The engineering arm of Iran 's Revolutionary Guards said Friday it was pulling out of projects in a giant Iranian gas field, blaming the mounting sanctions the paramilitary force faces from the West.

The decision is a blow to a push by President Mahmoud Ahmadinejad to tighten control of the oil and gas industry and suggests sanctions specifically targeted at Iran 's paramilitary apparatus are having an impact.

"Recently, in an oppressive action by the West, Khatam al-Anbiya has been slapped with sanctions," the Guards' engineering arm said on its website Khatam.com.

Back in 2006, Khatam al-Anbiya had won contracts worth a combined $2.09 billion to develop two phases of the South Pars gas field. The deals were part of a string of projects--from petrochemical plants to oil drilling--it was awarded after the election of the hardline Ahmadinejad in 2005.

The Iranian president also secured the appointment of former Revolutionary Guard Masud Mirkazemi as oil minister last year while a loyalist recently took the helm of the National Iranian Oil Co.

But last month, Khatam al-Anbiya was among companies linked to the Iranian Revolutionary Guard Corps targeted by new U.N. sanctions imposed against Iran over its nuclear program. The West suspects the program has military aims while Iran says it is peaceful.

The engineering arm of the IRGC is also under sanctions from the U.S. and the European Union, which both recently extended the list of its sanctioned affiliates.

The EU says Khatam al-Anbiya's subsidiaries were heavily involved in the construction of an Iranian uranium enrichment site in Qom .

Western pressure on the IRGC arm is part of a broader push that includes recently adopted U.S. sanctions against Iran 's oil industry, notably its gasoline supply.

Last month, Khatam al-Anbiya failed to win the bulk of contracts worth $21 billion awarded to domestic companies to develop South Pars--contradicting predictions from Iranian officials. Marine services company Sadra, which is partly owned by the Khatam al-Anbiya, did get some contracts, however.

A spokesman for the company operating South Pars didn't return a request for comment Friday on the reasons behind the pullout.

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