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Viewing cable 10OSLO96, Norwegian Company Claims Minimal Business in Iran, Reflects

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Reference ID Created Released Classification Origin
10OSLO96 2010-02-19 14:54 2011-08-24 01:00 UNCLASSIFIED Embassy Oslo
VZCZCXYZ0488
RR RUEHWEB

DE RUEHNY #0096 0501505
ZNR UUUUU ZZH
R 191454Z FEB 10
FM AMEMBASSY OSLO
TO RUEHC/SECSTATE WASHDC 0042
INFO IRAN COLLECTIVE
RUEHUL/AMEMBASSY SEOUL 0001
UNCLAS OSLO 000096 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EPET NO ETTC IR
SUBJECT: Norwegian Company Claims Minimal Business in Iran, Reflects 
on Continental Shelf Development (SBU) 
 
REF: 11/27/2009 HAMMANG/MCKERNAN EMAIL 
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 
Hyundai. 
 
3. (SBU) Lindbaek introduced the company and its operations. Aker 
Solutions (www.akersolutions.com) 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. 
WHITE