Iran Accuse British Agents for Khuzestan Bomb Blasts (Update1)

Oct. 16 (Bloomberg) -- Iran accused British agents for detonating two bombs yesterday in the province of Khuzestan that killed four people at the same time that the U.S. Secretary of State Condoleezza Rice is in London to gather support against Iran's nuclear program.

The British Embassy in Iran today rejected these accusations.

The blasts, which injured 86 people, are the third series of bombings to hit Iran's southwest province of Khuzestan, the country's largest oil producing region, since June. ``Most probably those involved in the explosion were British agents who were involved in the previous incidents in Ahvaz and Khuzestan,'' Deputy Interior Minister Mohammad Hossein Mousapour told state-run Mehr news agency today.

Iran holds the world's second-largest oil reserves and is the No. 2 producer in the Organization of Petroleum Exporting Countries. Khuzestan has witnessed unrest in recent months that the government attributes to ethnic Arab separatists. Iran's ethnic Arabs, the majority in Ahvaz, make up 3 percent of the country's population.

In early September, a series of bomb blasts in Khuzestan halted crude transfers from onshore wells. In June, one week before the country's presidential election, six people died after a series of explosions in Ahvaz. At least another five died in ethnic clashes in April amid riots sparked by alleged plans to change the area's ethnic makeup.

No group has so far claimed responsibility for yesterday's bombs.

Nuclear Ambitions

The U.K., along with Germany and France, has led European attempts to curtail Iran's nuclear ambitions. The International Atomic Energy Agency board of governors next meets Nov.24. The U.S. is hoping to reach consensus before then with France, Germany, and the U.K. -- as well as Russia -- on how to proceed with regard to Iran's nuclear program.

Rice will meet today with British Prime Minister Tony Blair, after meeting yesterday with her Russian counterpart.

Russia, which is a key partner in Iran's nuclear program, providing the bulk of assistance and know-how in construction of the Iranian civil nuclear plant at Bushehr, remain opposed to referring Iran to the United Nations Security Council for alleged violations of the Non-Proliferation Treaty, Sergei Lavrov said yesterday in Moscow.

Royal Dutch Shell Plc, Europe's second-largest oil company, which recently completed the development of Iran's Soroush and Nowruz oil fields, won't comment on the security situation in Iran or the decline of relations between London and Tehran, said Andy Corrigan, a London-based spokesman for Shell.

Iranian state television in August reported that the country's authorities had arrested an unspecified number of separatists alleged to have links to British intelligence services based in Southern Iraq, near the border with Iran.

U.K. Revulsion

``There has been speculation in the past about alleged British involvement in Khuzestan. We reject these allegations,'' the British Embassy in Iran said today in a statement. ``Any linkage between the British Government and these terrorist outrages is completely without foundation.''

The embassy expressed its ``revulsion at and condemnation of the terrorist attacks,'' the statement, posted on the Embassy's Web site, said.

Most of Iran's crude oil reserves are in Khuzestan, which is located close to the border with Iraq and to the Persian Gulf. The province is also home to two of the country's largest undeveloped oil fields -- the Azadegan and Yadavaran deposits.

Iran has given Chinese state oil company China Petroleum & Chemical Corp. a 50 percent stake for the development of the Yadavaran oil field. Inpex Corp., Japan's biggest oil explorer, was awarded a $2 billion contract for the Azadegan oil field in February, 2004.

Shijiharu Yadima, Inpex's spokesman in Tehran, wasn't immediately available to comment, his office said.

The eight-year war with Iraq, which ended in 1988, severely affected Iran's oil production, particularly in Khuzestan where much of the fighting took place. As a result, Iran's production capacity has dropped to about 4 million barrels a day currently from 6 million a day in 1974.

To contact the reporter on this story:
Marc Wolfensberger in Tehran at mwolfens@bloomberg.net
Last Updated: October 16, 2005 08:50 EDT

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