[A-List] U.S. Funds Pressure Oil Companies over Their Iran Links

["Yoshie Furuhashi" <critical.montages@xxxxxxxxx>]

It is merely an academic boycott here and a religious divestment there
that have been debated regarding the Israeli occupation; but, when it
comes to Iran, some major institutional investors are already flexing
their financial muscle.  Boycotts and sanctions, I'm afraid, are a
game that inherently favors the most powerful.  Liberals and leftists
have yet to see that.  -- Yoshie

<http://www.iht.com/articles/2007/07/25/bloomberg/links.php>
U.S. funds pressure oil companies over their Iran links
By Jad Mouawad
Wednesday, July 25, 2007

NEW YORK: As American and European governments debate how to deal with
Iran's nuclear program, some of the largest public pension funds in
the United States are leaning on European and Asian oil companies to
reconsider their investments in Iran.

In letters citing the risk that international sanctions might
jeopardize their investments, a coalition of funds from New York,
California, North Carolina and Illinois has warned eight foreign
energy companies working in Iran about investing there.

These pensions, which include New York City's five main funds and the
California Public Employees' Retirement System, hold $3.7 billion
worth of shares in energy companies involved in Iran, out of a total
$570 billion in assets.

The two-page letters were sent to the chief executives of Royal Dutch
Shell, Total of France, Repsol of Spain, Eni of Italy and Gazprom of
Russia. In Asia, they were sent to the China National Petroleum, Oil &
Natural Gas Corp. of India and Inpex of Japan.

A growing number of U.S. municipalities and legislatures are seeking
ways to bar state investments in places like Iran and Sudan. Recently,
Florida passed the country's first such measure and others, like
California and Texas, are considering similar ones.

Pension funds usually oppose these efforts, which they see as
curtailing their ability to invest.

They also point out that long-term investors very rarely divest
themselves of any of their holdings. But the funds in the coalition
are taking their concerns to the companies directly, seeking to reduce
their risks.

"It is increasingly likely that the worsening situation and tightening
economic sanctions will negatively impact companies doing business
there," said the letters, which referred to Iran as a "state sponsor
of terrorism."

The companies were asked to respond about their plans by Aug. 31.

The public strategy is reminiscent of a similar campaign a few years
ago in which shareholders pressured U.S. companies like Halliburton,
ConocoPhillips and General Electric to shut down the offices of
foreign-owned subsidiaries in Iran.

The current move by the institutional shareholders is another headache
for European companies with shares traded in American markets in terms
of their Gulf strategies.

The U.S. government recently warned foreign energy companies and some
foreign governments that they might incur penalties if they pursued
deals in Iran. Given the recent tensions, several European companies
have frozen plans to invest billions of dollars in several projects.

Iran is the second-largest holder of oil and natural gas reserves
after Russia. American companies are barred from doing business there.

The assistant comptroller for pension policy at the New York City
comptroller's office, Kenneth Sylvester, denied that the move by the
pension funds was a response to pressure from state assemblies.

"We are trying to get the companies to focus on the risks to them and
to their investors," Sylvester said.
--
Yoshie