Doc's Talk: Iran's Revolutionary Guards Strike Oil

Wednesday, January 18, 2012

Iran's Revolutionary Guards Strike Oil

Ali Alfoneh
Middle East Quarterly
Winter 2012, pp. 75-78 (view PDF)

http://www.meforum.org/3153/iran-revolutionary-guards-strike-oil

In July 2011, Iranian president Mahmoud Ahmadinejad appointed Maj. Gen. Rostam Qassemi of the Islamic Revolutionary Guards Corps (IRGC) as oil minister,[1] bringing the number of former IRGC officers in his cabinet to twelve out of eighteen. Yet the IRGC's seizure of the Oil Ministry could have far reaching economic, political, and strategic implications.

A powerful member of Iran's Islamic Revolutionary Guards Corps, Rostam Qassemi (left, with IRGC chief Mohammad Ali Jafari) inherited Iran's ailing Oil Ministry portfolio in July 2011.
In his decree, Ahmadinejad urged Qassemi to work for "the creatures of God" and the "material and spiritual progress" of Iran[2] but said little about the problems facing Iran's aging oil industry as a result of international sanctions, which have imposed crushing financial and technological restrictions on Tehran's ability to boost production in oil and gas fields, particularly those shared with neighboring countries. These problems are not only likely to affect Iran's economy but could increase tensions between Iran and its neighbors, which are free to extract ever greater amounts of oil and gas along their borders with the Islamic Republic. These problems are likely to grow worse under Qassemi, for whom the interests of the IRGC outweigh the interests of the Iranian state. Having won lucrative energy development contracts as a direct result of diminished foreign investment, the IRGC has little incentive to seek an escape from crippling economic sanctions by scaling back its nuclear ambitions.
Who Is Rostam Qassemi?

Qassemi was born in 1964 in Sargah village in Fars province and is believed to have a degree in civil engineering.[3] He joined the IRGC in Kharg Island in 1979 and was appointed logistics chief in Bushehr province two years later.[4] After Iran's war with Iraq (1980-88), Qassemi directed the engineering activities of the IRGC in Bushehr.[5] In 1996, he was appointed chief of the IRGC navy's Nouh base.

In 2007, Qassemi was appointed chief of Khatam al-Anbia (seal of the prophets), the IRGC's main engineering firm and one of the country's largest development contractors.[6] Khatam al-Anbia has built dams, highways, and pipelines for water, gas, and oil. Like other IRGC firms, it has reaped a windfall of no-bid contracts as foreign oil companies have withdrawn from Iran's oil and gas sector.[7] In May 2010, Khatam al-Anbia was awarded several phases of the South Pars gas field. According to Ahmad Qal'ebani, then National Iranian Oil Company (NIOC) director general, Khatam al-Anbia had signed $25 billion worth of contracts with the NIOC as of July 2011.[8] The firm's engineers are reportedly involved in the construction of intermediate-range missile launch pads in Venezuela.[9]

Khatam al-Anbia's growing penetration of the Iranian economy and alleged involvement in Tehran's nuclear program led to Qassemi being explicitly named in U.S.[10] and European Union[11] sanctions.
Man of the Revolutionary Guards

There is some indication that Ahmadinejad's preferred candidate for the job was acting oil minister Mohammed Ali-Abadi,[12] whom he appointed as caretaker in early June 2011. Having no prior experience in the energy sector, however, Ali-Abadi faced withering parliamentary criticism. Hamid-Reza Katouzian, parliamentary Energy Committee chairman, called Ali-Abadi "the worst imaginable candidate" for the Oil Ministry.[13] Ahmadinejad was forced to cast about for an alternative.

The IRGC lobbied hard for the candidacy of Qassemi. Neda-ye Enqelab, a media outlet close to the IRGC, disclosed that Qassemi conditioned his acceptance of the cabinet position on a "purge of the forces close to the current of deviation [individuals close to Esfandiar Rahim-Mashaei, Ahmadinejad's chief of staff and close confidante] from the oil industry."[14] This suggests that Qassemi was essentially imposed on the president.

Although Qassemi was overwhelmingly approved by parliament with a vote of 216 of the 246 deputies present,[15] he faced criticism from those who fear the IRGC's growing involvement in Iran's economy. At the parliamentary session debating his appointment, Ali Mottahari politely objected:

Opposition to the appointment of Rostam Qassemi as oil minister is not opposition to his person … I distinguish between his person and his legal position since his person is commendable… The main issue … is that the IRGC as a military force should not be connected with the political and economic power. In other words, the IRGC should not be [a part of the] cabinet … The IRGC is the symbol of the unity of society, just like the clergy. The Guards belong to all classes of society … Now, the IRGC is—rightly or wrongly—accused of seizing development projects in unequal competition with the private sector … the great oil infrastructure being added to it will not do away with such accusations.[16]

Such views were in the minority, however. In his defense, Qassemi said that Khatam al-Anbia has "filled the vacuum" left by the withdrawal of Western companies from Iran's oil and gas sectors as a result of the international sanctions regime.[17] Parliamentary speaker Ali Larijani, who is expected to run for president in 2013 and needs IRGC support for his candidacy, wholeheartedly defended Qassemi:

I arranged a meeting and invited representatives of the private sector. They all believed that the Khatam al-Anbia base is distributing work among them and that Mr. Qassemi, rather than competing with the private sector is supporting it.[18]

Larijani also said that Qassemi was appointed "as an individual of the Guards … It would be wrong to interpret this as the Guards trying to seize political power."[19]
Declining Production and Shared Fields

Though the sanctions have not dissuaded the Islamic Republic from accelerating the development of its nuclear program, they have created severe problems for its oil industry. An August 2011 report issued by the U.S. Government Accountability Office concluded that foreign firms have "significantly decreased commercial activity in Iran's oil, gas, and petrochemical sectors."[20]

Qassemi is well aware of the dire state of the Iranian oil industry. He has made it clear that boosting production in the twenty-eight oil and gas fields Iran shares with its neighbors[21] is his highest priority.[22] According to one report, 50 percent of Iran's gas reserves are to be found in these shared fields.[23]

Unencumbered by sanctions, Tehran's neighbors extract oil and gas from shared fields at a far greater pace. While Iran extracts 210 million cubic meters per day from the South Pars gas field (the largest in the world) it shares with Qatar, the emirate extracts 360 million cubic meters of gas from it.[24]

Iran's production from shared oil fields experiences similar problems. Iraq extracts 295,000 barrels per day (b/d) from the twelve fields it shares with Iran while Iranian production from the same fields is 130,000 b/d.[25] In the four oil fields it shares with Saudi Arabia, Tehran produces 42,000 b/d while Saudi production is ten times that. The United Arab Emirates extracts 136,000 b/d from fields shared with Iran while Iran extracts 56,000 b/d.[26]

At his inauguration ceremony, Qassemi called the development of shared fields his "top priority."[27] According to an unnamed Oil Ministry official, substantially boosting oil and gas production sharing from these fields will require $67 billion in investment.[28] Qassemi maintains that only $50 billion is needed,[29] but the Iranian state can afford neither amount. Qassemi is likely to find it difficult, if not impossible, to attract foreign direct investment in Iran's oil and gas sector or persuade foreign companies to bring in much-needed technology. He has warned Chinese companies against further delays and suspensions of contracts signed with Iran, threatening to replace them with IRGC construction firms.[30] However, such attempts at attracting investments and technology have yet to produce results. The Oil Ministry's efforts at releasing "participation bonds" to attract domestic investment in Iran's oil and gas fields is more a symbolic act than a serious attempt at raising capital.[31]
Conclusion

The IRGC, whose aggressive pursuit of nuclear weapons provokes foreign sanctions against the Islamic Republic, also benefits from the sanctions, which eliminate foreign competition. Khatam al-Anbia and other IRGC firms may prove incapable of living up to their contractual obligations, but in the meantime, the IRGC has achieved its main goal: access to Iran's foreign exchange reserve. Once that tap is turned on, it is difficult for opponents of the IRGC to turn it off.

As Iranians watch their neighbors reap profits from shared oil and gas fields, disputes over resources and territorial boundaries can quickly escalate as was the case in 1999 when Iranian troops entered Iraqi territory following a disagreement over the shared al-Fakkah oil field.[32] Should tensions rise concerning Iran's shared oil and gas fields, the IRGC may play the nationalist card and mobilize the Iranian public against "Arabs" who "take Iran's oil."[33]

The Islamic Republic has yet to learn that avoiding international sanctions and diplomatic isolation provides a more suitable pathway to becoming a responsible regional power than recklessly flexing military muscle. Time is running out for civilian leaders who seek to buy the IRGC's political support by showering it with black gold. If anything, Qassemi's appointment may indicate that it is too late for the civilian leadership to free itself from the IRGC's claws.

Ali Alfoneh is a resident fellow at the American Enterprise Institute.

[1] "Hokm-e Reis-Jomhour Bara-ye Rostam-e Qassemi Be Onvan-e Vazir-e Naft," Paygah-e Ettela'e-Resani-ye Dowlat (Tehran), Aug. 9, 2011.
[2] Ibid.
[3] Mashregh News (Tehran), July 27, 2011.
[4] Daneshjou News (Tehran), July 29, 2011.
[5] Ibid.
[6] Ibid.
[7] Abrar (Tehran), Mar. 16, Apr. 19, 2010; Poul (Tehran), June 5, 2010.
[8] BBC Persian (London), July 31, 2011.
[9] The Jerusalem Post, May 17, 2011.
[10] "Alphabetical Listing of Specially Designated Nationals and Blocked Persons," United States Department of the Treasury, Washington, D.C., accessed Sept. 18, 2011.
[11] RTT News (Williamsville, N.Y.), Aug. 3, 2011.
[12] Asr-e Iran (Tehran), June 2, 2011.
[13] Fararu (Tehran), June 3, 2011.
[14] Neda-ye Enqelab (Tehran), July 27, 2011.
[15] Naft News (Tehran), Aug. 3, 2011.
[16] Asr-e Iran, Aug. 3, 2011.
[17] Mehr News Agency (Tehran), Aug. 3, 2011.
[18] Asr-e Iran, Aug. 3, 2011.
[19] Ibid.
[20] "Firms Reported in Open Sources as Having Commercial Activity in Iran's Oil, Gas, and Petrochemical Sectors," U.S. Government Accountability Office, Washington, D.C., Aug. 3, 2011.
[21] Mehr News Agency, July 18, 2011.
[22] Asr-e Iran, July 13, 2011.
[23] Ibid.
[24] Ibid.
[25] Ibid.
[26] Ibid.
[27] SHANA (Tehran), Aug. 9, 2011.
[28] Mehr News Agency, July 18, 2011.
[29] Islamic Republic News Agency (IRNA, Tehran), Aug. 25, 2011.
[30] Diplomasi-ye Irani (Tehran), Aug. 14, 2011.
[31] Kayhan (Tehran), Aug. 23, 2011.
[32] The Wall Street Journal, Dec. 19, 2009.
[33] Mehr News Agency, July 18, 2011.

No comments:

The IDF’s Minorities in Numbers and Pictures

In honor of IDF Diversity Week, we present diversity through numbers and pictures. Each year, more and more Muslims, Christians, Druze, Bedouin and immigrants from around the world take on the responsibility of defending Israel.

MUSLIMS:

Muslim Arab Israelis are not required to draft in the IDF, but there are many who volunteer. In 2013, there were over 200 Muslims serving in the IDF and over 300 in the reserves.

Bedouins:

Bedouins are nomadic Muslims who were in Israel when modern borders were set in place and are now considered Israeli citizens. They are not required to draft but a growing number choose to enlist. In 2012, there were over 1,400 Bedouin Muslim soldiers doing regular IDF service and almost 1,500 in the reserves.

Read more:http://www.idfblog.com/2014/02/27/truth-idf-numbers-pictures/#more-34027

Are you aware that in 2013, Middle class taxes go up-significantly?

In January of next year, the federal income tax rate for middle-class taxpayers is scheduled to rise from 25 percent to 28 percent, and the payroll tax is scheduled to rise from 13.3 percent to 15.3 percent… This drives the marginal tax rate based on the aforementioned three taxes to 48.12 percent. Add in state and local property, corporate, excise, and other state and local taxes, and the percentage of each additional dollar that is taxed hovers around 50 percent… When half of each additional dollar earned is taxed away, taxpayers experience a disincentive to start businesses or expand existing ones. This leads to fewer jobs being created.

Why is HAMAS Inside Tampa Schools?

Clare Lopez

Kelly Miliziano, who teaches history classes at Steinbrenner High School in the Tampa, Florida area apparently thinks it’s perfectly OK to invite a senior official of a HAMAS-affiliated organization into her classroom to discuss Islam with her students. According to local media reports, not only has this been going on for years, but in spite of the civil and criminal proceedings that could result from such reckless negligence, the Hillsborough County school superintendent, Mary Ellen Elia, and the chairman of the school board, Candy Olson, also expressed approval for students under their responsibility to be exposed repeatedly to guest speaker, Hassan Shibly, who is the Executive Director for the Council on American-Islamic Relations (CAIR) in the Tampa area.
More...

Did You Know... Ignoring the Call to Islam will Bring Jihad

‘Conquest through Da’wa [proselytizing] that is what we hope for. We will conquer Europe, we will conquer America! Not through sword but through Da’wa.’
-- Yousef al-Qaradawi , Muslim Brotherhood spiritual leader The Arabic word ‘Da’wa’ means the “call to Islam.” But do not think that Da’wa is the same thing as an invitation to an optional holiday event. The classical Islamic doctrine of jihad mandates that enemies must be given the opportunity to convert to Islam or pay the jizya tax before it is permissible to attack them.
Clare M. Lopez

Who is being discriminated-facts tell the truth

Religious bias

Hate crimes motivated by religious bias accounted for 1,409 offenses reported by law enforcement. A breakdown of the bias motivation of religious-bias offenses showed:

65.4 percent were anti-Jewish.
13.2 percent were anti-Islamic.
9.5 percent were anti-other religion, i.e., those not specified.
4.3 percent were anti-Catholic.
3.8 percent were anti-multiple religions, group.
3.3 percent were anti-Protestant.
0.5 percent were anti-Atheism/Agnosticism/etc.

http://www.fbi.gov/about-us/cjis/ucr/hate-crime/2010/narratives/hate-crime-2010-incidents-and-offenses.

On March 31, 1977, the Dutch newspaper Trouw published an interview

with PLO executive committee member Zahir Muhsein. Here's what he said:

"The Palestinian people does not exist. The creation of a Palestinian state is only a means for continuing our struggle against the state of Israel for our Arab unity. In reality today there is no difference between Jordanians, Palestinians, Syrians and Lebanese. Only for political and tactical reasons do we speak today about the existence of a Palestinian people, since Arab national interests demand that we posit the existence of a distinct "Palestinian people" to oppose Zionism.

For tactical reasons, Jordan, which is a sovereign state with defined borders, cannot raise claims to Haifa and Jaffa, while as a Palestinian, I can undoubtedly demand Haifa, Jaffa, Beer-Sheva and Jerusalem. However, the moment we reclaim our right to all of Palestine, we will not wait even a minute to unite Palestine and Jordan."

In March 1977, Zahir Muhsein, a PLO executive, said:

"The Palestinian people does not exist. The creation of a Palestinian state is only a means for continuing our struggle against the state of Israel for our Arab unity. In reality today there is no difference between Jordanians, Palestinians, Syrians and Lebanese. Only for political and tactical reasons do we speak today about the existence of a Palestinian people, since Arab national interests demand that we posit the existence of a distinct Palestinian people to oppose Zionism."

"For tactical reasons, Jordan, which is a sovereign state with defined borders, cannot raise claims to Haifa and Jaffa, while as a Palestinian, I can undoubtedly demand Haifa, Jaffa, Beer-Sheva and Jerusalem. However, the moment we reclaim our right to all of Palestine, we will not wait even a minute to unite Palestine and Jordan."

The Arab Apartheid

Ben-Dror Yemini
In 1948, the Arab countries refused to accept the UN partition proposal and they launched a war of annihilation against the State of Israel which had barely been established. All precedents in this matter showed that the party that starts the war - and with a declaration of annihilation, yet - pays a price for it. Between 550,000 and 710,000 Arabs fled because of the war and a larger number of 850,000 Jews were expelled or fled from Arab countries (the "Jewish nakba").
Population exchanges and expulsions were the norm at that time, occurring in dozens of other conflict points and affecting about 52 million people. In all the population exchange precedents that occurred during or at the end of an armed conflict, there was no return of refugees to the previous region, which had turned into a new national state.
Only the Arab states acted completely differently from the rest of the world. Instead of assimilating the refugees, they crushed them despite the fact that they were their coreligionists and members of the Arab nation - instituting a regime of apartheid. So the "nakba" was not caused by the actual dispossession, which had also been experienced by tens of millions of others. The "nakba" is the story of the apartheid, oppression, abuse and denial of rights suffered by the Arab refugees at the hands of the Arab countries. (Maariv)

International Law and Military Operations in Practice - Col. Richard Kemp

"Islamist fighting groups study the international laws of armed conflict carefully and they understand it well. They know that a British or Israeli commander and his men are bound by international law and the rules of engagement that flow from it. They then do their utmost to exploit what they view as one of their enemy's main weaknesses. Their very modus operandi is built on the correct assumption that Western armies will normally abide by the rules, while these insurgents employ a deliberate policy of operating consistently outside international law. "

Lost Historical Moments

What Rabin’s last Knesset speech really said:repudiation of a Palestinian state

Rabin ruled out a fully sovereign Palestinian state :

“We view the permanent solution in the framework of State of Israel which will include most of the area of the Land of Israel as it was under the rule of the British Mandate, and alongside it a Palestinian entity which will be a home to most of the Palestinian residents living in the Gaza Strip and the West Bank. We would like this to be an entity which is less than a state, and which will independently run the lives of the Palestinians under its authority.”

Rabin ruled out a total withdrawal from Judea and Samaria and thus a return to the pre-June 1967 borders :

“The borders of the State of Israel, during the permanent solution, will be beyond the lines which existed before the Six Day War. We will not return to the 4 June 1967 lines.”

Rabin ruled out withdrawing form the Jordan Valley:

“The security border of the State of Israel will be located in the Jordan Valley, in the broadest meaning of that term.”

Rabin ruled out uprooting settlement blocs, like the Gush Katif bloc in Gaza (which was subsequently uprooted by former Prime Minister Ariel Sharon):

“The establishment of blocs of settlements in Judea and Samaria, like the one in Gush Katif.

AND

Rabin ruled out removing any settlement before coming to a full peace agreement with the Palestinians:

“I want to remind you: we committed ourselves, that is, we came to an agreement, and committed ourselves before the Knesset, not to uproot a single settlement in the framework of the interim agreement, and not to hinder building for natural growth.”

Rabin insisted on Israel retaining full security control of the borders with Egypt and Jordan, contrary to Israel’s relinquishment of the Philadelphia Corridor on the border with Egypt:

“The responsibility for external security along the borders with Egypt and Jordan, as well as control over the airspace above all of the territories and Gaza Strip maritime zone, remains in our hands.”

Correcting Oslo Myths-Part 2

3) Kuttab laments that the post-1993 Oslo process resulted in a Palestinian Authority "whose ministers and legislators are not guaranteed passage between Gaza and the West Bank ...."

Before free passage or other perquisites, PA leaders were obligated, among other things, to eliminate the terrorist infrastructure in the West Bank and Gaza Strip, end anti-Israeli, antisemitic incitement in schools, mosques, and communications media, and resolve all outstanding issues through peaceful negotiations. They met none of these commitments, sometimes bolstering terrorism and greatly increasing incitement.

4) Kuttab complains that under Oslo the PA got "lightly armed police ---- but no real sovereignty over the land or contiguity between our communities in Gaza and the West Bank."

Oslo agreements repeatedly were revised, regardless of Palestinian non-compliance, until the authorized number of police grew from 8,000 to 40,000. Though they were to be the only armed forces in the territories, Israeli estimates early in the second intifada put the number of gunmen - police, "security services," terrorists, and armed gangs - at 85,000. Their armament reportedly included not only heavy machine guns and rocket-propelled grenades, but also anti-tank and anti-aircraft missiles.

Sovereignty was to be negotiated in the envisioned 1998 "final status" talks - after a five-year period of confidence-building. Palestinian leadership chronically undermined the process. Palestinian terrorism made the 1993 - 1998 Oslo period more deadly for Israelis than the 15 years preceding it.

The United States doesn't have contiguity between the lower 48 states and Alaska and Hawaii; territorial contiguity between the West Bank and Gaza Strip - that is, through the 20 miles of Israeli territory between them - was never promised and would destroy Israeli contiguity.

5) "Palestinians have been made to endure hundreds of checkpoints in the West Bank, an eight-foot wall deep in our territories, and tight Israeli control over borders."

The security barrier is not "deep in Palestinian territories," but rather encompasses less than 8 percent of Judea and Samaria, and is mostly a fence, rarely a wall; the land in question is not "our [Palestinian] territories" but disputed territory to which, according to the authors of U.N. Security Council Resolution 242, Jews as well as Arabs have claims; and there are no international borders, only the 1949 armistice lines with Jordan. Under 242, borders remain to be negotiated. As for checkpoints - like the security barrier and "tight Israeli control" - Palestinian Arabs precipitated these measures themselves. No terrorism and there would be no fence or tight Israeli control and few checkpoints - like before the first intifada.

Correcting Some Oslo Myths

1) In Oslo "Israeli, Palestinian and other world leaders promised that ... Palestinian sovereignty would be solidified."

No, they didn't. The 1993 Declaration of Principles and subsequent Oslo agreements outlined a process by which final status negotiations about the West Bank and Gaza Strip would be reached. The process required an end to anti-Israel terrorism and incitement and a commitment to peaceful negotiations. The PA, Fatah, Hamas, Islamic Jihad, the Popular Front for the Liberation of Palestine, and other terrorist groups, sabotaged the process from the start.

2) "The reality is that, in defiance of U.N. Security Council Resolution 242, which states that it is inadmissible to occupy land by force, Palestinian territories are still under foreign military occupation."
Wrong again. Resolution 242 (1967) does note "the inadmissibility of the acquisition of territory by war." It also affirms the right of every state in the area "to live in peace with secure and recognized boundaries free from threats or acts of force." There were no "Palestinian territories." Jordan occupied the West Bank, Egypt controlled Gaza. Israel did not have "secure and recognized boundaries," so retention of some of those territories was possible under 242. Israel is not a "foreign" military occupier in the West Bank but, pending final negotiations, the lawful military administrator as a result of a successful war of self-defense.

Doc's Talk