How Iran Lost the 'National Oil Company House' in London?

In recent days, during the presidential election campaigns, the issue of the Karsanat contract has once again come to attention. While Alireza Zakani and Saeed Jalili claimed that Iran's interests were overlooked in this contract, Mostafa Pourmohammadi emphasized the damages caused by Iran's cancellation of the contract. However, none of these candidates mentioned that in recent months, a court in Britain transferred one of the properties of the National Iranian Oil Company, valued at $125 million, to Karsanat as part of the damages from the contract's cancellation. The High Court of Britain issued its ruling in this regard in late April, resulting from the National Iranian Oil Company's condemnation to pay $2.4 billion to Karsanat in late summer 2021. The estimated value of the building owned by the National Iranian Oil Company in London at that time was £100 million ($125 million), but as Karsanat's legal department states, the National Iranian Oil Company transferred ownership of it to the Iranian pension fund just days before the ruling for the transfer of this building was executed. However, in late April, the High Court of Britain rejected the National Iranian Oil Company's argument for transferring the building to the pension fund and ruled for the transfer of ownership to Karsanat. The National Iranian Oil Company's building in London is located on Victoria Street, overlooking Parliament Square, and is recognized as one of the best office locations in the heart of London with a stunning view of Big Ben. In addition to parts of this complex that have been allocated to commercial companies, parts of it have housed the Iranian state oil company, and according to company registration documents in Britain, at least until 2017, this location was referred to as the correspondence address for the international affairs of the National Iranian Oil Company in London. The Iran-Britain Chamber of Commerce was also based in this building, although this chamber has not had much activity since the return of US sanctions and especially since the ineffectiveness of the European initiative known as INSTEX. The last appointed manager of this office, Mohammad Mohammadi-Pour, the former deputy of international affairs of the National Iranian Oil Company, was dismissed last February. Company registration documents in Britain show that Mohammadi-Pour was appointed as the international affairs manager of the National Iranian Oil Company in London in February 2022, but it is unclear whether he still holds his responsibilities in London after being dismissed from the international deputy position. Recent records of the officials of this office indicate that another address has been listed as the correspondence address, located about a 10-minute distance from this location. Nevertheless, on the website of the National Iranian Oil Company's international affairs department, the address of this company’s office in London is registered on Victoria Street, and Abbas Yalan is mentioned as the manager of this office. Abbas Yalan's name also appears in the company registration information in Britain, where he served as the secretary of this office from October 2017 to July 2019. The ownership of the National Iranian Oil Company's building in London only compensates a small part of a larger compensation that Karsanat has claimed for damages resulting from the contract's cancellation. This amount is only four percent of the compensation that the UAE is seeking in Britain alone. However, the value of this building is negligible compared to the total compensation that the UAE has demanded from Iran for the contract's cancellation. The Minister of Industry stated that Iran has been fined $18 billion in the Karsanat case. However, shortly after this ruling was announced, Karsanat recorded another victory in obtaining compensation from Iran; in mid-May of this year, a court in the US ruled that Iran must pay $2.75 billion to Karsanat. These two, however, are not the only cases opened against Iran by Karsanat, and simultaneously, other courts in Switzerland, the Netherlands, and the UAE are also examining other lawsuits against Iran for the unilateral cancellation of the contract. In June 2014, Mohammad Reza Nematzadeh, the then Minister of Industry and Trade of Iran, who was once the CEO of the Oil Products Company in Mahmoud Ahmadinejad's first cabinet, announced that the Hague Court had condemned Iran to pay an $18 billion fine in the Karsanat case. At the same time, reports indicate that a demand for $32 billion in compensation is also the subject of a legal case against Iran in the 'Commercial Arbitration Court' in Geneva. The so-called Karsanat contract was signed during the second term of Mohammad Khatami's presidency and the tenure of Bijan Zanganeh as Minister of Oil between Iran and the UAE. According to the agreement between the National Iranian Oil Company and Karsanat, it was supposed to export about 14 to 15 million cubic meters of sour gas to the emirate of Sharjah for 25 years starting from 2005 after laying a pipeline from the Salman oil field in the Persian Gulf. This contract was unilaterally canceled during Mahmoud Ahmadinejad's presidency under the claim of 'selling cheap,' and later in 2008, negotiations were held with Karsanat under the leadership of Ali Kordan, the then Minister of Interior, regarding increasing gas prices and reviving the export agreement. However, Ahmadinejad's government officials later announced that Alireza Zakani, the then representative of the parliament, and Saeed Jalili, the then secretary of the Supreme National Security Council, prevented its revival by claiming 'bribery during the contract signing,' and ultimately, the UAE filed a complaint against Iran in the International Arbitration Court in 2009. Bijan Zanganeh called for the criminal prosecution of Jalili and Zakani for 'defamation' during the debates. The Salman oil field was established a decade before the Islamic Revolution during the Pahlavi regime. About one-third of this field is in the waters of the UAE, and the rest is in Iranian waters. Both countries extract 50,000 barrels of oil daily from three oil layers of this field; however, the point is that in the Iranian section, more than 10 million cubic meters of gas associated with oil are also extracted daily, which Iran has been burning and wasting in flares since its establishment due to a lack of investment in gas collection equipment. The UAE was supposed to install gas collection equipment in the Iranian section of the Salman field and receive this gas. This field also has a gas layer that the UAE section was established decades ago, and the Iranian section was established about a decade ago, and in total, Iran was supposed to deliver 14 to 15 million cubic meters of associated gas and gas produced from the gas layer of this field to Karsanat daily. Apart from the heavy fine imposed on the Islamic Republic by the International Arbitration Court, since 2005, when the UAE was supposed to receive gas from the Salman field, about 75 billion cubic meters of associated gas in this field have been burned and wasted in flares. The value of this volume of gas in regional markets at current prices exceeds $25 billion.