Oil sector in stasis as nominee withdraws

11 November 2005
Sadeq Mahsouli has withdrawn his nomination as oil minister, causing a new political blow to beleaguered President Ahmadinejad and further delaying any new activity in the energy sector. Mahsouli withdrew shortly before Majlis (parliament) deputies were due to cast a vote of confidence in his nomination (see Briefing, page 8; MEED 4:11:05).

Mahsouli is the third name Ahmadinejad has tried to put forward for the job. In August, the Majlis threw out his nomination of Ali Saeedlou, an old ally from Tehran Municipality. Before his nomination of Mahsouli, the president was dissuaded from pushing forward Aliasghar Zaeri. All three of the men are former members of the Islamic Revolutionary Guards Corps (IRGC) and ideologically close to Ahmadinejad, but inexperienced in the oil sector.

It was uncertain whether Mahsouli would win Majlis approval. Although one faction of about 80 deputies has voted for all the president's political appointees, even when they have no experience, more than 150 votes are needed to secure an appointment. Many deputies had complained that the president had again submitted the name of a man who had no previous energy experience.

Shortly before the vote, his integrity was also called into question by the Majlis article 90 commission, which deals with breaches of the constitution. It is investigating improper activity in a contract that Mahsouli was party to, worth more than $6 million.

'The gap between the president and the Majlis is getting bigger,' says Saeed Laylaz, a Tehran-based political and economic analyst. 'The Oil Ministry is the most important cabinet post. We have had no minister now for three months - that isn't very good for the country.'

Mahsouli said he was stepping down because he believed he would not be able to win emphatically enough to be a strong minister. 'I would prefer the nomination of someone else who would win more votes for this great responsibility,' he said in a letter read out to the Majlis on 8 November.

Ahmadinejad has indicated that he will continue to search for somebody from outside the oil sector to take the job. Oil veterans are worried that an inexperienced man will not be able to carry out the complex duties needed in the sector. Besides heading OPEC's second largest producer, the oil minister must weigh complex decisions on contract awards, gas export strategy and the expansion of the country's booming petrochemicals industry.

During the past few months there has been little activity in the sector as all major decisions await the formation of a new team at the top of the ministry. That is having a knock-on effect on the award of key contracts.

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