TPT May 2016

G LOBA L MARKE T P L AC E

maintains selective sanctions that prohibit most commercial ties with Iran, so American companies are not permitted to vie for contracts with its oil and natural gas industry. The US restricts its nationals to trading with Iran solely in commercial airplanes and Persian rugs. Re-engagement wi th Cuba Largely closed out of the new oppor tunities presented by Iran, the US is at an advantage nearer home A historic agreement, signed on 16 February by officials of the US and Cuba, provides for the reopening of scheduled air services between the two nations for the first time in 53 years. On the same day, the Cuban government launched what Roger Yu of USA Today called “a full-court press” to get American companies to step up economic investment in the island nation 90 miles from Key West, Florida. This intention was apparent from the public comments of Cuba’s minister of foreign trade and investment, among the first by a top Cuban government official in the US since President Barack Obama normalised diplomatic relations with Cuba in late 2014. “I believe the road we have started to walk on is the right one,” Rodrigo Malmierca Díaz said at a press conference following his speech at the US Chamber of Commerce in Washington. “No matter what, we’re going to maintain the disposition to normalise our relations with the US.” Pledging that no US companies would be discriminated against by Havana, Mr Malmierca Díaz has now made plain that Cuban opportunities abound for firms other than telecom providers. It remains only for Congress to lift the decades- old US commercial, economic and financial embargo of Cuba. (“Cuba’s Trade Minister Calls for End of Embargo,” 17 February) But USA Today pointed out that, even while el bloqueo remains in place, the Obama overtures have loosened business and investment restrictions on the island nation “and have raised hopes for expansion-minded US companies tempted by an untapped market with a reputation for quality education and advanced engineering training.” Notably, the Treasury and Commerce departments have introduced a series of rule changes to encourage US companies to consider Cuban investment. And Mr Malmierca Díaz said he plans to hold talks with government officials for further rule changes that would accelerate economic investment, and to meet with American business executives. The Cuban trade chief’s speech in Washington in February, aimed at wooing investors, made a strong beginning. These highlights were noted by USA Today : • Cuba’s gross domestic product (GDP) grew 4 per cent in 2015, with manufacturing and construction among the leaders.

Post-sanct ions I r an ‘The idea is simple. They lift the sanctions. We send the pipes.’ Interviewed in Volgograd, Russia, by the New York Times , Sergei G Chetverikov, director of the Tube Metal Co (TMK) plant there did not have to spell out which sanctions were meant, or the intended recipient of the pipes. The return of a newly respectable Iran to the ranks of the world’s deep- pocketed customers is of major interest to the company that, in the Soviet period, provided up to 40 per cent of the tubulars used in Iran’s oil industry – including casing set into oil wells and pipes carrying natural gas over the desert. When the United Nations imposed sanctions on Iran in 2006, Russian companies like TMK had to retreat. As reported by the Times ’s Andrew E Kramer, the Russian pipe maker turned its attention to the US. As the shale boom took off, the company bought 12 factories in North America. But, energy prices falling, TMK’s North American division, Ipsco, has idled two plants and plans to lay off 40 per cent of its 2,700-strong workforce. Now, back home in Russia, TMK – the biggest supplier of pipes to the world’s oil and natural gas producers – has a new focus. (“Ready and Willing to Sell to Iran,” 8 February) The Russian energy giants Gazprom and Lukoil are weighing investments in an oil field and in a liquefied natural gas (LNG) project on the Persian Gulf. Mr Kramer also noted that Eurasia Drilling Co, an oilfield services business, and Tatneft, a second- tier Russian oil company based in Tatarstan, a predominantly Muslim region east of Moscow, both have good prospects. So, too, has TMK. Iran holds the second-largest Middle East oil deposits, after Saudi Arabia, and by some estimates the world’s largest reserves of conventional natural gas. Even before sanctions were lifted, Iran signed deals to export gas to Iraq and Pakistan. But its industry lacks the pipes to deliver that gas, as companies woefully underinvested during the era of sanctions, observed the Times . In total, analysts have said, Iran could spend as much as $100bn rebuilding its natural gas pipelines. And TMK thinks it is in a good position to capture much of that business. › “At its gigantic metal works here, [TMK] pours, grinds, and welds the huge steel straws that pull much of the world’s oil out of the depths,” wrote Mr Kramer from Volgograd. Less lyrically, the company says 20 per cent of the oil brought to the surface at one point or another around the globe flows through a TMK tube, including high-end varieties of pipe made for the insides of oil wells. “We make the pipe Bentleys,” declared TMK’s vice-president for strategy, Vladimir Shmatovich. And his company has plans to increase its output of those esteemed products. › Meanwhile the lifting of international sanctions that favours TMK will confine certain others to the sidelines. The US

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M AY 2016