Cablegate: Norwegian Company Claims Minimal Business in Iran, Reflects


DE RUEHNY #0096 0501505
R 191454Z FEB 10



E.O. 12958: N/A
SUBJECT: Norwegian Company Claims Minimal Business in Iran, Reflects
on Continental Shelf Development (SBU)

1. (SBU) Summary: In a February 10 meeting, representatives of
Norwegian engineering and construction services company Aker
Solutions told Emboffs that it has only marginal business with
Iran's oil and gas sector. We also discussed GON industrial policy
and Aker's recent failure to win a contract to develop the Goliat
offshore oil field in the Barents Sea. End Summary.

2. (U) On February 10, Acting PolEconCouns, Econ Specialist and
Intern met with Senior VP Jannik Lindbaek Jr and Chief of Staff
Niels Buch of Aker Solutions, to discuss the company's interests
and involvement in the Iranian energy sector, as well as the loss
of a major Barents Sea supply contract to South Korean competitor

3. (SBU) Lindbaek introduced the company and its operations. Aker
Solutions ( is a global provider of
engineering and construction services, technology products and has
various investments in oil and gas, refining, mining and energy.
The company is present in 30 countries, including the U.S., and
employs a staff upwards of 22,000. The Government of Norway (GON)
holds a 30 percent stake in the company, but does not exert any
direct influence. However, Lindbaek commented that the state
maintained a share in Aker and other companies in these sectors to
promote a long-term outlook and stable ownership and employment.

4. (SBU) Acting PolEconCouns briefed Aker representatives about the
Iran Sanctions Act and draft legislation to further restrict trade
and investment with and in Iran. He inquired about the company's
operations in Iran, specifically the company's participation in
developing the South Pars Phases 9 and 10 gas fields. Note:
Information on this was included in ref email. End Note. Lindbaek
told us that, despite press announcements of breakthrough deal for
the company, Aker never went ahead with this project led by Korean
companies. Currently, Aker provides engineering equipment to
operators in the Iranian energy sector, but this is a very minor
part of the company's operations (no offices or personnel on the
ground). Total contract value may be below the USD 20 million
sanctions ceiling, though Lindbaek did not have a precise figure
for Aker sales. The representatives also said that Aker Solutions
directs significant resources and attention to country risk
assessment, and cooperates closely with the Norwegian MFA. The
company's Houston office monitors the progress of sanctions
legislation, but Buch stressed that they would appreciate staying
in touch with Post as well.

5. (SBU) Aker Solutions recently lost a major Barents Sea supply
contract - involving development of the Goliat oil field - to
Hyundai, and though disappointed, Buch stated that the company had
already moved on to other projects. They believed the main reason
for losing the contract was the labor cost differential in favor of
the South Koreans. However, Buch suspects Hyundai might not be
able to perform well in the extreme climatic conditions of the
Barents Sea. Note: Norwegian broadcaster NRK reported the
following morning that despite Hyundai winning the formal contract,
some fifty percent of the project's contracts will likely go to
Norwegian suppliers. This will have less impact on Norwegian
suppliers than previously reported. End Note.

© Scoop Media

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