Iran-Total Gas Deal Sparks Controversy in Tehran

Iran-Total Gas Deal Sparks Controversy in Tehran
Iranian Oil Minister Bijan Zanganeh [left] and the CEO of Total Patrick Pouyanné [second from right] on sidelines of ceremony to sign huge gas deal on July 3, 2017 / Photo by Mehr News Agency

A multi-billion-dollar gas deal signed between Iran and French energy giant Total for the development of Phase 11 of South Pars Gas Field has sparked mixed reactions in Iran.

The opponents and proponents of the deal signed on July 3 have missed no opportunity to state their opinions about it. But the main question is whether or not they are all qualified enough to express their ideas.

Iran and a consortium headed by Total signed a five-billion-dollar gas deal to develop the South Pars offshore gas field’s phase 11. The consortium consists of Total from France (with a share of over 50%), CNPS from China (30%), and Petropars Group from Iran (lower than 20%).

In his remarks during the signing ceremony, Iran’s Oil Minister Bijan Zanganeh said this is a very good day for Iran’s oil industry. He also expressed the hope that the industry develops into a new phase with the signing of the deal.

Mohammad Baqer Nobakht, the spokesman for the Iranian government, also said with signing the agreement, Iran has demolished the wall of sanctions.

The deal has sparked mixed reactions among a larger number of Iranian political and economic players. Government officials have warmly welcomed the deal, while the issue of signing new oil contracts with foreign companies particularly the French giant of Total has been controversial provoking serious disputes inside Iran over the past months.

In one case, Leader of the Islamic Revolution, Ayatollah Seyyed Ali Khamenei, ordered the officials in charge that no new oil and gas contracts for international companies must be awarded without necessary reforms.

In a letter to Iran’s First Vice-President, Es’haq Jahangiri, two weeks before signing of Iran-Total gas deal, former lawmaker Ahmad Tavakoli criticized the government for violating its own approvals about the necessity of observing security measures in dealing with foreign companies.

As the founder of the corruption watchdog, non-governmental organization Justice and Transparency Watch, Tavakoli also said as stipulated in the Leader’s guidelines on oil contracts with foreign companies, the government is obliged to observe all security considerations.

“The 8th stipulation of the guideline says that the companies’ access to the secret information about Iranian oil fields should be discussed in the National Security Council,” Tavakoli added.

Now most of the critics say their main question is whether the government has addressed the issues raised by Tavakoli. But there are other opponents of the oil deal who have taken one step further. Ali Reza Zakani, a former Iranian MP says he is against the deal for reasons beyond what Tavakoli raised in his letter.

“We are against the deal because the French company left Iran alone during western sanctions and is notorious for its corrupt deals,” he added.

The proponents of the deal, however, view it as a victory for the Islamic Republic. In response to the critics, Zanganeh said the gas deal was signed despite opposition from inside and outside the country because the opponents begrudge Iran’s dignity and achievements particularly its restored relations with the world.

He also stressed the deal has been signed according to the Constitution of the Islamic Republic of Iran. “Based on the government approvals, a seven-member board is now assigned with making sure the deal does not violate any government approvals. The board is comprised of four former ministers and three other senior officials,” he said.

Speaking on the sidelines of the signing ceremony, Zanganeh also said Iran has invested five billion dollars, but Total is expected to invest nearly six billion dollars.

“Some critics say we have given away between 50 to 70 percent of the whole shares of the deal to the foreign side. But this is wrong. The whole income of Total and its consortium from the gas fields would stand at less than 15 percent in the next 20 years.”

This comes as Hedayatollah Khademi, a member of the presiding board of Iranian parliament, says the lawmakers are set to conduct a review of the deal with Total and expressed hope that there will be an appropriate mechanism to oversee the deal.

“We also hope the French side remains committed to its pledges under the deal and won’t leave it unfinished,” he said.

He went on saying that over the next couple of days, the parliament’s presiding board will enter into correspondence with the Oil Ministry to get the details of the deal.

“Having got the details, the relative commission will begin a probe into the agreement,” he said.

The statements of the lawmaker reveal an important point: Neither the opponents, nor the proponents are not aware of the deal’s details. It seems the Oil Ministry has decided to keep the details secret.

So, it goes without saying that all the opinions expressed for or against the deal are based on some partial media speculations.

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