WANA (Jan 27) – Crescent Petroleum has intensified its legal battle with the National Iranian Oil Company (NIOC), targeting frozen assets and properties under international jurisdiction. The dispute originates from a 2001 Gas Sales and Purchase Contract (GSPC), under which NIOC was supposed to supply natural gas to Crescent Petroleum for 25 years starting in 2005. However, due to allegations of corruption and unfavorable pricing, Iran halted the contract’s implementation, prompting Crescent Petroleum to seek international arbitration in 2009.

 

In 2014, an international tribunal upheld the contract’s validity and ruled that NIOC had violated the agreement by failing to deliver gas as per the terms.

 

Targeting Frozen Assets

The UAE-based company has set its sights on NIOC’s blocked funds held in offshore accounts, including approximately $2.7 billion deposited in the First Islamic Investment Bank, based in Malaysia’s Labuan Free Zone. These funds, which include assets of NIOC subsidiaries like Naftiran Intertrade Company (NICO), remain inaccessible due to international sanctions. Crescent Petroleum is now seeking court approval to access these funds as part of its efforts to enforce the arbitration awards.

 

In 2023, a U.S. court granted Crescent Petroleum access to $2.75 billion of NIOC’s assets. In 2024, NIOC’s building in the UK was auctioned for £100 million as part of the enforcement process.

 

Iran’s Response

The Iranian government has condemned these asset seizures, labeling them politically motivated. NIOC continues to challenge the rulings in various courts.

 

A Controversial Contract with Heavy Consequences

The Crescent contract, signed during the tenure of former Oil Minister Bijan Zanganeh, remains one of the most contentious oil and gas agreements in Iran’s history. Domestically, it sparked significant debate and criticism, while internationally, it resulted in substantial financial losses for the country.

 

One of the contract’s key flaws was its pricing structure, which was far below regional and global standards. For instance, Crescent agreed to pay just $17.5 per 1,000 cubic meters of gas, compared to $84 for a similar deal with Turkey.