Leaders of Iran

Tuesday, December 14, 2004



TEHRAN 7 July (IPS-IRNA) Iranian Oil Minister Bizhan Namdar-Zanganeh reiterated Saturday that the Oil Ministry will take legal action against those accusing Ministry’s officials of taking commission from foreign companies with which the National Iranian Oil Company (NIOC) concluded buy-back contracts.

His remarks were in answer of accusations made recently by Ayatollah Ahmad Jannati, the Secretary of the powerful Council of Guardians, charging that unidentified people have "plundered millions and millions" the country, sending the money in foreign banks.

Mr. Namdar-Zanganeh had immediately urged the hard line cleric to publicly name the persons and provide the name of the banks where the "plundered money" had been deposited.

Mr. Jannati’s harsh remarks came immediately after NIOC signed a new major contract with Italian ENI for developing the onshore fields of Dar Khovein in the oil-rich South-western Province of Khoozestan worth US Dollars one billion.

Since the proclamation of Islamic Republic 22 years ago, this is the first time that Iran signs a contract with a foreign company dealing with onshore fields.

Oil Ministry introduced the buy-back system of contracts to overcome constitutional obstacles that forbid foreign companies to invest in Iranian oil industries.

Speaking during a press conference, the Ministry again defended the "buy-back" system of contracts NIOC sign with foreign executives but at the same time said the law forbid the Ministry to divulge details of the controversial agreements that some oil experts say are against the nation’s interests, favouring foreign firms.

"All the signed contracts have passed legal channels before being finalised", Mr. Namdar-Zanganeh said, adding that a committee comprising of representatives of the president, the Management and Planning Organisation (MPO) and several deputy ministers study the contracts NIOC signs with foreign partners.

"The technical and economic justification for the projects, he pointed out, is approved by the High Economic Council and the ceiling for the total contracts to be signed each year are determined by the parliament", he pointed out.

He accused unidentified "certain countries which regard Iran as their monopoly’"' have launched speculations against contracts NIOC has signed with foreign partners, an indirect reference to the United States.

He said that the contracts the NIOC has signed with foreign executives mainly focused on the common oil and gas fields under which 3.5 billion barrels of gas liquids, 2,300 billion cubic meters of natural gas, 100 million tons of liquefied gas and 2.5 billion barrels of crude oil will be produced in 30 years.

He said that the contracts had already been put on tender and the projects have been ceded to those who won the tender except for phases one, two and three of South Pars oil and gas field.

According to the Minister, the NIOC has signed 11 contracts with foreign companies on exploration and research studies and has reservations about announcing the interest rate in the buy-back contracts. He said in the meantime that the interest rate has gradually decreased in the past four years.

He explained that the buy-back contracts have been signed in short terms to save payment of interest rate.

He said that the NIOC has set up Petro-Pars Company to carry out the phases one, six, seven and eight of South Pars Gas field and help domestic engineers promote their technical expertise.

"Petro-Pars has undertaken a dlrs 3.5 billion contract to develop South Pars gas field. 40 percent of Petro-Pars shares belong to the special fund "future builders" affiliated to the Iranian Development and Renovation Organization (IDRO) and 60 percent of the shares belong to the Retirement Fund of the Oil Ministry. ENDS OIL MINISTRY CORRUPTION 8701"


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