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| New Iran Battle Brews Over Contracts With Foreign Oil Titans | |
| (35 minutes later) | |
| TEHRAN — A political battle is taking shape in Iran over any new foreign role in developing the country’s enormous oil wealth, only a few weeks after the Iranian nuclear deal with foreign powers relaxed tough economic sanctions. | |
| The battle pits hard-liners, including some who opposed the nuclear deal, against moderates aligned with President Hassan Rouhani, who has touted that deal as denoting a new economic era for Iran. Already the battle is threatening to complicate efforts to bring in much-needed foreign investment for Iran’s outdated oil industry, which remains a critical source of revenue for the country. | The battle pits hard-liners, including some who opposed the nuclear deal, against moderates aligned with President Hassan Rouhani, who has touted that deal as denoting a new economic era for Iran. Already the battle is threatening to complicate efforts to bring in much-needed foreign investment for Iran’s outdated oil industry, which remains a critical source of revenue for the country. |
| On Saturday, hard-line students gathered in front of the Oil Ministry in Tehran to protest the terms of a proposed contract that would permit foreign oil companies to help revitalize outdated wells and infrastructure. The proposal amounted to “the plundering of national wealth,” the students shouted. | |
| Dozens of protesters were arrested by riot police officers who “severely beat up female students,” the semiofficial Fars news agency reported. | Dozens of protesters were arrested by riot police officers who “severely beat up female students,” the semiofficial Fars news agency reported. |
| At the same time, new doubts have arisen about a conference organized by the Oil Ministry scheduled for February in London, where the contract was to be presented. A ministry official was quoted on Saturday by Seda, an Iranian magazine, as saying that the conference had been canceled. | At the same time, new doubts have arisen about a conference organized by the Oil Ministry scheduled for February in London, where the contract was to be presented. A ministry official was quoted on Saturday by Seda, an Iranian magazine, as saying that the conference had been canceled. |
| The official, Ali Kardor, deputy head of the national oil company, was quoted as saying that there was no need for such a conference because bidding by foreign oil companies would be held in May. But he also suggested that the conference had been canceled because Iranian participants had faced problems obtaining visas to attend. | The official, Ali Kardor, deputy head of the national oil company, was quoted as saying that there was no need for such a conference because bidding by foreign oil companies would be held in May. But he also suggested that the conference had been canceled because Iranian participants had faced problems obtaining visas to attend. |
| It remains unclear precisely why the conference was canceled. It had been announced and postponed four times, hinting at disagreements over the terms. | It remains unclear precisely why the conference was canceled. It had been announced and postponed four times, hinting at disagreements over the terms. |
| The protests in front of the Oil Ministry appear to have originated partly over anger at President Rouhani’s trip last week to Italy and France, where he signed a memorandum of understanding with the French firm Total to export up to 200,000 barrels of Iranian crude oil day, the first deal following the lifting of the sanctions. | |
| Iran’s oil industry needs around $150 billion in investments, industry experts have estimated. The lifting of the sanctions on Jan. 16 allows oil majors such as Anglo-Dutch Shell, Total, Spain’s Repsol and ENI of Italy to return to Iran where they had all long been active before sanctions started biting in 2012. | |
| American oil companies are banned under United States law from working in Iran. | American oil companies are banned under United States law from working in Iran. |
| The proposed contract for foreign oil companies, known as the “Iran Petroleum Contract,” is meant to replace older contracts that industry officials regard as obsolete. Under the proposal, outside oil companies would gain rights to a set percentage of Iran’s enormous oil reserves for 20 or 25 years. | The proposed contract for foreign oil companies, known as the “Iran Petroleum Contract,” is meant to replace older contracts that industry officials regard as obsolete. Under the proposal, outside oil companies would gain rights to a set percentage of Iran’s enormous oil reserves for 20 or 25 years. |
| According to Reza Zandi, an Iranian journalist who specializes in the oil and gas industries, the issue concerns language in the Iranian Constitution, which prohibits privatization or foreign ownership of the exploration and production sections of the oil industry. The proposed contract has been interpreted by some as circumventing that prohibition. | According to Reza Zandi, an Iranian journalist who specializes in the oil and gas industries, the issue concerns language in the Iranian Constitution, which prohibits privatization or foreign ownership of the exploration and production sections of the oil industry. The proposed contract has been interpreted by some as circumventing that prohibition. |
| Who owns the oil is an especially sensitive subject in Iran, where Britain controlled almost all crude in the first half of the last century, paying Iranian rulers next to nothing in return. | Who owns the oil is an especially sensitive subject in Iran, where Britain controlled almost all crude in the first half of the last century, paying Iranian rulers next to nothing in return. |
| In 1953, the country’s first democratically chosen prime minister, Mohammad Mossadegh, nationalized the country’s oil industry, angering the British who in turn encouraged the United States to organize a coup d’état in Iran. Mr. Mossadegh was ousted from power but Britain never regained control of Iran’s crude. | In 1953, the country’s first democratically chosen prime minister, Mohammad Mossadegh, nationalized the country’s oil industry, angering the British who in turn encouraged the United States to organize a coup d’état in Iran. Mr. Mossadegh was ousted from power but Britain never regained control of Iran’s crude. |
| Opponents of the new contract say that it will allow oil majors to control at least a part of Iran’s oil, which they regard as national wealth. They accuse the Oil Ministry and Mr. Rouhani of sweetening the proposed contract to such an extent that foreign companies will be able to all but own oil wells. | Opponents of the new contract say that it will allow oil majors to control at least a part of Iran’s oil, which they regard as national wealth. They accuse the Oil Ministry and Mr. Rouhani of sweetening the proposed contract to such an extent that foreign companies will be able to all but own oil wells. |
| Hamidreza Taraghi, a political analyst with close ties to some of Iran’s highest leaders, said the proposed contract “means a return to pre-Mossadegh times, when the consortiums had the upper hand in everything.” | Hamidreza Taraghi, a political analyst with close ties to some of Iran’s highest leaders, said the proposed contract “means a return to pre-Mossadegh times, when the consortiums had the upper hand in everything.” |
| With oil constituting at least one-third of Iran’s annual income, the issue goes far beyond just the Oil Ministry or its subsidiary, the National Iranian Oil Company. All major centers of power are involved in some way or another, and the increasing protest over the proposed contract illustrates differences of opinion over its terms, analysts say. | With oil constituting at least one-third of Iran’s annual income, the issue goes far beyond just the Oil Ministry or its subsidiary, the National Iranian Oil Company. All major centers of power are involved in some way or another, and the increasing protest over the proposed contract illustrates differences of opinion over its terms, analysts say. |
| In November, the cabinet endorsed the contract, but the Expediency Discernment Council, an oversight body, will examine its content, the semiofficial Mehr news agency reported on Saturday. | |
| “The cancellation of the conference gives the opportunity for more domestic consensus on the oil contract,” Mr. Zandi said. | “The cancellation of the conference gives the opportunity for more domestic consensus on the oil contract,” Mr. Zandi said. |
| One influential conservative lawmaker, Ahmad Tavakkoli, expressed support for the student protest and said that the contract language needed much more careful scrutiny. “Even dozens of street protests are too few to criticize the agreement,” Mr. Tavakkoli was quoted as saying by Fars. | One influential conservative lawmaker, Ahmad Tavakkoli, expressed support for the student protest and said that the contract language needed much more careful scrutiny. “Even dozens of street protests are too few to criticize the agreement,” Mr. Tavakkoli was quoted as saying by Fars. |