Nairobi, Kenya (PANA) - Kenyan authorities announced the cancellation of an agreement with Iran, signed in May, for the importation of crude oil on more relaxed payment terms after a US threat to issue sanctions.
US ambassador to Kenya, Scott Gration, said Wednesday there would be sanctions against Kenya if Nairobi proceeded to implement an agreement to import crude oil from Iran.
The announcement followed the issuance of a similar warning by the US State Department that it would issue sanctions against any banks that trade with Iran’s Central Bank.
Kenya's Energy Ministry Permanent Secretary Patrick Nyoike was quoted as saying the country was cancelling the agreement with Iran to buy crude oil.
“There obviously would attract some measures,” the US envoy told journalists in Nairobi during the country’s independence day celebrations.
The two countries signed an agreement in 29 May, in which Iran pledged to provide credit lines to Kenya, which would have enabled Kenya to import its full crude oil demand from Tehran, a move that would have given the East African nation leeway to access cheaper crude.
Kenyan Prime Minister Raila Odinga and visiting Iranian First Vice President Mohammed Reza signed the oil agreement where Iran declared its readiness to double development aid in Agriculture, Finance, Energy, health services and trade to address the trade imbalance.
The memoranda of understanding (MoU) covered official development assistance, a credit line facility, agricultural cooperation, maritime transport and merchant shipping, supply of crude oil to Kenya and MOU on Visa waiver for holders of Diplomatic official and service passports.
Iran had said it was ready to increase its trade and investment portfolio in Kenya to address the balance of trade between the two countries that heavily favours Teheran by approximately 2.3 billion shillings.
Making the announcement when he paid a courtesy call on Odinga in his office Tuesday, the visiting First Vice President of the Islamic Republic of Iran, Dr. Mohamad Reza Rahimi, said "Iran is keen on investing in projects that were sustainable and would create employment for Kenyans."
The Iranian leader encouraged joint investment programmes between Kenyan and Iranian investors, saying his team was in the country to clear any barriers that could have hindered full implementation of twelve agreements and memoranda of understanding that had been signed earlier between the two countries.
Dr. Reza noted that Kenya and Iran had very high capacities to become strategic partners adding they could easily become gateways to Asia and Africa.
Odinga urged officials and businesspeople from the two sides to take advantage of the memoranda and agreements to actualize and intensify bilateral exchange even further.
-0- PANA AO/VAO 4July2012