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Tuesday 03 May 2011
Iran Channel -- It’s a classic case of an isolated elite in a dying regime, fighting over the spoils of the nation’s wealth.
Iran’s petrodollars are now under the direct personal control of Supreme Leader Ali Khamenei, his son, and his most trusted inner circle. The Khamenei family has taken control of every aspect of Iran’s oil and gas industry, keeping all contracts, agreements and financial transactions away from parliament and the rest of the government.
The corruption is spectacular. Nobody – not the president, the parliament, the judiciary, or even the highest clerics outside Khamenei’s inner circle – will have any knowledge of or say in what happens to Iran’s petrodollars. Paradoxically, the setup makes it easier for Western countries to impose comprehensive oil sanctions.
Follow the money
IranChannel reported on March 18 that the mullahs in parliament found $11 billion missing from the state-controlled petrodollar fund in Iran’s foreign exchange account. On April 29, Asriran.com reported that a member of parliament declared that not even a dollar was left in that account. Reviewing the current budget, the head of the parliamentary agricultural committee proposed $2 billion from the foreign reserve account to fund water projects, to whom the head of the joint (talfigh) committee replied that nothing, not even a dollar, remained.
Ahmadinejad had stated last October that “others estimate our foreign reserves at $100 billion, but of course it is much more than that,” a sum that Finance and Economy Minister Shamsedin Hosseini reaffirmed on April 17, 2011. Nearly all of these funds are derived from oil exports.
So where did $100 billion disappear to in two short weeks?
It has something to do with a new organization created by the Khamenei team called Petro Nahad. A reformist information service received internal documents about Petro Nahad, and brings us this story.
Khamenei family nepotism
On March 10, 2011, Khamenei decreed that all oil field projects, contracts and oil purchase agreements must be made exclusively by Petro Nahad. All existing companies and organizations responsible for such deals – Petro Sina Arya, Petro Pars, National Iranian Drilling Company (a subsidiary of the National Iranian Oil Company), and the Industrial Development and Renovation Organization (IDRO) – would henceforth operate under Petro Nahad’s direct control.
All contracts relating to gas and oil would now be awarded solely by Petro Nahad. All revenues would be deposited exclusively into an account belonging to Petro Nahad.
Khamenei further directed that all of Petro Nahad’s financial and administrative affairs be assigned to a three-man board of directors, two of whom are members of his family. Those members are: Mojtaba Khamenei, the Supreme Leader’s son; Gholamali Haddad Adel, a member of the regime’s Expediency Council who happens to be Mojtaba Khamenei’s father-in-law; and Majid Hedayatzadeh.
Fazel Larijani, a member of the famous family allied with the Supreme Leader and former diplomat in Ottawa, and Hojatollah Ghanimi Fard, a deputy oil minister since 1997 in charge of marketing for crude oil and NIOC’s overseas divisions, were appointed as international affairs directors for Petro Nahad.
Contracts being cut with China, Russia and Malaysia
Presently, Petro Nahad is negotiating with the China National Offshore Oil Corporation, Gazprom of Russia, and Petronas of Malaysia.
Any Petro Nahad contract is considered confidential, with strict prohibitions against their disclosure. Even though Petro Nahad is a government entity, the contracts are not available to parliament’s budget committee.
Revolutionary Guards commander gets some of the spoils
Fazel Larijani recently brought Revolutionary Guards (IRGC) Commander Mohammad Ali Jafari in on Petro Nahad deal with the United Arab Emirates. The deal reportedly would sell the UAE oil products below market price in exchange for $89 billion in cash and $89 billion in imported consumer goods from Dubai over a 23-year period.
Opportunity for the opposition
The upside to this opaque, corrupt, nepotistic control of Iran’s oil wealth is that the scheme makes it easier for Western democracies to impose sanctions on the regime’s oil sector. All they have to do is embargo Petro Nahad and its subsidiaries.