Thursday, 04 August 2011

Iran Names Controversial Head of OPEC

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As if the United States did not have enough issues with OPEC already, news reports reveal that there may be more cause for concern. According to the British publication the Guardian, Rostam Ghasemi will be the new president of OPEC. Ghasemi is a commander in Iran's Revolutionary Guard, who has been sanctioned by the United States, European Union, and Australia, and has had his assets blacklisted by the U.S. Treasury.

Iran took control of OPEC last October after 36 years under a rotating system, and some contend that with Ghasemi holding the position as president, the Revolutionary Guard will become more influential.

As President Mahmoud Ahmadinejad’s hand-picked nominee, Ghasemi was elected to be Iran's Oil Minister (making him president of OPEC) in an overwhelming vote, with 216 of the 264 deputies voting in his favor.  He is the first commander from the parliamentary force to take a position that is not defensive in nature.

Energy Digital reports:

[Ghasemi] is a Brigadier General in the Iran Revolutionary Guards Corps, the country's prevailing military establishment. [Ghasemi] commands the industrial division of the elite Guards, Khatam al-Anbiya, which is also known for its involvement in Iranian oil projects.

Ghasemi has indicated that his goals as president of OPEC are to secure Iran’s position as the world’s second largest gas producer, and to increase cooperative efforts with Iraq for joint development.

Following his nomination, Ghasemi said, “After my appointment is approved, I will be using Khatam al-Anbiya for oil contracts along with other domestic contractors.” Khatam al-Anbiya is an Iran engineering firm controlled by the Iranian Revolutionary Guard.

Platts, which bills itself as "a leading global provider of energy and metals information," reports of Khatam al-Anbiya that while it has a “better track record than other local contractors in delivering projects,” the firm has been seen as a “pariah on the international scene,” which is likely to “complicate Iran’s efforts to revive a sector plagued by delays and a shortage of cash, modern technology and manpower.”

According to the Guardian, “Iranian state media interpreted the vote as a reaction by Iran’s parliament to international sanctions against the county, especially those which have targeted the revolutionary guards and the country’s nuclear programme.”

Ramedan Sharif, head of the public relations’ unit for the Revolutionary Guard, said of the decision, “The clever and decisive vote of Iranian MPs for engineer Ghasemi to become the oil minister is a meaningful and crucial response to the attacks against the guards from the west’s media empire.”

Emad Hosseini, spokesman for Parliament’s Energy Committee, indicates that Ghasemi was the best choice, “given his relevant background in oil and gas sectors and mastering many projects including the South Pars field as well as other oil projects, and given the fact that he has been in charge of many projects in this industry.”

Some of the more conservatives from Iran are concerned by the decision, however, including Ali Motahari, a well-known MP who once threatened to impeach Ahmadinejad. “The integration of the guard, as a military force, in political and economic power is not in the interests of the system,” he said before the Parliament just prior to the vote. “In neighboring countries, military officials are distancing themselves from politics and power, while it’s the opposite in Iran.”

Western nations are likely perturbed by the election, as Ghasemi has been declared “persona non-grata” by the United States and the European Union, proscribing his entry into those regions, because of his involvement in Iran’s nuclear program.

Likewise, the United Nations Security Council listed IRGC, Khatam al-Anbiya and a number of other companies as being involved in Iran’s nuclear proliferation, and as a result, adopted a UN resolution to free IRGC’s assets to prevent the group from financing its projects.

Platts notes the issues that may develop from these items: “The involvement of IRGC or its subsidiaries would make it difficult to source parts and equipment from foreign companies, which run the risk of being in breach of the sanctions should they have to deal with Khatam al-Anbiya or any other banned entity.”

Similarly, as a result of Ghasemi’s “persona non-grata” status, he may have difficulty traveling to Vienna to attend OPEC meetings.

Some reports state that Ghasemi’s nomination was conditional upon his being able to name his own Deputy Oil Minister, but the President’s office has denied those claims.

Reports do indicate that Amadinejad ally Mohammad Aliabadi will likely be named Deputy Oil Minister.

Ghasemi's position as president of OPEC will not likely unduly affect world oil prices. Any added influence he may have will likely be more than offset by the Saudis, who have made clear on more than one occasion that Saudi Arabia intends to act as a partner with the Western world, not as an adversary.

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