EU Backs France-Iran Gas Deal

The European Union (EU) entered the political fray over a French-led gas deal in Iran by giving its backing Sept. 30 to the venture and rejecting US opposition to it.

EU Trade Commissioner Leon Brittan, in a statement, said the French oil company Total was completely in the right in deciding in favor of the $2 billion project.

He also rejected American legislation permitting economic sanctions to be imposed on third-country companies that invest in Iran and Libya, calling it a violation of international law.

Such legislation is a cause of tension between the EU and the US, and is an obstacle preventing a common strategy toward Iran, Mr. Brittan said, adding that the US law actually plays into the hands of radicals in Tehran's leadership.

The EU stance came a day after Iran and Total divulged the agreement on the gas deal, which was immediately followed by official French backing for it and then official American criticism.

The US regards Iran and Libya as sponsors of terrorism and has passed legislation that would permit punishment of companies that invest more than $40 million in those countries.

Under the deal, the National Iranian Oil Corporation (NIOC) agreed with the consortium consisting of Total, the Russian company Gazprom, and the Malaysian oil firm Petronas to expand Phases 2 and 3 of the Southern Pars gas fields.

During Total's negotiations with NIOC, the US had repeatedly voiced opposition.

In Washington, a State Department spokesman said Sept. 29 that the United States "very much regrets" the deal with Iran.

The US government will investigate the transaction and, if appropriate, will invoke sanctions under US law, he said.

Earlier, French Prime Minister Lionel Jospin welcomed the gas deal Sept. 29 and said France would not abide by the US embargo, saying that "American laws are valid in the United States, not in France."