From Bloomberg, Feb. 23:

President George W. Bush's campaign to turn Iran into an economic pariah is being rebuffed from Spain to Malaysia as countries and companies pursue long-term agreements to tap into the world's second-largest reserves of oil and gas.

Royal Dutch Shell Plc, Europe's largest oil company, and Spain's Repsol YPF SA—which last month signed a new agreement on a three-year-old gas production project, estimated at more than $10 billion—are among those who can ill afford to give up oil and natural-gas projects in Iran, said James Bell, president of Gas Strategies, a London-based consulting firm.

"Companies who want a piece of the action in Iran have no choice but to stay in the long, patient waiting game," Bell said in a telephone interview...

Austria and Switzerland last month signed "memorandums of understanding" for gas deliveries from Iran in 2012 via a pipeline that has yet to be built. In Tehran this month, Indian Foreign Minister Pranab Mukherjee reopened talks on a long-stalled project to pipe in gas from Iran.

Thierry Desmarest, chairman of Paris-based Total SA, Europe's third-biggest oil company, said Feb. 14 that negotiations are continuing with Iran over a major liquefied natural gas project.

[...]

"If a country is going to fall under sanctions and if the sanctions will be strengthened, do you really want to do business with it?" Undersecretary of State for Political Affairs Nicholas Burns said Feb. 14 at the Brookings Institution in Washington. "There are alternatives," such as Kazakhstan, if a country is "looking for energy relationships," he said.

In an interview, Burns cited US-led pressure on financial institutions, which he said is already working. Iranians are "nervous that the financial markets are going to turn away from them, that they're going to see investment dry up," he said. "And we want them to be nervous, frankly."

Congress is also sending warning messages. A Jan. 7 accord for the Malaysian company SKS Ventures to develop two gas fields in Iran prompted Representative Tom Lantos, the new chairman of the House Foreign Affairs Committee, to threaten to hold up a pending U.S.-Malaysia trade agreement. He also called on the Bush administration to impose sanctions against China National Offshore Oil Corp. for its $16 billion oil and gas deal in Iran.

Lantos, a California Democrat who backed legislation to allow exports of nuclear-power technology to India, is also dissatisfied with the Indian government's discussions with Iran on a gas pipeline. Lantos said he supports Bush administration efforts to stop the 2,700-kilometer (1,680-mile) pipeline linking Iran to India via Pakistan.

"Delhi should not do business with an Iran that is relentlessly seeking to acquire nuclear arms, and our dealings with India should be contingent on how it observes this principle," Lantos said in an e-mail...

To many nations, particularly in Europe, Iran has emerged as a key alternative to dependence on Russian gas. Austria's OMV AG is heading a group that has backing from the European Union to build a 5 billion euro ($6.6 billion) pipeline, known as Nabucco, that would go through Turkey into eastern and central Europe.

"Iran would be the ideal partner for us," said OMV's exploration chief, Helmut Langanger, during an auction of Iranian oil-exploration tenders in Vienna Feb. 1. "No company can afford not to look at Iran."

Dozens of oil-company representatives from Europe, India, Russia and China attended the Vienna auction. National Iranian Oil Co. director Gholam Hossein Nozari said the attendance was "a sure sign companies do not cower to U.S. pressure," according to the official IRNA news agency.

Iran has 18 percent of the world's gas reserves, second after Russia, and 11 percent of oil reserves, ranking behind Saudi Arabia. Iran now exports $47 billion worth of oil around the world, except to the US, which has unilateral sanctions in place against it.

[...]

Not all companies have rushed into Iran... US pressure accounted for a decision last September by Tokyo-based Inpex Holdings Inc., Japan's biggest oil explorer, to drop its share in Iran's 26 billion-barrel Azadegan oil field to 10 percent from 75 percent. In the meantime, OAO Lukoil, Russia's largest oil company, agreed in January to take over a majority share.

Jeroen van der Veer, chief executive officer of The Hague- based Shell, said in Feb. 1 comments to reporters in London that as important as Iran's reserves are, "we have all the short-term political concerns."

"We have quite a dilemma," he said.

This also gives us deja vu.