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Books on Iran
REPUBLICAN REFERENCE
Area (sq.km)
1.648 million
Population
66,128,965
Capital
Teheran
Currency
Iranian rials
President
Mohammad Khatami-Ardakani
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Update No: 034 - (30/09/04)
Iran takes nuclear diatribe one step further
During September the main development in Iran's nuclear saga was the
declaration of President Khatami that Iran would start enriching uranium,
disregarding whatever the international community might think about it. The IAEA
report issued in early September, that absolved Teheran from the accusation of
having started to enrich uranium for an atomic bomb, might well have encouraged
Teheran to take such a new step. Iran has the legal right to enrich uranium,
according to the Non-Proliferation Treaty, but the Americans in particular are
distrustful of the ability of the IAEA to effectively monitor how the enriched
uranium is going to be utilized. Already at the beginning of September the EU
had threatened that if Iran developed weapons-grade uranium its relations with
Europe would be at stake. As the end of the month approached, the Bush
administration claimed that a draft resolution on Iran's nuclear program had
been agreed with the Europeans, although this has not been confirmed by European
sources yet.
In Afghanistan Teheran's foreign policy faced a new situation in September, with
the removal of Iran's main ally in Western Afghanistan, the governor of Herat
Ismail Khan. Although Teheran gave its consent to the move, opting to improve
relations with the central government in Kabul, some factions within the regime
might not have been as happy. The Afghan government was keen to offer improved
relations between the two countries in exchange and on 26 August an agreement on
economic cooperation was signed. Iran will contribute to the training of Afghan
technicians and provide books and software, as well as building a road in
Western Afghanistan. In Iraq too Iran is facing rapid and constant changes in
the political situation. Although the Iranian government authorities probably
appreciate Al-Sistani's ability to influence US policies in Iraq, the hardliners
in Teheran seem keen to promote chaos in Iraq, as a way to legitimize their own
role and tie the Americans down for as long as possible.
Looking for candidates
Iran's internal politics is becoming more and more focused on next year's
presidential elections. The various political groups are looking around for
suitable candidates. The reformists seemed to be converging on the name of Mir
Hussein Mussavi, a former prime minister, but he does not look too keen. His
refusal might create a vacuum where the reformists, in order to avoid the
victory of a hard line conservative, might opt for supporting Hashemi-Rafsanjani
as the lesser evil. This is at least what Rafsanjani himself thinks, as he
started meeting reformist groups during September. Rafsanjani has long been
trying to position himself as the leading pragmatist and centrist in the Iranian
political landscape. Mainstream conservatives are instead beginning to converge
on the name of Ali Akbar Velayati, a former foreign minister who has high name
recognition among the population.
In the meanwhile, the hard line conservatives keep trying to push for a more
radical agenda. The judiciary, for example, has recently declared that it wants
to purge the Iranian film industry of "corrupt" artists.
Paradoxes of Iran's economy
One of the paradoxes of Iran's economic system is that high oil prices are
not necessarily always a blessing. The National Iranian Oil Company (NIOC) is
now going to ask parliament to authorize the expenditure of a further US$1.1
billion for importing gasoline. Because gasoline is sold at very low, subsidized
prices, consumption is very high and growing and domestic production cannot keep
the pace. Imports grew from 100,000 bpd to 160,000 bpd this year. NIOC is in
favour of abolishing the subsidy, but the parliament fears a political backlash.
There are plans to increase gasoline production at the Bandar Abbas refinery to
640,000 bpd from the current 232,000 bpd by 2007, but it appears likely that the
deadline will not be met and that imports will keep growing for a at least a few
more years.
Another example of self-inflicted economic pain is the carpet industry, which in
many regards is a success story, with exports constantly rising, but is
suffering from the involvement of a large number of organizations and
institutions which have little to contribute to its further development, such as
the Ministries of Cooperation and of Agriculture, the Imam Khomeini Relief
Committee, the Martyrs Foundation, the Handicrafts Organisation, etc. There is
also a lack of coordination among agencies such as the Ministry of Commerce, the
Carpet Joint Stock Co and Iran's Development Centre.
On the other hand, Iran's economic development continues to suffer from bad
relations with the US, which are stepping up their pressure to isolate the
country economically. The Japanese consortium which was awarded the right to
exploit the huge South Azadegan oil field is falling apart under such pressure.
One of the companies within the consortium, Tomen Corp., has already pulled out,
while another one, Japex, is considering to do the same. Inpex Corp., which
appears inclined to stay on, has tried to attract Royal Dutch/Shell into the
consortium, without success, and is now trying to convince a number of other oil
companies, such as Total, Statoil and others. Despite the attempt to make
buyback deals more attractive to foreign companies, most of these still do not
find this type of contract attractive enough. The attitude of NIOC, which
sometimes adds extra clauses to the contract, does not help either. For example,
in the case of the Ahwaz Bangestan oil field, NIOC is asking that the bidder
agrees to buy 5 million tonnes LNG from Iran's state company, which will surely
contribute to delay the reaching of a deal.
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ENERGY
Shell eyes new oil field development contracts in Iran
Royal Dutch/Shell Group, Europe's second largest oil company by market value,
has bid recently to develop new oil fields in Iran as its existing development
contract has expired, a Shell spokesman said. The Iranian National Oil Co, the
number two state-owned oil company in the Middle East, said that it was
reviewing bids by foreign companies to explore and develop 16 potential oil
fields. No more than 30 companies bought the tender documents for the
developments, Middle East Economic Digest reported.
Shell and China petroleum & Chemical Corp, known as Sinopec, "bid
together in the current exploration round in Iran where we see a number of
business opportunities in the longer term," Shell spokesman, Simon Buerk,
said in London.
He further added, "Sinopec is a fast-growing international player and
together we are pursuing a number of other opportunities." Shell is trying
to boost oil reserves and production, after revealing earlier this year it had
wrongly categorised more than a fifth of its holdings as proven reserves. The US
Federal Securities & Exchange Commission allows companies to book oil
supplies held under Iranian buy-back agreements even though Tehran forbids
foreign companies from owning reserves, which are considered a national
resource.
The development of the Soroush and Nowruz offshore oil fields, Shell's only
existing oil holdings in the Middle East's second-largest oil producing country,
are scheduled to reach total production capacity of 190,000 barrels a day by the
end of the year, Buerk said. Shell also owns a 25% share in the Pars Oil Co,
which produces and markets lubricants in Iran.
Sinopec, Asia's largest refiner, four years ago signed a strategic alliance
agreement with Shell for operations in China, which this year overtook Japan as
the world's second biggest importer of crude oil.
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FOREIGN ECONOMIC COOPERATION
Belarus, Iran sign cooperation documents
The Republic of Belarus and the Islamic Republic of Iran signed six
cooperation documents in the presence of the two countries' presidents, IRNA web
site reported.
Mutual cooperation between Iran and Belarus in customs, security, cultural,
agriculture and natural disasters are included in the documents.
Belarusian President, Alexander Lukashenko and his visiting Iranian counterpart,
Mohammad Khatam,i signed the statement for mutual relations' principles.
Ukrainian premier, Iraqi president discuss cooperation
Ukrainian Prime Minister, Viktor Yanukovych, has stressed during a meeting with
Iraqi President, Ghazi Yawar, that Ukraine will continue to develop bilateral
cooperation with Iraq in political, economic, military, technical and
humanitarian areas, UNIAN News Agency reported.
The press service of the Cabinet of Ministers quoted Yanukovych as saying that
the leadership of the Ukrainian state and the Ukrainian people closely follow
developments in Iraq. Yanukovych stressed that there are traditional historical
ties between Ukraine and Iraq.
Yanukovych expressed confidence that a necessary foundation is currently in
place to deepen cooperation between the two states at a qualitatively new level.
"We are confident that the Iraqi side will appreciate us as a reliable
partner and friend," Yanukovych said. Ukraine sees Iraq as a country with a
great future, he added.
Yanukovych believes that in the coming years Iraq will take a decent place not
only in the Middle East.
Iran wants to participate in Bosnia reconstruction -Rafsanjani
The head of the Expediency Council, Hojjatoleslam Hashemi Rafsanjani, has met
Kair Aldinsahic, the director of the Merhamet Charity Institute of
Bosnia-Herzegovina, Resalat web site reported.
He spoke about the principles of the Islamic Republic of Iran on supporting the
Muslim and oppressed nations of the world, and said: "The government and
the people of Iran are determined to actively participate in the post-war
reconstruction of Bosnia-Herzegovina."
Rafsanjani further said: "Of course, as we have witnessed, America resisted
Iran's humanitarian assistance by creating obstacles." Hashemi Rafsanjani,
announcing the readiness of the Iranian Government and the nation to support and
assist the people of Bosnia-Herzegovina said: "The Islamic Republic of
Iran, enjoying the successful experience of post-war reconstruction, is ready
wholeheartedly to share experience with the Muslims and seriously and actively
participate in the reconstruction of that country."
According to the report from the Expediency Council, the director of the
Merhamet Charity Institute of Bosnia-Herzegovina, who was in Iran at the
invitation of the Imam Khomeyni Relief Committee, explained the activities of
the Merhamet Institute and said: "On behalf of the government and the
nation of Bosnia-Herzegovina I want to thank the people and the government of
Iran for their sincere support for the people of my country during and after the
war." Mr. Aldinsahic, referring to the rich culture and civilization of
Iran said: "We intend to use the experience of Iran, especially that of the
Imam Khomeyni Relief Committee." The director of the Merhamet Charity
Institute thanked the Imam Khomeyni Relief Committee for its cooperation with
his institute.
Iran, Turkmenistan discuss ways to boost bilateral cooperation
Turkmen President, Saparmurat Niyazov, and Iranian Foreign Minister, Kamal
Kharazi, have discussed Turkmen-Iranian cooperation, New Europe reported.
Kharazi was accompanied by Iran's Caspian envoy, Mehdi Safari, and Iranian
Ambassador to Turkmenistan Gholamreza Ansari. Bilateral and international issues
were addressed during the talks, the Turkmen presidential press service
announced. The parties stated that annual trade between Turkmenistan and Iran is
likely to reach €1bn in the near future. Both Niyazov and Kharazi spoke about
a fast pace of cooperation, primarily in trade, the energy sector, transport,
the oil and gas complex, and the construction of motorways. The talks also deal
with the definition of the legal status of the Caspian Sea. Kharazi said,
"A large step has been made in this direction." The parties will
advance along this way "until the problem of the Caspian's Sea's legal
status is finally settled," he said.
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PETROCHEMICALS
Iran exports over 2.7m tons of petrochemicals
Iran exported over 2m 700 thousand tons of various petrochemical products,
valued at $814m, since the beginning of the current Iranian calendar year
(started March 20, 2004), IranMania.com reported.
The Persian-language daily 'Abrar-e Eqtesadi' quoted deputy head of Iran's
Petrochemistry Organization for foreign trade affairs, Yousef Mosafer, as saying
that 22% of Iran's petrochemicals were exported to Japan.
He added Iran also exported petrochemical products to India, China, South Korea
as well as Middle Eastern, European and African countries this year. The
official noted that the value of Iran's petrochemicals export would reach $1.8bn
by the end of the current year.
Mosafer said that chemical materials, aromatics, polymers, gas liquids and raw
materials for chemical fertilizers are all important products exported.
He pointed to the role of Iran's representatives outside the country in export
of petrochemical products, saying 30 representative offices have been so far set
up for marketing petrochemicals but the figure would be increased due to the
agreements reached in this regard.
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