Outcry Grows in Austria Over Massive Oil Deal With Iran

Oil Firm May Face U.S. Sanctions

By Benjamin Weinthal

Published February 20, 2008, issue of February 22, 2008.
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Berlin - A Nobel Prize-winning author and a Nazi-hunter were among the 3,000 signatories to a petition released last week, protesting a massive oil deal between an Austrian company and Iran.

The $32 billion deal for oil rights, inked by the Vienna-based OMV oil company, appears to be the biggest ever with Iran. Since the deal was signed last year, it has attracted a growing tide of protest. German Chancellor Angela Merkel privately complained in September that the deal set a dangerous precedent. There are also signs that the American government, which has imposed economic sanctions against companies that deal with Iran, may also be looking at the deal.

But it has been the Stop the Bomb campaign, which delivered the petition last week, that has created the most steady pressure — and set the terms of the debate over the propriety of a European company doing business with Iran. The group has pointed to Iran’s treatment of its ethnic minority groups and homosexuals, as well as statements by Iranian President Mahmoud Ahmadinejad threatening Israel and denying the Holocaust.

The controversy over the OMV deal comes at a particularly sensitive time for Austria. It was 70 years ago this March that throngs of Austrians welcomed Adolf Hitler’s annexation of the country. Austria has long been considered a latecomer in grappling with its role in the persecution of Jews during World War II. Now, Austria is facing criticism over its apparent readiness to conduct business with a regime whose president has called for the elimination of the Jewish state.

“Austria has to turn its moral rhetoric into tangible actions if it wants to prove that it has learned its lessons from participating in the greatest mass murder of history,” said Stop the Bomb spokeswoman Simone Dinah Hartmann.

OMV is a particularly susceptible target because it has sponsored a Holocaust remembrance project called Letter to the Stars, in which Austrian students interact with Holocaust survivors.

The Committee of Austrian Jews in Israel demanded that Letter to the Stars sever financial ties with OMV, delete the firm’s logo from its homepage and publicly state there will be no future cooperation with OMV. The request did not go over well with Josef Neumayr, the founder of Letter to the Stars, who says the OMV sponsorship was limited to one exchange program in 2007. In an e-mail written to the Forward, he said the “complex theme of the Iran deal” would “overwhelm our students.”

As a result of this spat, the Committee of Austrian Jews in Israel has declined an invitation to attend the event scheduled in March to mark Hitler’s takeover in Vienna.

The Austrian government has also come under fire because it is the principal stockholder in OMV, with 31.5% of its shares. According to Sven Pusswald, a spokesman for Austrian Chancellor Alfred Gusenbauer, the government will not intervene because OMV is private.

An OMV spokesman, Thomas Huemer, said, “OMV cannot take responsibility for the political situation in a country.” He added that the company is only “responsible for human rights issue in the vicinity of its operation.”

OMV is hardly the only European company that has made oil deals with Iran; in France, President Nicholas Sarkozy has urged a number of companies to abandon deals with Iran.

The OMV deal was signed in 2007 and would allow OMV to develop the South Pars oil fields in Iran. The development has not formally begun, but OMV has already opened an office in Tehran. Austrian government officials have argued that the deal will ensure Austria’s energy security. Among the Austrian public, there is relatively wide support for the deal, according to local observers.

“In Austria there is a very strong consensus that one should continue with this business,” said Doron Rabinovici, an Israeli-Austrian author and historian.

The deal could face its biggest problems due to the American government’s Iran Sanctions Act, which spells out sanctions for companies involved in more than $20 million dollars of annual business in Iran’s energy sector. In the past, the U.S. Treasury Department has worked to force German banks to end their financial transactions with Iran.

A spokesman for the Treasury Department, Andrew De Souza, declined to comment. But a State Department official told the Forward: “We don’t want this deal to move forward.” The State Department official said the OMV deal “might very well” support the Iranian regime.

While this activity goes on behind the scenes, the protestors have continued their public campaign. In late January, 15 members of Stop the Bomb unveiled a banner at the European Gas Conference 2008 that said: “No deals with the Iranian Mullahs.”

The Jewish community of Vienna is not an official sponsor of the campaign but its leadership has been in agreement on the aims.

“Our position is like Stop the Bomb,” said Raimund Fastenbauer, General Secretary of the Jewish Community in Vienna. He added that Iran is “our main priority at the moment.”

The head of the Vienna community, Ariel Muzicant, was among the signatories of the petition last week, as was Austrian Nobel Prize-winning author Elfriede Jelinek and Paris-based Nazi hunter Beate Klarsfeld.

Although the five major Austrian parties support the OMV deal, the Stop the Bomb campaign has persuaded some politicians to break ranks. At the event announcing the petition, Albert Steinhauser, a member of parliament from the Green party joined with the protestors.

“We cannot look the other way while Iran, which is threatening to erase Israel from the map, tries to get an atom bomb,” Steinhauser said.






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