Zangeneh Defends Oil Contracts, Emphasizes 'Rationality' in Foreign Policy

While it is reported that the Supreme Leader of the Islamic Republic has criticized the new model of oil contracts, and the Leader's representative in Khorasan Razavi has called this model 'exploitative and colonial', Iran's Minister of Oil defended this new model, stating that 'the best contract in the world' is to grant ownership of an oil or gas field to a foreign company for '40 or 50 years'. On the other hand, while Ali Khamenei, the Supreme Leader, has described Iran's 'great economic challenge' as a result of 'showing weakness' against the 'enemy', the Minister of Oil stated on Friday, July 6, that 'it is not necessary to be enemies or friends with our counterpart', emphasizing the prioritization of national interests and stating that 'nothing in material relationships and governance is sacred'. Iran and the French company Total signed a 20-year contract on July 12 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 from the Ministry of Oil of Hassan Rouhani's government known as 'IPC'. This contract was signed amid criticism from Alireza Zakani, a conservative member of the ninth parliament, who recently harshly criticized the contract with Total, stating that the Supreme Leader's objections to the new model of oil contracts have not yet been resolved. Meanwhile, Ahmad Alamolhoda, the Supreme Leader's representative in Khorasan Razavi, called this contract 'an exploitative and colonial move by the West', and Hossein Shariatmadari, the Leader's representative in the Kayhan newspaper, also protested against the Iranian President's meeting with the CEO of Total, describing the contract as 'damaging'. In response to these criticisms, Bijan Namdar Zangeneh, Iran's Minister of Oil, on Saturday, July 17, in an interview with the Iranian Labor News Agency, ILNA, defended the 'legality' of signing the contract with Total, stating that the official authority for reviewing and ensuring the compliance of contracts is 'a seven-member group designated by the President'. Zangeneh: The best type of contract is not feasible in Iran due to political and cultural reasons. According to ILNA, Bijan Namdar Zangeneh also spoke about the new contract model and the obstacles it faces on Friday, July 6. The Minister of Oil emphasized that 'we really need to see what our national interests are', questioning the meaning of statements like 'who is our friend in the world' or 'which country is our brother'. He stated that generally, brotherhood, friendship, and companionship are defined in relation to national interests, and the same applies to today's political relationships; alliances are formed among individuals in the world. He added, 'We become friends with certain individuals and groups for national interests, and we distance ourselves from others for our national interests. Our national duty is to consider national interests in the long term, just as the government and system are currently doing.' Zangeneh considered cultural elements as among the most influential factors, adding, 'Information must be processed and thought through and evaluated against theory and hypothesis; therefore, we must decide, then see the effects and, if necessary, correct them without being dogmatic. Nothing in material relationships and governance is sacred.' Zangeneh's statement that 'nothing in material relationships and governance is sacred' comes at a time when Ali Khamenei, the Supreme Leader, has repeatedly emphasized the 'sacred goal of the freedom of Quds' as one of the pillars of the Islamic Republic's foreign policy and has regarded various instances of 'revolutionary fervor' in governmental relations as 'sacred'. The Iranian Minister of Oil continued his remarks by stating, 'I once said that the best contract in the world is a concession contract that grants a field to a company for the long term and ownership of the field for 40 or 50 years. However, due to political, historical, social, and cultural reasons, we cannot do this. If something cannot be acted upon socially and culturally, we are making a futile effort; it may be accepted, for example, 40 years later.' He emphasized, 'However, if something is wrong, we will correct it, we will change it. Just as we have made many changes to the new oil contract model, we have shown that we are not rigid individuals; we are reformists and open to interaction. In principle, it is not right to stick to our words for 40 or 50 years; if something is wrong, it should be corrected.' Zangeneh: The key to solving the country's problems is thinking. The Iranian Minister of Oil emphasized that 'the key to solving the country's problems is rationality and thinking', stating, 'Many things are relative; good and bad coexist. It is not necessary to be enemies or friends with our counterpart. In areas where we have commonalities, we work together and move forward, and in areas where we have differences, we do not. Sometimes we are friends, and sometimes we have disagreements.' This emphasis by Zangeneh comes at a time when Ayatollah Ali Khamenei, the Supreme Leader, states that Iran's 'great economic challenge' is a product of 'showing weakness' by some against the 'enemy' and has called for everyone to 'stand firm' to 'overcome the enemy'. Some critics of the oil contract with Total 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. According to ILNA, Bijan Namdar Zangeneh continued on Friday, emphasizing that 'our reasoning should not be that we either fight or are brothers', acknowledging: Some either shout 'freedom must be achieved' or 'execution must be carried out'; while between freedom and execution, there are thousands of other judgments. 'We are not a wealthy nation; we have an illusion of wealth.' The Iranian Minister of Oil continued by criticizing the statements of some individuals regarding Iran's oil resources, saying, 'They say Iran's value lies in its boundless underground wealth, but as an engineer dealing with numbers, I do not accept exaggerated terms like boundless, immense, or very much.' These statements come at a time when various officials of the Islamic Republic always emphasize the 'great wealth' of Iran in their speeches. He stated, 'The total value of our reserves does not reach 15 trillion dollars; therefore, per capita income does not even reach 5 thousand dollars; this 15 trillion dollars is the income of the United States for one year. So we are not a wealthy nation; we have an illusion of wealth, but this does not mean that oil cannot be ineffective in driving the country's development engine.' Zangeneh criticized some individuals regarding oil revenues, saying, 'Some say they take our fifty-dollar oil and return it to us as a thousand-dollar petrochemical product. There is no more illogical statement than this. That petrochemical has invested 4 billion dollars. So let’s not say it this way; the public says, 'Then what happens to the 950 dollars in between? They must be eating it.' He continued, 'With oil, one cannot have a thirty-thousand-dollar per capita income; rather, the main engine of the country is entrepreneurship and creativity, not that we all sit and wait for oil to revive the country. How much income does oil really generate? If we produce six million barrels of oil daily, and for these two million barrels, we also added 100 trillion tomans in income, nothing will happen. They issue a 20 percent salary increase decree, and all the money is gone! So oil can be a driving force, especially in the development phase, but for the future, we cannot think solely about oil.'