Iran Parliament Approves Revolutionary Guard As Oil Minister

LONDON (Dow Jones Newswires), Aug. 3, 2011

Iran's lawmakers Wednesday approved a sanctioned senior official from the powerful Islamic Revolutionary Guard Corps as oil minister, as hardliners scored a major victory in tightening control over the country's most strategically important sector.

Brig. Gen. Rostam Ghasemi, who had been proposed by president Mahmoud Ahmadinejad, was approved by 216 votes from a total of 246, according to Iran's Parliament website.

Ghasemi, who heads Khatam al-Anbiya, the most powerful economic wing of the Revolutionary Guards, will be the first commander from the elite paramilitary force to move into a ministerial post not related to defense.

The appointment is a strategic gain for the Guards, who are responsible for safeguarding Iran's Islamic revolution and defending its borders, and who are now likely to increase their reach in the economy.

Ghasemi's arrival at the ministry is also likely to complicate internal relations within the Organization of the Petroleum Exporting Countries, over which the Islamic Republic presides under a rotating system.

A key OPEC meeting split acrimoniously in June after Iran successfully thwarted a Saudi push to hike oil output.

Ghasemi is subject to sanctions by the U.S. and European Union for his role in helping Iran's nuclear program.

After Ahmadinejad took office in 2005, the Revolutionary Guards won multiple contracts in the oil and gas sector, signaling the group's rising political and economic influence. That has grown, notably in the oil and gas industry, as sanctions force international companies to pull out of Iran.

According to Ahmad Ghalebani, head of the state-owned National Iranian Oil Co., Khatam al-Anbiya has won an estimated $25 billion of contracts. And in remarks to parliament ahead of the vote, Ghasemi pointed out that the contractor had won deals in projects where Total of France and Anglo-Dutch oil giant Shell refused to enter.

Ghasemi's "more pressing challenge is to try to revise the oil production that has been slipping" due to bureaucracy and sanctions, said Mehdi Varzi, president of U.K. oil consultancy Varzi Energy.

According to the International Energy Agency, a reference on energy statistics, Iran's available oil production capacity fell by 246,000 barrels a day over the 12 months to June.

But the fact Ghasemi is "much closer politically to the current political leaders of Iran" may actually help him in solving the oil sector's problems, said Varzi, who is himself a former Iranian oil official.

In recent months, Ahmadinejad has been at loggerheads with the parliament and with supreme leader Ali Khamenei over political influence.

Yet, while he was proposed by the president, Ghasemi easily won the approval of lawmakers that have previously rejected presidential nominations and has publicly pledged allegiance to the supreme leader.

The parliament also approved three other ministers nominated by Ahmadinejad for sport and youth; industry, mines and trade; and cooperatives, labor and social security.

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