For U.S. oilfield services companies suffering the worst revenue slump in decades it would at first seem like a lifeline: The lifting of sanctions on Iran by six world powers reopened the door for their foreign units to return to the OPEC member that needs help to develop its oil reserves.
Iran, home to the world's fourth largest crude reserves, is embarking on a $185 billion effort to revive oil and gas projects by 2020 after sanctions halved the country's oil exports and led to neglect of its energy infrastructure.
A drop in crude oil prices to 13-year lows has brought drilling come almost to a standstill nearly everywhere else in the world, creating rare commercial prospects for non-U.S. companies such as Saipem, an oilfield subsidiary of Italian major Eni and Shell, which have already expressed an interest in returning.
Yet major U.S. oilfield firms such as Schlumberger Ltd , the world's largest, and Weatherford International (WFT) said they were not pursuing Iran business for now, partly because a complex web of sanctions remained that Washington linked to its allegations of Tehran's support for terrorism and human rights abuses.
After the international group known as the P5+1 removed sanctions on Saturday as part of a deal for Tehran to curb its nuclear ambitions, the U.S. Treasury Department issued a general license allowing foreign-based subsidiaries of U.S. companies to trade with Iran for the first time since 2012.
But the U.S. government has fined both Weatherford and Schlumberger in the past two years for violating sanctions on Iran and other countries. In 2013 Weatherford agreed to pay $253 million and last year Schlumberger agreed to pay more than $237 million.
"You would expect U.S. companies in highly enforced industries like the oil and financial sectors to be initially reluctant," to return to Iran, "until they see more of how the situation plays out," said Ginger Faulk, a lawyer who advises companies on sanctions at Baker Botts.
The new Treasury license comes with several strings attached.
U.S. citizens, for example, are not allowed to deal with Iran even if they are working with a foreign based affiliate, while more than 225 Iran-linked persons and entities, many of whom control major pieces of Iran's infrastructure, are still off limits by Washington.
"Having a truly independent foreign affiliate is harder than it sounds and many companies have found that it is difficult to keep personnel, equipment and operations segregated to the degree that the Treasury Department's Office of Foreign Asset Control requires," said Josh Zive, a lawyer at Bracewell, who advises energy companies on sanctions.
In addition, companies are hesitant to move in during an election year in the United States, lawyers said. Republican presidential candidates have been critical of Democratic President Barack Obama's nuclear deal with Iran and the next president could potentially remove the general license soon into the first term.
"A change in administration means there is potential for stranded investments if there is a policy change," said Zive. He said "having those opportunities cut off before they become profitable could become very risky."
Weatherford spokeswoman Karen David-Green said the company "currently has no plans to commence operations in Iran of any kind or through any affiliates."
When asked if Schlumberger would return to Iran, spokesman Joao Felix said not now. "In the event the U.S. government does materially ease sanctions on Iran, we will evaluate going back in at that time."
Three other oilfield service companies, Halliburton, Cameron International (CAM) and National Oilwell Varco (NOV) , did not immediately comment when asked about Iran, in contrast with European oil companies that were quick to express their interest both before and after the deal.
Part of the difficulty for U.S. companies in Iran is knowing which supply chains to deal with. Iran's biggest construction firm, Khatam al-Anbiya, and Tidewater Middle East Co, a major port operator in Iran that owns the primary port terminal, remain on Washington's blacklist for their ownership by the Iranian Revolutionary Guard Corps.
U.S. officials have said that anyone doing business with these banned entities risked incurring harsh penalties.
Furthermore, companies that decided to put foreign-based units in Iran would have to publicly declare their actions, which could open them up to political scrutiny.
"I think there is going to be very little appetite by U.S. firms to push the envelope. You could pretty easily see one or more congressional committees calling executives up to explain why their foreign sub decided to deal with Iran," said a U.S. compliance official, who spoke on condition of anonymity because of the sensitivity of the topic.
(Reporting by Timothy Gardner; Editing by Soyoung Kim and Grant McCool)