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Author Topic:   Majlis to investigate Oil Ministry's foreign buy-back deals
posted June 28, 2001 09:35     Click Here to See the Profile for Vatandoost   Click Here to Email Vatandoost     Edit/Delete Message   Reply w/Quote
BBC Monitoring Service
Jun 27, 2001

Tehran, 27 June: The reformist-majority Iranian parliament (Majlis) is considering to investigate into the workings of the oil ministry over its foreign buy-back deals, a press report said Wednesday [27 June].

MPs have warned that Majlis may have to use its "legal right" and probe into the oil ministry if the latter ignores keeping the former privy to its foreign buy-back deals.

"The oil ministry should provide the parliament with the buy-back protocols it has inked with foreign entities," the reformist daily Tose'eh quoted MPs as saying.

"Majlis and other decision-making bodies should be given a copy of all foreign accords reached in various ministries," MP Ahmad Meydari told Tose'eh.

"When the deals are sealed secretly, even the best minister would not be able to oversee the affairs and, thus, the way would be cleared for managers to fish in troubled waters," he said. "We want to make the deals more transparent to help to the stability of our national interests," he added.

Majlis has permitted the National Iranian Oil Company (NIOC) to sign up to 7.5bn dollars in foreign buy-back deals during the current Iranian fiscal year (started 21 March) and has extended earlier permits.

Buy-back deals have come under extensive criticism by some sector in Iran, claiming that they would open the door to a sell-off of the national wealth.

Under a buy-back programme, a foreign investor is to recover his investment from products produced.

A member of the Majlis Industrial Committee, Valiollah Tavakkoli-Taba, was quoted by Tose'eh as saying: "Under the third five-year economic recovery plan (launched March 2000) and based on the Majlis governing by-law, all ministries should provide the chamber with their foreign deals. The oil ministry is not an exception."

"Before striking any deal, the oil ministry has to present a copy of the deal to the specialized parliamentary committees," he said. "There exist certain ambiguities over the oil deals. the oil ministry should keep the chamber privy to the deals to help play down concerns," Tavakkoli-Taba told the daily. deals.

"Oil contracts are an important issue and should be independently examined. Majlis should authorize such deals," Dr Hasan Sobhani said.

He complained of mismanagement in the oil ministry and noted "We do not have any problem with investment, our problem lies in the management area."

Buy-backs, though largely unpopular with foreign firms, were resorted to in the mid-1990s in a bid to help the Iranian government skirt constitutional bans on foreign ventures and attract much-needed capital to revamp the ageing energy sector which was damaged by the Iraqi imposed war and ongoing US sanctions.

Since 1997 Iran has pushed for greater foreign investment, and has attracted some 11.5bn dollars in foreign buy-back deals in its oil and gas sectors.

Contracts worth over 7bn dollars have already been sealed to develop the first eight of South Pars' 25 phases, but delays in project implementation have cropped up.

Iran, OPEC's second largest exporter, is pressing Western companies to defy Washington and invest in its new oil and gas projects, despite opposition from Washington.

Contract signings with major companies such as a Japanese consortium with Anglo-Dutch Royal Dutch Shell group and Italy's ENI are said to be imminent. Japan, a leading importer of Iranian crude, but with no involvement yet in developing the oil industry, has been invited to enjoy "preferential rights" to a huge exploration area in Azadaneh in the south-west of Azadegan in the south-west of the country...

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