Watchman Newsletter

Elite General to Become Iran Oil Minister

Financial Times (Link) - Najmeh Bozorgmehr (August 3, 2011)

Iran�s parliament has voted for a senior Revolutionary Guards commander to become the oil minister despite him being listed on the European Union sanctions list for alleged connections to the country�s controversial nuclear programme.

Of the 246 parliamentarians at Wednesday�s session, about 90 per cent voted for Brigadier General Rostam Qasemi to run the ministry, which generates most of Iran�s foreign exchange.

Ali Larijani, the speaker of the parliament that is dominated by fundamentalists, called for a �symbolic vote� in response to the sanctions that bar the new minister from travelling abroad and consequently attending meetings of the Opec oil producers� cartel at its headquarters in Vienna. Iran currently heads the group.

He also assured parliamentarians that �the perception that the guards intend to take over political power is irrelevant.�

After the Iran-Iraq war ended in 1988, the Revolutionary Guards gradually expanded their economic power by taking over development plans such as construction of roads, dams and later oil and gas projects. The National Iranian Oil Company says the guards� oil projects alone are worth $25bn.

Iran�s pro-democracy opposition also alleges that the Guards staged �an electoral coup� in the disputed presidential poll in 2009 and have been largely dictating political changes.

�The Guards are currently accused of monopolising development projects in an unequal competition with the private sector,� said Ali Motahhari, the sole parliamentarian who spoke against the nomination of a military commander for a business post. �This allegation would be worse with the inclusion of the huge oil sector,�

�A ministerial position for a military figure in the oil ministry means connecting military power to political and economic [power] which may lead to corruption,� he added.

Gen Qasemi, 47, has been the head of Khatam al-Anbia, the Guards� economic arm and a leading construction contractor, since 2008. The opaque company is also the subject of international sanctions.

Describing himself as a �soldier� while speaking in a civilian suit before the parliament, Gen Qasemi boasted that Khatam al-Anbia �thank God replaced Total and Shell� when the two western companies refused to develop South Pars, the world�s largest gas field, because of international pressure over Iran�s nuclear programme and the unfriendly terms offered to foreign companies.

He said his plans included the development of joint oilfields with neighbouring countries, maintaining Iran�s position in Opec as the second-largest producer and making Iran the world�s top gas producer and the region�s leading refiner.

This comes at a time when Iran�s oil sector has been hit hard by direct and indirect sanctions, which has led to underdevelopment of the sector; oil production capacity is believed to have drastically dropped from the 4.2m barrels per day in 2005.

Meanwhile, sanctions have prevented money transfers from India to Iran in payment for oil sales, leading to India accumulating debt to Tehran of about $5bn.

Iran has denied the Financial Times report that the same problem exists with oil payments from China. But Hamid-Reza Katouzian, the head of Iran�s parliamentary energy committee, confirmed this week that Iran was unable to transfer its money from China. �It has become clear that this is happening with China with even worse conditions [than India],� he told Etemad daily, without giving further details.

The legislature, dominated by fundamentalists, also approved the appointment of three other ministers � of sports and youth; labour, co-operatives and social welfare; and industry, mine and commerce. �