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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: 053 - (28/04/06)
Military option more likely
Press leaks indicated in early April that preparations for a military
offensive against Iran are already going on and that the likely date is sometime
in 2007. Although US officials denied the content of the leaks, most
international analysts are upgrading the chance of a US military campaign
against Iran, despite signs of disunity within the anti-Iranian front. The UK
argues that Iran should be offered new incentives to renounce the uranium
enrichment program, including a direct US participation in the talks, and seems
to have received the endorsement of France and Germany. The Bush Administration,
on the other hand, appears to be divided between hardliners and extreme
hardliners, with the latter involved in an effort to even prevent any discussion
of the British proposal. Although the Iranian announcement in April, that it had
succeeded in mastering uranium enrichment technology and had developed advanced
centrifuges to speed up the process, the reaction of the Bush Administration was
unusually tame. The Americans were busy trying to convince Chinese President Hu
Jintao to soften their opposition to sanctions against Iran, but at the same
time the Russians were hardening their own position against the sanctions,
arguing that they would only be acceptable if it was possible to demonstrate
that Iran was indeed developing atomic weapons. In practice, there seems to be
little chance of Security Council-approved sanctions, ass we have consistently
pointed out here, so that the Bush Administration might have decided to go ahead
alone, while continuing to pay lip service to international mediation efforts.
The Iranians, on the other hand, seem convinced that they still have cards to
play. In April Supreme Leader Khamenei made explicit his endorsement of direct
talks with the US over Iraq, in part probably to counter-balance Ahmadinejad's
radicalism, but also to remind the Americans of the choice that the Iranian
leadership is presenting to them, i.e. that what Iran really wants is US
recognition and an end to the embargo. If that happened, Khamenei seems to
imply, the Ahmadinejad problem could be sorted out. After all, was not the
previous president Khatami marginalised by the establishment?
Strategies of (self-)isolation
US efforts at hurting Iran's economy continued unabated in April.
Contradicting earlier statements by President Bush himself, the Pakistani
government was asked by the US Ambassador to abandon the Iran-Pakistan-India
pipeline project and choose another option. In March the Bush Administration had
even asked the Japanese to at least temporarily halt work at the Azadegan oil
field, in order to put pressure on the Iranians concerning the nuclear dispute,
although Tokyo refused to bow. If the efforts of the Bush Administration to
isolate Iran economically had limited effects so far, the Ahmadinejad government
is giving a hand with its own nationalistic approach to foreign investment. In
April his government announced that in the future Iran will allow foreign
companies to participate in oil development projects only in oil fields jointly
owned by Iran and neighbouring countries. All other oil fields will be reserved
exclusively to domestic companies, although the latter may still use foreign
companies as subcontractors. At the same time it was announced that the long
criticised buy back contracts for investors in Iran's oil fields will be
replaced by a new type of contract called 'investment sharing', although the
Iranian authorities did not elaborate on the exact shape of these contracts,
which are under development. Only in the case of the South Pars project, where
the Iranians are falling behind the Qataris and fear being left with too small a
share of the oil, future bidding will still take place according to the old buy
back contracts.
Foggy economic plans
Hidden behind the excitement caused by international controversies, there is
some uncertainty with regard to the effective economic plans of the government.
For example, there is some confusion concerning fuel imports. The current budget
only allocated US$2.5 billion to this purpose, as opposed to the US$4.5 billion
spent last year, whereas consumption is expected to grow to 74 million litres
from last year's 67 million. According to the head of the Management and
Planning Organisation, it might be necessary to restrict the use of car fuel for
as many as 6 months during the current financial year, which of course would be
hugely controversial politically.
Despite the enforcement of a number of anti-inflationary measures in the current
budget, such as the reduction of hard-currency expenditures, experts now
forecast inflation to reach as high as 20% during this year, up from the current
17%.
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ENERGY
Gazprom interested in Iranian gas field
Russian state gas monopoly, OAO Gazprom, has expressed interest in participating
in the development of the world's largest offshore gas field in Iran, the Tehran
Times reported.
Gazprom chairman, Alexei Miller, met Iranian Ambassador, Gholamreza Ansari,
recently to discuss a possible role for the Russian gas behemoth in a planned
pipeline linking Iran, Pakistan and India and in the South Pars field, the
company said in a statement.
Iran sits on the world's second largest proven gas reserves after Russia. South
Pars, which is believed to be the world's largest gas field, is shared by Iran
and Qatar. It is estimated to hold 7 per cent of the world's total gas and 38
per cent of Iran's reserves.
Turkmenistan, Iran sign NG deal
Officials from Turkmenistan and Iran signed an agreement recently to increase
the price and the volume of supplies of Turkmen natural gas to its southern
neighbour, the Central Asian nation's Foreign Ministry said, the Tehran Times
reported.
Under the deal, which cemented agreements reached by the nations' presidents
last month, Iran will pay US$65 (euro54) per 1,000 cubic meters of gas as of
February 1st of this year, up from the previous price of US$42 (euro35), the
ministry said in a statement.
It also envisages that Iran will buy 14 billion cubic meters of gas in 2007, up
from 5.8 billion cubic meters in 2005 and a planned 8 billion cubic meters this
year.
Turkmenistan, the second-largest natural gas producer in the former Soviet
Union, after Russia, exports gas to Iran via a 200-kilometer (125-mile) pipeline
under a 25-year framework agreement.
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