Tribunal Tells Iran to Pay $600 Million in Amoco Claims

Amoco Corp. won $600 million in awards Friday from Iran for facilities seized there during the 1979 Islamic revolution.

Two claims totaling $600 million were awarded to the American oil giant, an official of the Iran-United States Claims Tribunal said. It was the biggest settlement in the arbitration body’s nine-year history.

The Tehran government has hinted recently that the resolution of financial disputes with the United States might contribute to the release of the six American hostages held by pro-Iranian Shiite extremists in Lebanon.

However, the tribunal official, in a telephone interview Friday, repeated “our strong position” that the arbitration is not tied to the fate of the American hostages in Lebanon.

Last month, settlement of a much smaller claims package was announced shortly after the release of American hostages Robert Polhill and Frank Reed.

American and Iranian officials at the tribunal have vigorously denied conducting any direct talks on the hostage issue. They said the tribunal deals only with arbitration of financial disputes.

The Amoco settlement was among more than $1.8 billion in oil company claims stemming from Iran’s Islamic revolution led by Ayatollah Ruhollah Khomeini.

U.S.-Iranian ties were severed over the holding of hostages at the U.S. Embassy in Tehran for 444 days by Iranian militants. The hostages were seized in November, 1979, and released in January, 1981.

At issue in Friday’s settlement were two claims filed by Amoco subsidiaries against the National Iranian Oil Co., according to the official, who spoke on condition of anonymity in line with tribunal policy.

Amoco Iran Oil Co. is receiving $540 million worth of compensation for the seizure of four Persian Gulf drilling fields and the oil terminal on Kharg island, which is Iran’s most important oil terminal.

Amoco International Finance Corp. is to receive $60 million for the expropriation of a petrochemical processing plant on Kharg in which Amoco had a half-interest, the official said.

Amoco said it was pleased by the decision. But the company said in a statement from its Chicago headquarters that the effect of the settlement on its net income will be “largely offset” by the as-yet-undetermined income taxes it must pay on the settlement and by an unrelated charge the company will take this quarter against the cost of future environmental clean-ups.

Spokesman Mike Thompson indicated that the taxes and an unrelated charge the company will take against the cost of future environmental clean-ups would total more than $300 million. In addition, a statutory fee of about $6 million will be deducted by the U.S. government, the company said.

Amoco stock rose 25 cents a share to close at $52.125 Friday on the New York Stock Exchange.

The tribunal was set up as part of the 1980 Algiers Accord, which helped win the freedom of the embassy hostages.

The panel has three American judges, three Iranians and three third-nation members. So far it has settled $3.2 billion worth of government-to-government and private claims.

About 150 such claims are still pending, according to the tribunal official, who could not specify their total worth.

The biggest item still on the tribunal’s agenda is an $11-billion claim filed by Iran for military equipment ordered before the revolution and not delivered under the subsequent U.S. embargo.

The U.S. government contends that much of the weaponry at issue is not under its control but belongs to private contractors whose bills were never paid by Tehran.

Washington claims that some of the hardware Iran did pay for was sold to private buyers and the proceeds deposited in Iran’s bank accounts.

Among those items were four warships taken over by the U.S. Navy, the U.S. government has said.