Urgent Proposal to Halt Contract with Total Excluded from Parliament's Agenda

The urgent proposal to halt the contract with Total was removed from the agenda of the Iranian Parliament on Wednesday due to a lack of sufficient signatures from representatives. The Speaker of Parliament announced that a committee composed of the judiciary, Parliament, and other agencies will oversee this contract. 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 oil contract model of the Ministry of Oil under President Hassan Rouhani, known as IPC. Several officials close to Ayatollah Ali Khamenei criticized granting a multi-year concession to a foreign company, describing it as a 'exploitative and colonial move by the West' and 'damaging'. Some critics of the contract also questioned why Rouhani's government engaged in a deal with a French company whose government allows the Mojahedin-e Khalq organization to hold meetings. In the open session of Parliament on Wednesday, July 12, Bijan Zangeneh, the Minister of Oil, provided explanations regarding the contract with Total, after which the urgent proposal to halt the contract was introduced. This urgent proposal was presented while, according to opposing representatives, such proposals in the Iranian Parliament have previously only been introduced in 'war conditions' during the Iran-Iraq war. However, the proponents of the proposal stated that they had only until the end of Wednesday to stop the contract, which is why it was presented as an urgent proposal. Jawad Karimi Qodusi, a representative from Mashhad and a staunch critic of Rouhani's government, supported the proposal, saying that a 'club' of Western countries intends to undermine Iranian oil specialists with oil contracts. He emphasized that the Islamic Republic is capable of exploiting its oil and gas fields independently and 'does not need foreign investment'. A verbal altercation occurred between supporting and opposing representatives, with Mostafa Kaveh Khabar, a reformist representative, calling the proposal a 'hindrance' to Rouhani's government and sarcastically noting that eight of the signatories are clerics in Parliament who 'must have oil expertise'. This statement led to protests from several conservative clerics in Parliament, including Mojtaba Zolnouri, resulting in a brief verbal confrontation that disrupted the session. Ultimately, Kaveh Khabar stated that he did not intend to insult the clerics and apologized if his words were interpreted as such. Following this, Hassan Norouzi, a clerical representative, questioned why only Total was allowed to invest in Iran among foreign companies. Another representative from Robat Karim asked why the Ministry of Oil did not assign the South Pars exploitation project to Russian companies, which are allies of the Islamic Republic and have troops present in Syria to support Bashar al-Assad. This statement was made while Russian companies have signed seven memorandums for the development of Iranian oil fields, and the Russian energy minister has stated that the value of exploration and development projects in Iran by Russian companies could reach $20 billion. Meanwhile, the Iranian Minister of Oil announced in the open session that the Speaker of Parliament had declared on September 12, 2016, that the new model of Iran's oil contracts does not conflict with the laws. Bijan Zangeneh emphasized that the contract with Total is 'security-enhancing' for Iran, as both France and China, the contracting parties, are permanent members of the UN Security Council, and 'any event that occurs would jeopardize their material interests, and they would incur losses'. He stressed that if for any reason the contractor stops or abandons the project during execution, 'no amount' will be paid to them. Zangeneh stated that the duration of this 20-year contract is contingent upon the investment yielding results, and 'for the investment repayment period, we will not pay even one cent'. The conservative opposition to the development of Phase 11 of South Pars comes as this area is jointly owned with Qatar, which has so far taken the largest share of this partnership. The day after the contract was signed between Iran and Total, Qatar announced it would increase its gas production by 30% by 2024. Eshaq Jahangiri, the First Vice President, claimed last year without detailing that some countries sharing oil fields with Iran are 'spending and incurring costs within the country' to prevent new oil contracts for Iran. On the other hand, according to the Minister of Oil, a one-year delay in one phase of South Pars delays work by five years and costs Iran about $20 to $22 billion. Zangeneh emphasized that $200 billion needs to be invested in this project, which internal resources are insufficient to cover, and about 65 to 70 percent of it must be sourced from foreign resources. The Minister of Oil also reacted to criticisms regarding the secrecy of this contract, stating that according to a parliamentary resolution, the text of oil contracts is 'classified'. After Zangeneh's remarks, Ali Larijani, the Speaker of Parliament, stated that a supervisory committee, including representatives from the judiciary and the heads of two parliamentary commissions, will oversee this contract. Previously, the Minister of Oil had announced that a seven-member committee, including representatives from the Supreme National Security Council, the presidency, the auditing organization, and four former oil ministers, had approved this contract. According to the Iranian Ministry of Oil, the development of Phase 11 of the South Pars gas field requires over $4.8 billion in investment, which 'internal resources are not sufficient to meet this amount'. The report states that upon the successful completion of this project, an additional 56 million cubic meters (equivalent to two billion cubic feet) will be added to Iran's extraction capacity from the South Pars gas field shared with Qatar.