Approval of Iran-TOTAL Contract by High Council for Oil Resources Supervision

The head of the Energy Commission of the Islamic Consultative Assembly announced on Tuesday, August 1, that the controversial oil contract between Iran and the French company TOTAL has been approved by the "High Council for Oil Resources Supervision" of the country. According to ILNA news agency, citing the House of the Nation news agency, Fereydoun Hassanvand stated that this contract has been reviewed by "the Parliament and the Attorney General of the country" and the news of its approval will be published after these reviews. This contract has faced severe criticism from conservatives for weeks, with some referring to it as a 'Turkmenchay Treaty', a contract that was signed between Iran and Tsarist Russia, resulting in the loss of vast territories of Iran. The French oil giant TOTAL and Iran signed a 20-year contract for the development of Phase 11 of the South Pars gas field on July 2. TOTAL will hold a 50.1% share as the project operator, while the Chinese company CNPC and Petropars Iran will hold 30% and 19.9% shares, respectively, in the consortium for the development of Phase 11 of South Pars. This is the first contract based on Iran's new oil contract model known as IPC, which was developed under the Ministry of Oil during Hassan Rouhani's administration and is signed with foreign companies. However, just a few days after the signing of this contract, conservatives began a severe attack and criticism of Hassan Rouhani's government for signing it. Among them, Alireza Zakani, a conservative representative of the 9th Parliament, strongly criticized the contract with TOTAL, stating that the Supreme Leader's objections to the new model of oil contracts still stand. Reports indicated that Ali Akbar Mohammadi, from the Supreme Leader's office, was also present during the contract signing. On the other hand, Ahmad Alamolhoda, the representative of the Supreme Leader in Khorasan Razavi, called this contract "an exploitative and colonial move by the West," and Hossein Shariatmadari, the Supreme Leader's representative at Kayhan newspaper, deemed the contract "damaging" while protesting the Iranian President's meeting with the CEO of TOTAL. In response to these criticisms, Bijan Namdar Zangeneh, the Minister of Oil, defended the "legality" of signing the contract with TOTAL in an interview with ILNA on Saturday, July 8, stating that the official legal authority for reviewing and ensuring the compliance of contracts is "a seven-member group designated by the President." The new oil contracts, known as IPC, according to supportive experts, make investment more attractive for foreign companies by eliminating risks associated with foreign firms. Supporters of this type of contract argue that given the old oil wells and Iran's shared fields with Qatar and Iraq, only through significant foreign investment can Iran secure its share of these fields. Now, the head of the Energy Commission of the Iranian Parliament states that this contract has also been approved by the High Council for Oil Resources Supervision, and during the review process of this contract, "specialists in contracts, such as experts from the Ministry of Oil and the head of the seven-member compliance committee, were present." According to Fars news agency, the members of the oil contract compliance committee, appointed by Hassan Rouhani in December 2016, include Mohammad Foruzandeh, Hooshang Naderian, Mohammad MirMohammadi, Mohsen Mohibi, Davood Danesh-Jafari, Gholamhossein Nozari, and Gholamreza Shafiei. Conservatives have not yet reacted to this news.