BP confused over Iran licence

CONFUSION reigned at BP's US headquarters in Cleveland, Ohio, last night over whether a controversial export licence to Iran had been blocked.

Marlin Fitzwater, the White House spokesman, said the outgoing Bush administration had decided not to allow BP to build a dollars 250m ( pounds 170m) chemical plant in Iran. A BP America spokesman complained, however, that no one had informed the company of the decision.

BP is now considering its options, which include re-applying to the State Department after the transfer of power to the incoming Clinton administration. The company is unsure whether it can re- apply after 20 January, when President George Bush's term ends.

The US administration is concerned about an increase in Iran's chemical weapons capability. One by-product of the synthetic fibres plant BP plans to build for an Iranian chemicals company is hydrogen cyanide, a lethal gas that works through the bloodstream to asphyxiate those exposed to it.

BP maintains that it agreed modifications to the plant with the Defense Department, which approved the proposed deal last April. BP would monitor hydrogen cyanide production at the plant and could shut it down, if necessary. The plant's process is dependent on a catalyst that only BP can supply.

The proposed deal had already received the blessing of the Energy Department and the Commerce Department had recommended that the licence be granted before the end of the Bush term.