Ministry of Oil Responds to Critics of Total Contract

Following increased criticism from government opponents and supporters of the Supreme Leader of the Islamic Republic regarding the signing of a gas development contract with the French company Total, the Ministry of Oil issued a statement on Tuesday, July 9, aimed at "clarifying public opinion" and defending this contract. According to ISNA news agency, the statement from the Public Relations Department of the Ministry of Oil addressed several "ambiguities" raised by critics regarding this contract and responded to each of them separately; these "ambiguities" pertain to the figures mentioned by critics, the "reason for using foreign companies," the issue of "the high cost of implementing the project," and the "legality" of the contract signing process. Iran and the French company Total signed a 20-year contract on July 3 for the development of Phase 11 of the South Pars gas field, which is the first contract with a foreign company based on the new model of oil contracts of the Ministry of Oil under President Hassan Rouhani, known as "IPC." Various officials close to Ayatollah Ali Khamenei have criticized granting several years of privileges to a foreign company, describing it as "an exploitative and colonial move by the West" and "damaging." Some critics of the contract have also questioned why Rouhani's government entered into a deal with a French company whose government allows the Mojahedin-e Khalq Organization to hold meetings. On the other hand, Abadollah Abdollahi, the commander of the economic branch of the Islamic Revolutionary Guard Corps (IRGC), has complained about the Rouhani government for what he called "ignoring" the IRGC in this contract, deeming it "really unfair." The Public Relations Department of the Ministry of Oil, in its statement responding to these criticisms, wrote: "The issue of the share of the parties to the contract is one of those matters that has been commented on without sufficient information, and sometimes figures have been mentioned that are not accurate at all." The Ministry of Oil further explained that "the contracting party of the National Iranian Oil Company is a consortium consisting of Total France, CNPC China, and Petropars Iran, such that Total's share is 50.1%, CNPC's share is 30%, and Petropars' share is 19.9%, and each company is obliged to provide capital according to its share; therefore, it is clear that more than 50% of the required capital for the implementation of this contract must be provided by the French company Total." This explanation was provided after Ahmad Alamolhoda, the representative of the Supreme Leader in Khorasan Razavi, called this contract "exploitative and colonial" and stated that the "behind-the-scenes" of the contract with Total involves "the transfer of 75% of this contract to this French company." The Ministry of Oil's Public Relations statement also addressed the complaint from the commander of the Khatam al-Anbia Headquarters, stating: "The second ambiguity raised about the recent oil contract is the reason for using foreign companies for the implementation of this development project. Engineers, specialists, and experts in the energy sector are aware that capable domestic companies active in the oil industry, despite their numerous capabilities, do not possess the necessary technology for constructing a gas pressure boosting platform at sea, while considering the decline in gas production in the South Pars field in the coming years, the oil industry urgently needs this technology." The statement added: "Moreover, the implementation of this contract has created a valuable opportunity for transferring knowledge and technology to the Iranian company Petropars as one of the consortium members. Additionally, besides the lack of the required technology, the shortage of financial resources also necessitated that the contract be concluded with a consortium led by an international company. The implementation of this contract requires more than $4.8 billion in investment, and domestic resources are not sufficient to provide this amount of funding." This explanation comes after the newspaper Javan, close to the IRGC, wrote on Saturday, July 6, with the headline "We expected encouragement for job creation, not sarcasm," stating: "Officials say foreigners must come and invest while the IRGC has repeatedly announced its readiness to provide financial support as well," and "there is currently 1.3 trillion tomans in the hands of the people, and if we create the necessary conditions to attract it, we can direct this investment to the needed sectors." The Ministry of Oil's Public Relations statement mentioned: "Regarding the high cost of implementing the development project of Phase 11 of South Pars, it should be noted that if this contract were executed during sanctions, the investment figure would certainly have increased to 2 or 3 times the current amount, and that we can today complete our projects at a significantly lower cost and with newer technical knowledge is not hidden from anyone, and this is certainly a result of the JCPOA, lifting of sanctions, and breaking monopolies and prices." The statement concluded by emphasizing the "legality" of all stages of the preparation and signing of this contract. In recent days, Bijan Namdar Zangeneh, Iran's Minister of Oil, his deputy, and some other government officials have responded to the critics regarding the Total contract, and Mr. Zangeneh even advised officials to set aside the black-and-white view of "friends and enemies" in foreign relations and to consider Iran's national interests. Hassan Rouhani and his government have recently faced tensions with the IRGC over criticism of the IRGC's "interference" in economic affairs, and in addition, some of Rouhani's insistences on other issues such as UNESCO cultural matters and the debate over the historical origins of the Guardianship of the Islamic Jurist have led some supporters of Ayatollah Khamenei to warn that if the current trend continues, Hassan Rouhani may face a fate similar to Abolhassan Banisadr. Abolhassan Banisadr was the first president in the Islamic Republic who was dismissed by the Supreme Leader at the time and left the country. Eshaq Jahangiri, the first vice president of Mr. Rouhani, recently addressed these protesters, stating that "we must accept the people's vote," emphasizing that "the government will not deviate from its path."