Headless oil industry in Iran faces crisis
Tuesday, 4 September 2007
Kimia Sanati from Tehran
Iran's key oil industry could plunge into crisis, oil experts have warned, if President Mahmoud Ahmadinejad does not urgently appoint a replacement for Seyed Kazem Vaziri Hamaneh who was sacked as oil minister two weeks ago in a major cabinet reshuffle.
''It appears that the decision to dismiss the oil minister was taken when parliament is prevented from voting for a new minister for a month, because of the summer holiday recess,'' the statement by oil ministry experts said, referring to rumours that Ahmadinejad intended to postpone presenting his candidate for as long as the law allows him -- three months.
Meanwhile, various projects as well as negotiations on oil and gas deals have been kept pending. Oil accounts for 70 percent of Iran's export earnings and the country is the world's fourth largest exporter.
Hamaneh and Alireza Tahmasbi, minister of industries and mines, were dismissed on Aug. 12. The two ministers were followed on their way out of the cabinet by Mohammad Sheibani, governor of the Central Bank of Iran (CBI). The CBI governor had several times warned about the thoughtless expenditure of oil revenues and expressed his opposition to reduction in interest rates.
At his farewell ceremony on Aug 18, Hamaneh defended his performance as oil minister during the past two years and warned that certain (political) groups were attempting to destroy the existing structure of Iran's oil industry in the same way that others had unsuccessfully tried to liquidate the country's army soon after the 1978 Islamic Revolution, Iranian Students News Agency (ISNA) reported.
The former minister was also quoted by ISNA as saying he had not resigned earlier as he thought himself capable of continuing to serve and that a replacement fell within the President's jurisdiction.
Ahmadinejad has sacked four ministers of his cabinet during his two years in office. The minister of welfare and social security and the minister of cooperatives were dismissed from the cabinet last year. They were followed by vice-president and head of the country's management and planning organisation Farhad Rahbar.
The organisation itself was liquidated by the President later and its responsibilities were transferred to the President's Office.
"President Ahmadinejad's inability to solve economic problems had been predicted by experts early on... the effects of his failure are now apparent in spite of the parliament's relatively high coordination with him after two years of carrying out his visions in economy," the 'Kargozaran' reformist daily, which is close to former president Akbar Hashemi Rafsanjani, said in an editorial that followed the sackings.
"(By sacking the ministers in question) the President can relate certain economic failures of the government to the inefficiency of the sacked ministers...the two ministers had never taken any steps against the policies of the government and the President. Altering policies may be a more resourceful step (by the President) than replacing individuals," the editorial said.
Hamaneh got the vote of confidence of the Iranian parliament as oil minister in December 2005 after the generally sympathetic and supportive hard line legislative body refused to vote for the other two candidates proposed for the post by Ahmadinejad, and another candidate, a close associate and advisor of the President, withdrew just a day prior to the parliament voting fearing rejection.
"The parliament granted its vote of confidence to Hamaneh because even the hard line dominated parliament could well see the oil minister had to be someone from among the ministry executives and well familiar with its work. The other candidates had no experience or qualifications in the field but were trusted by the President," an analyst in Tehran requesting anonymity told IPS.
"Ahmadinejad needs someone from outside the ministry who has no reservations towards realising the President's wish to purge the ministry of an allegedly corrupt group of executives connected with his political opponents. The group the President wants out consists mainly of technocrats with affiliations or sympathetic to Kargozaran Party and Rafsanjani," he said.
"Now that he has sacked the minister he can have three months before he presents another candidate to the parliament. If he uses all the time legally allowed, he will be able to accomplish through the supervisor he has appointed to lead the ministry in the interim what the former oil minister refused to comply with, i.e., to get rid of political opponents and anyone who dares to resist his visionary plans," he added.
In fiery speeches delivered during his tours of provinces, Ahmadinejad has repeatedly talked of his determination to eliminate 'the oil mafia' whom he accuses of misappropriation of the ministry resources and corruption.
In an interview, given soon after taking office in December 2005, Hamaneh, an oil ministry veteran himself, denied the existence of any such mafia and defended the reliability and financial trustworthiness of ministry executives and continued to do so to his last day in office.
Parliament member Hasan Moradi who is a member of its energy committee told Aftab News Agency that the dismissal of the oil minister had nothing to do with a controversial gas deal signed recently to sell gas to India and Pakistan.
Critics, including former deputy oil minister Nejad Hosseinian, consider the deal very detrimental to Iranian interests. Eighty one parliament members have signed a motion to oblige the government to obtain parliament's approval on gas deals, including the deal already made with India and Pakistan.
Hamaneh had good relations with the energy committee, reformist legislator and committee member Valiollah Shojapourian was quoted by Aftab as saying. "At a time when huge and important contracts in the oil industry are being negotiated and the issue of gasoline rationing has become very sensitive, dismissal of the oil minister whose plans were supported by the energy committee was wrong and not based on any kind of expertise," he said.
Deputy chairman of the energy committee Hossein Afarideh told Aftab that the minister had refused to appoint two individuals from outside the oil ministry that the President wanted as a ministry deputy and as managing director of one of the oil ministry's affiliated companies. The minister had insisted the individuals lacked the required qualifications for the positions.
''Ahmadinejad wants to be the sole player in the game and all ministers are required to comply with his wishes even if their reason and expertise demand otherwise. The minister of industries and mines stubbornly refused to nominate the President's candidates to certain positions and he, too, was sacked,'' an observer in Tehran told IPS on condition of anonymity.
"There are also speculations that the oil minister refused to agree to the President's demands to give preference to selling oil and oil products at reduced prices to certain buyers recommended by him. Ahmadinejad aims to attract much needed allies among other countries and selling them cheaper oil is a good way to achieve this," he said.
"Such moves can be totally pointless economically. For example, to everybody's surprise a direct flight line was recently established on the President's orders between Tehran and Caracas. Very few Iranians ever travel to Venezuela or other countries in that region for that matter. It was simply a move intended to please (Hugo) Chavez," he added.
Ahmadinejad critics allege the President's wish to control the ministry stems from his wish to use the wealthy ministry's resources towards electoral ends, particularly with the upcoming parliament elections in March. Similar accusations were made by his rivals in the presidential race who allege municipality money was used for his campaign. His successor in the Tehran municipality has made no secret of the huge sum of money spent without proper documentation during Ahmadinejad's tenure but the issue has never been investigated.
"From the President's perspective the oil ministry is supposed to serve like the financial department of the municipality (during his tenor as mayor of Tehran), as a piggy bank at his disposal," reformist Shojapourian was quoted by Aftab as saying.
IPS
Iran's key oil industry could plunge into crisis, oil experts have warned, if President Mahmoud Ahmadinejad does not urgently appoint a replacement for Seyed Kazem Vaziri Hamaneh who was sacked as oil minister two weeks ago in a major cabinet reshuffle.
''It appears that the decision to dismiss the oil minister was taken when parliament is prevented from voting for a new minister for a month, because of the summer holiday recess,'' the statement by oil ministry experts said, referring to rumours that Ahmadinejad intended to postpone presenting his candidate for as long as the law allows him -- three months.
Meanwhile, various projects as well as negotiations on oil and gas deals have been kept pending. Oil accounts for 70 percent of Iran's export earnings and the country is the world's fourth largest exporter.
Hamaneh and Alireza Tahmasbi, minister of industries and mines, were dismissed on Aug. 12. The two ministers were followed on their way out of the cabinet by Mohammad Sheibani, governor of the Central Bank of Iran (CBI). The CBI governor had several times warned about the thoughtless expenditure of oil revenues and expressed his opposition to reduction in interest rates.
At his farewell ceremony on Aug 18, Hamaneh defended his performance as oil minister during the past two years and warned that certain (political) groups were attempting to destroy the existing structure of Iran's oil industry in the same way that others had unsuccessfully tried to liquidate the country's army soon after the 1978 Islamic Revolution, Iranian Students News Agency (ISNA) reported.
The former minister was also quoted by ISNA as saying he had not resigned earlier as he thought himself capable of continuing to serve and that a replacement fell within the President's jurisdiction.
Ahmadinejad has sacked four ministers of his cabinet during his two years in office. The minister of welfare and social security and the minister of cooperatives were dismissed from the cabinet last year. They were followed by vice-president and head of the country's management and planning organisation Farhad Rahbar.
The organisation itself was liquidated by the President later and its responsibilities were transferred to the President's Office.
"President Ahmadinejad's inability to solve economic problems had been predicted by experts early on... the effects of his failure are now apparent in spite of the parliament's relatively high coordination with him after two years of carrying out his visions in economy," the 'Kargozaran' reformist daily, which is close to former president Akbar Hashemi Rafsanjani, said in an editorial that followed the sackings.
"(By sacking the ministers in question) the President can relate certain economic failures of the government to the inefficiency of the sacked ministers...the two ministers had never taken any steps against the policies of the government and the President. Altering policies may be a more resourceful step (by the President) than replacing individuals," the editorial said.
Hamaneh got the vote of confidence of the Iranian parliament as oil minister in December 2005 after the generally sympathetic and supportive hard line legislative body refused to vote for the other two candidates proposed for the post by Ahmadinejad, and another candidate, a close associate and advisor of the President, withdrew just a day prior to the parliament voting fearing rejection.
"The parliament granted its vote of confidence to Hamaneh because even the hard line dominated parliament could well see the oil minister had to be someone from among the ministry executives and well familiar with its work. The other candidates had no experience or qualifications in the field but were trusted by the President," an analyst in Tehran requesting anonymity told IPS.
"Ahmadinejad needs someone from outside the ministry who has no reservations towards realising the President's wish to purge the ministry of an allegedly corrupt group of executives connected with his political opponents. The group the President wants out consists mainly of technocrats with affiliations or sympathetic to Kargozaran Party and Rafsanjani," he said.
"Now that he has sacked the minister he can have three months before he presents another candidate to the parliament. If he uses all the time legally allowed, he will be able to accomplish through the supervisor he has appointed to lead the ministry in the interim what the former oil minister refused to comply with, i.e., to get rid of political opponents and anyone who dares to resist his visionary plans," he added.
In fiery speeches delivered during his tours of provinces, Ahmadinejad has repeatedly talked of his determination to eliminate 'the oil mafia' whom he accuses of misappropriation of the ministry resources and corruption.
In an interview, given soon after taking office in December 2005, Hamaneh, an oil ministry veteran himself, denied the existence of any such mafia and defended the reliability and financial trustworthiness of ministry executives and continued to do so to his last day in office.
Parliament member Hasan Moradi who is a member of its energy committee told Aftab News Agency that the dismissal of the oil minister had nothing to do with a controversial gas deal signed recently to sell gas to India and Pakistan.
Critics, including former deputy oil minister Nejad Hosseinian, consider the deal very detrimental to Iranian interests. Eighty one parliament members have signed a motion to oblige the government to obtain parliament's approval on gas deals, including the deal already made with India and Pakistan.
Hamaneh had good relations with the energy committee, reformist legislator and committee member Valiollah Shojapourian was quoted by Aftab as saying. "At a time when huge and important contracts in the oil industry are being negotiated and the issue of gasoline rationing has become very sensitive, dismissal of the oil minister whose plans were supported by the energy committee was wrong and not based on any kind of expertise," he said.
Deputy chairman of the energy committee Hossein Afarideh told Aftab that the minister had refused to appoint two individuals from outside the oil ministry that the President wanted as a ministry deputy and as managing director of one of the oil ministry's affiliated companies. The minister had insisted the individuals lacked the required qualifications for the positions.
''Ahmadinejad wants to be the sole player in the game and all ministers are required to comply with his wishes even if their reason and expertise demand otherwise. The minister of industries and mines stubbornly refused to nominate the President's candidates to certain positions and he, too, was sacked,'' an observer in Tehran told IPS on condition of anonymity.
"There are also speculations that the oil minister refused to agree to the President's demands to give preference to selling oil and oil products at reduced prices to certain buyers recommended by him. Ahmadinejad aims to attract much needed allies among other countries and selling them cheaper oil is a good way to achieve this," he said.
"Such moves can be totally pointless economically. For example, to everybody's surprise a direct flight line was recently established on the President's orders between Tehran and Caracas. Very few Iranians ever travel to Venezuela or other countries in that region for that matter. It was simply a move intended to please (Hugo) Chavez," he added.
Ahmadinejad critics allege the President's wish to control the ministry stems from his wish to use the wealthy ministry's resources towards electoral ends, particularly with the upcoming parliament elections in March. Similar accusations were made by his rivals in the presidential race who allege municipality money was used for his campaign. His successor in the Tehran municipality has made no secret of the huge sum of money spent without proper documentation during Ahmadinejad's tenure but the issue has never been investigated.
"From the President's perspective the oil ministry is supposed to serve like the financial department of the municipality (during his tenor as mayor of Tehran), as a piggy bank at his disposal," reformist Shojapourian was quoted by Aftab as saying.
IPS