Leaders of Iran

Saturday, December 18, 2004

Petro Pars in shake up, allegations made against oil minister and Behzad Nabavi

IranReporter - Story Page: "Petro Pars in shake up, allegations made against oil minister

[11/27/2001]
A question mark hangs over the future of Iran’s oil minister, Bijan Zanganeh, following reports he had been summoned to court and an official statement of a shake-up in Petro Pars Ltd, the country’s largest non-state energy company which he helped establish.

Abrar-e-Eqtesadi, an economic daily, said Mr Zanganeh’s case was linked to Petro Pars, which the State Inspectorate Organisation alleged had been illegally awarded a project in the giant South Pars gas field. But another reformist newspaper, Touseh, reported the minister might be arrested in connection with the use of $826m in oil revenues. He was supposed to appear in court on Sunday but the case was postponed, it added.

In a separate development, Ayatollah Mahmoud Hashemi Shahroudi, head of the judiciary, urged officials to support the +brave judges+ investigating economic crimes. He referred to the recent summoning of +some individuals+ but gave no names, adding that all officials and citizens enjoyed equal rights before the courts.

Allies of Mr Zanganeh believe his case is politically motivated by conservative rivals seeking to undermine the pro-reform administration of President Mohammad Khatami. They noted that Mr Zanganeh had survived previous crises and had been re-appointed as minister in a cabinet reshuffle just three months ago, with the approval of parliament.

State television, without mentioning Mr Zanganeh, reported that Petro Pars, which is registered in the UK Virgin Islands, would be re-established as a private company registered in Iran. All its financial and banking activities abroad would be stopped, and its contracts and commitments transferred to the new company within six months. It said the shake-up followed an agreement between Petro Pars and the finance ministry.

A Petro Pars spokesman said the company was not being dissolved and there would be no impact on its contracts with the Italian energy group, ENI, and Enterprise Oil of the UK. He said that, as before, the new company would be 60 per cent owned by the oil ministry’s pension fund and 40 per cent by the pension fund of IDRO, a state holding company.

Petro Pars was awarded phase one of the South Pars gas project, now some 20 per cent behind schedule, as well as phases four and five together with ENI, plus phases six to eight. Iranian media said its contracts were worth a total of $7.5bn.

Behzad Nabavi, a veteran left-wing politician close to Mr Khatami, resigned as head of Petro Pars several months ago. His departure followed allegations of corruption made by conservative newspapers, and claims by Ayatollah Ahmad Jannati, a senior conservative cleric, that certain officials, whom he did not name, had plundered millions of dollars from the oil industry. Mr Nabavi, a member of parliament, denied any wrongdoing.

Foreign oil companies are concerned that the controversy over Mr Zanganeh, whether political or financial, is contributing to long delays in awarding major contracts."

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