reserves and second-biggest cache of natural gas.
“Given sanctions and the dilapidation of oilfields over time, it looks like it’d be a lot of work” for foreign companies to revive production, said Good, a Chicago-based analyst at Morningstar. “But unlike Iraq, you’d don’t have a civil war going on so it’d be an easier path to growing production. You could get a pretty good bump pretty quickly.”
Exxon said the activities Nickles was hired to carry out, disclosed in an April 16 federal “Lobbying Report” filing, fall short of lobbying.
“We are not lobbying on Iran sanctions,” Alan Jeffers, an Exxon spokesman, said during a telephone interview on Thursday. “We are monitoring activities related to Iran in the U.S. government.”
In a statement, Nickles said his firm has represented Exxon for a decade, and would review their lobbying disclosure form to be sure it accurately describes the work they’re doing related to Iran.
“We are not influencing or advocating in any way on Iran sanctions; our work with regard to Iran has involved only monitoring legislative activity in the U.S. Congress dealing with that sanctions regime.”
European oil executives have started courting Iran in anticipation of sanctions relief. On Thursday, Eni SpA Chief Executive Officer Claudio Descalzi said he traveled to Tehran two weeks ago.
Descalzi told Italian newspaper La Repubblica that the Persian Gulf country could “start attracting investment” from foreign companies again if a nuclear deal was sealed.
Iranian Oil Minister Bijan Namdar Zanganeh previously touted the idea of working with Exxon in a post-sanctions environment. Tehran tried to lure the American oil industry back into the country in 1995, reaching a $1 billion deal with Conoco that was almost immediately scrapped under pressure from the White House.
After that false start, Iran turned to European oil majors, including Eni, Total SA and Royal Dutch Shell Plc, as well as some Asian companies. The European companies left the country in the early 2000s after the U.S. and the European Union imposed new sanctions on Iran.
Iran and the U.S. face a self-imposed deadline of June 30 to reach a final nuclear agreement that allows the gradual lifting of sanctions. A deal could open the doors to billions of dollars in investments by foreign oil companies.
A forerunner of Exxon, Standard Oil of New Jersey, first invested in Iran in 1947. In 1954 it became part of a group of eight foreign companies known as the Iranian Oil Participants that ran the day-to-day operations of the country’s petroleum industry for the next two decades until the industry was nationalized.