LATEST


Iran has again declared its pursuit of new contracts with international oil companies, hoping to revive the economy after slump of several years because of mismanagement and US-led sanctions.

Petroleum Ministry official Mehdi Hosseini introduced a new Iran Petroleum Contract at a Saturday conference, proclaiming that negotiations are underway with 16 companies from 13 countries.

The Contract replaces a “buyback” system which prevented foreign companies from booking oil reserves and set relatively short durations. As a result, many firms saw no profit in investment in Iranian oil fields.

Under the new arrangement, foreign firms can book the reserves in contracts of up to 25 years. However, they still will not be able to hold equity shares in the fields.

Oil Minister Bijan Namdar Zanganeh told investors at the conference that he seeking $30 billion investment in 52 fields.

The 16 firms named by Hosseini are OMV of Austria, Maersk of Denmark, Total of France, Eni of Italy, Repsol of Spain, Kuwait Energy of Kuwait, Petronas of Malaysia, Lukoil of Russia, CNPC of China, British Petroleum, British Gas, Shell of Netherland, Inpex of Japan, Wintershall of Germany, Mitsui of Japan, and Jogmec of Japan.

The Supreme Leader has banned any consideration of contracts with US firms.

Years of Decline

By 2010, almost all overseas companies halted investment in Iranian oil and gas fields. Further US and European sanctions, including restrictions on insurance for Tehran’s oil tankers and penalties on purchasers of Iranian crude, cut Iran’s exports by up to 65% from its 2012 level of 2.2 million barrels per day. After the interim nuclear deal in late 2013, Iranian sales recovered to about 1.4 million bpd.

Iranian oil production has fallen since 2012 from more than 4 million bpd to a low of about 2.6 million bpd, before recovering to 3.3 million this summer. Tehran’s officials assert that renewed investment and sanctions relief will lead to a level of 5.7 million bpd.

The Iranian economy is still struggling after falls in production and employment, currency fluctuations, and inflation which reached more than 40% in 2013. While inflation has been cut under the Rouhani Government to less than 15%, there has been little growth after a fall of 4.6% in GDP in 2013.

President Rouhani’s senior advisors admitted earlier this month that there was no prospect of recovery in the short term. It has also warned that it is facing a large deficit in its 2016/17 budget.

The Government is hoping for a boost in January, with verification of Iran’s compliance with the nuclear deal with the 5+1 Powers. However, the prospect of verification and sanctions relief has been hindered by hardliners who have criticized implementation of the terms of the nuclear agreement.


Supreme Leader Tries to Take Advantage of Islamic State’s Paris Attacks

The Supreme Leader has tried to use the Islamic State’s attacks in Paris on November 2013 to denounce the US and the “West”.

In an open letter to the “Youth in Western Countries”, Ayatollah Khamenei said their “insecurity and strain…differs from the pain that the people of Iraq, Yemen, Syria and Afghanistan have been experiencing for many years”. He continued:

There are very few people who are uninformed about the role of the United States of America in creating, nurturing and arming al-Qaeda, the Taliban and their inauspicious successors. Besides this direct support, the overt and well-known supporters of takfiri terrorism — despite having the most backward political systems — are standing arrayed as allies of the west while the most pioneering, brightest and most dynamic democrats in the region are suppressed mercilessly. The prejudiced response of the “est to the awakening movement in the Islamic world is an illustrative example of the contradictory western policies.

Khamenei then focused on the “state terrorism of Israel” and “military invasions of the Islamic world” to assert:

Dear youth! I have the hope that you — now or in the future — can change this mentality corrupted by duplicity, a mentality whose highest skill is hiding long-term goals and adorning malevolent objectives.


Assad Hosts Top Iranian Official: “We Fight Terrorism In All Its Forms”

President Assad received the top aide of Iran’s Supreme Leader, Ali Akbar Velayati, on Sunday in Damascus.

Assad declared that the regime and its allies are dedicated to “fighting terrorism in all its forms”, according to Syrian State media.

Implicitly referring to Turkey and Saudi Arabia, Assad said the “resolve to fight terrorism will continue despite the recent escalation by some hostile countries who, while claiming to be fighting terrorism, have beefed up funds and armaments to the terrorist gangs”.

Velayati “expressed Iran’s appreciation of the ‘exceptional’ steadfastness of the Syrian people and leadership in the face of the ‘fierce’ war waged against them”, Syrian State news agency SANA wrote.

(Cross-posted from Syria Daily)