Knives out over Oil Ministry appointment

13 January 2006
President Ahmadinejad on 2 November nominated Sadeq Mahsouli as oil minister, shortly after political pressure forced him to withdraw another little-known name for Iran's top cabinet post. Majlis (parliament) deputies must now vote to ratify the new appointment, but it is far from clear they will do so. Mahsouli, who has no experience in the oil sector, has already been privately attacked by members of the Majlis, which in August scotched Ahmadinejad's first choice for the post, Ali Saeedlou.

Like the president, Mahsouli's background is in the Islamic Revolutionary Guards Corps (IRGC), but he has also served as governor of the western city of Urumiyeh and as a deputy defence minister. He shares the populist ideals of Ahmadinejad, combining socialist economics with conservative social and religious principles.

Ahmadinejad had earlier told the Majlis energy commission he would propose Aliasghar Zaeri, also without oil sector experience, but head of the university professors' Basij society and vice-chancellor of Imam Hossein University, which is closely affiliated to the IRGC. That he was forced to retract this name will be seen as an embarrassing u-turn.

The post has been the subject of a tense political battle between different factions in the conservative camp and the oil sector. Technocrats had pressed the case for the nomination of Mohammed Reza Nematzadeh, head of National Petrochemical Company (NPC), or former deputy oil minister and UN ambassador Mohammed Hadi Nejad-Hosseinian.

Another conservative, Ali Beheshtian, had been considered a leading candidate a month ago, but is now thought more likely to become head of National Iranian Oil Company (NIOC). He comes from within the Oil Ministry structure, having been head of National Iranian Southern Oil Company (NISOC) and a deputy minister.

The oil minister's post is one of the most important in Iran because it has a significant impact on foreign policy and the economy. The minister must be able to handle intense media scrutiny as one of the more powerful OPEC members. Domestically, the job involves direct management of a sector that last year accounted for 25 per cent of gross domestic product, 80 per cent of exports and 30 per cent of all government revenue.

The lack of leadership at the top of the ministry has effectively frozen all major work. Major projects are now running months behind schedule as leading state companies are unable to sign contracts. Policy on key issues such as foreign investment in the sector remains completely unclear.

During the election, President Ahmadinejad made oil sector reform one of his biggest issues. He pledged to oust what he called the 'oil mafia' running the sector for its own benefit, and to bring the nation's oil money to the tables of its poorest members.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications