Iran's Regime Plans To 'De-Nationalize' The Oil Industry
The Iranian regime is planning to hand over the oil industry to the “private sector,” which will effectively place the national wealth in the hands of insiders.
The Iranian regime is planning to hand over the oil industry to the “private sector,” which will effectively place the national wealth in the hands of insiders.
In 1951, the Iranian parliament seized control of the country’s oil industry which had been run by private companies, largely controlled by the British. The movement that led to the legislation was led by Mohammad Mosaddegh, a populist lawmaker who became Iran’s prime minister a year later. The legislation led to the nationalization of the Anglo-Iranian Oil Company, a British firm founded in 1909 following the discovery of a large oil field in Khuzestan province and the first to extract petroleum in Iran.
According to an article in reformist daily HamMihan on Tuesday titled “Transitioning Beyond Oil Nationalization” the government, in its Seventh Development Plan, seeks to hand over the rights for exploration, development, extraction, production, and exports of oil and gas to the private sector. It practically means that the government no longer regards oil and gas reserves as the assets of the nation but views it as its own property, and has decided to transfer the rights to the National Development Fund (NDF) that later can sell rights or ownership to domestic entities.
More than 80 percent of Iran's economy is controlled by the clerical regime, including the Revolutionary Guard, leaving little room for real businessmen or private companies to flourish.
The administration of President Ebrahim Raisi submitted the country’s Seventh Development Plan to the parliament last month. After lawmakers refused to approve Raisi’s initial plan apparently for being too general and vague, the administration practically extended its expired development plan for the third time since 2021 with a few amendments and called it a new plan. The old document, the 6th Development Plan, was to be implemented between 2016 and 2021, but many parts of it have remained untouched as the government lacked the appropriate resources due to a catalogue of foreign policy and economic problems. If approved by the parliament, two provisions of the new plan authorize the government to facilitate the delegation of contracts in the oil industry.
According to the amendments, it is stipulated that "the government is allowed to sign contracts (with third parties) on exploration, development, extraction, production, sale, and export at oil and gas fields via the Oil Ministry to settle its debts to the NFD, without transferring their sovereignty.”
Warning of the consequences of such a move, HamMihan said the main concerns are not limited to the act of transferring the national rights to the private sector, but the fact that the country’s oil and gas industry will end up at the hands of quasi-state organizations and institutions controlled by regime insiders. Based on the experience from similar measures, the entities that truly represent the private sector lack the capability and resources needed to handle such big projects, the daily said. It argues that semi-governmental or semi-public firms (called Khosoulati in Persian) will be the ones that would eventually take control over the fields. Khosulati is portmanteau word made from fusing two Persian adjectives for “private” and “governmental” and refers to companies that are sold to the private sector on the surface, but are owned by the government, IRGC-linked entities, regime’s bigwigs or entities under the control of the Supreme Leader.
The sanctions imposed on Tehran and the country’s murky regulations and shady oil exports make it extremely difficult – if not impossible – to attract foreign investors, who would fear US reprisal and punitive measures in case of entering the country’s oil and gas market.
Pundit Mohammad Mashinchian told Iran International that Iran’s oil and gas industry is in dire need of infrastructural investment and the NDF was meant to achieve that but failed like many other good ideas in the Islamic Republic. He described the latest decision as a “coup de grâce to the initial idea” of the fund. Highlighting Iran’s corrupted oil economy, he said the sanctions serve as a pretext to giving control of the country’s exports to the authorities’ close circles. “This is laundering Iran’s national wealth into the hands of the regime’s circles of power,” he noted.
Interior minister Ahmad Vahidi had reported this lower figure on September 27, stating that there were "around five million Afghans in Iran." However, Mohsen Najafikhah provided a substantially higher estimate of 8.4 million immigrants.
Afghans, often referred to simply as ‘foreign nationals’ by officials and the media, make up the majority of immigrants in Iran. The census of 2016 found the presence of over 1.5 million Afghans followed by 34,500 Iraqis and 14,320 Pakistanis.
“The question is whether the number of foreign nationals in the country has increased since [September] or the statistics offered by the interior minister was not right,” Faraz Daily news website asked Monday.
Afghans first came to Iran as refugees in early 1980s and later as economic migrants but before the Taliban takeover of the government in Afghanistan in 2021 their numbers rarely rose above two million. Around 780,000 had obtained refugee status and were not considered illegals.
In April 2022, Javad Hedayati, the director general of the International Transit Bureau of the Transportation Organization, reported a significant increase in the number of Afghans entering Iran through official borders since the Taliban takeover. He stated that the number had risen to as many as 5,000, compared to the previous range of 700-800. Notably, there were no available statistics on the number of illegal immigrants.
The government has not taken any steps to slow down the deluge of refugees, leading to accusations that the clerical regime might have sinister plans to use the Afghans, who speak Persian, for political or military aims.
In late September, a member of the parliament’s National Security and Foreign Policy Committee, Mahmoud Ahmadi-Bighash, disclosed plans to grant Iranian citizenship to legal Afghan immigrants. Ahmadi-Bighash claimed they number between eight to ten million.
According to Ahmadi-Bighash, a former governor of the northeastern North Khorasan Province, the primary aim of the plan is “population transfer” and legalizing the presence of millions of Afghan immigrants.
Referring to the parliament’s approval of a bill to establish a “national immigration organization” in November 2022, he claimed that those behind the plan want to “facilitate the entry and residence” of Afghan citizens.
In recent weeks, the government’s political rivals have repeatedly warned about its “open borders” policy and the possibility of hidden agenda with hardliners responding to such criticism by accusing critics of inciting “Afghan-phobia” amid fast-growing anti-Afghan sentiments on social media and violence against the immigrants.
Some government critics claim authorities are actively encouraging the growth of the Afghan population with incentives such as subsidized energy and food to remedy the problem of population decline or even to bolster its military by recruiting young Shiite Hazara Afghans.
During the Sunday session, lawmakers assigned the interior ministry the task of establishing a national immigration organization in collaboration with the Secretariat of the Supreme National Security Council.
The government claims that by forming such an organization it will be able to “systematize” the data on foreign nationals’ entry, exit and expulsion for which, according to Najafikhah, ten different government departments are currently responsible.
Government’s critics allege that the plan may be a cover for naturalizing Afghans in Iran. “A national immigration organization, if formed, can easily turn into an organization for issuing residence permits,” Faraz Daily’s report said.
The report pointed out that the government bill includes provisions for offering a series of services – including access to national insurance and benefits – to foreign nationals without citation of allocated budget.
“It is not clear whether the country’s economy is capable of offering these services to so many immigrants, just the same as it is still not clear how many of the 8.4 million are legal immigrants and how many are illegal (undocumented),” the report said.
Speaking at a gathering in Tehran, the anti-Israel and anti-West leader of the Islamic Republic, also accused the United States of being a partner in what he called Israeli crimes.
With his usual rhetoric, Khamenei said, “The wounded and wrecked occupier regime seeks revenge for the blows dealt by the resilient Palestinian fighters in Gaza, but undoubtedly, despite all the support of the wicked oppressors and the explicit collusion of the Americans in the crimes of the Zionists, all this injustice and aggression ultimately leads to nowhere, and in these matters and future events, victory belongs to the Palestinian nation."
The Iranian regime immediately congratulated Hamas on October 7, as the news of the terror raid and the mass killing of civilians was being received. Later, the government organized street celebrations and began issuing statements of support for Hamas and threats against Israel and the United States.
Khamenei on Wednesday described the attack on Israel as “defining and unprecedented.” He stated that with the passage of time, “the irreparability of this operation becomes more evident." He praised the “perseverance of the people of Gaza” and said that this will eventually “defeat the enemy.”
He claimed that leaders of “usurper and oppressor” governments are visiting Israel to save it from complete annihilation. "The evildoers around the world see that the Zionist regime is in a state of struggle and destruction due to the powerful and defining blow delivered by Palestinian fighters. For this reason, they are trying to forcibly keep the wounded and wreaked regime afloat through these visits, expressions of solidarity, and the provision of tools of crime such as bombs and other weaponry."
The 83-year-old Iranian dictator accused the United States of being a “partner in crime” with Israel. "The hands of the Americans are tainted with the blood of children, women, and other martyrs of Gaza, and in reality, the Americans are managing these crimes."
The Biden administration has warned Iran and Hezbollah not to get involved in the fighting and not to expand the war, although the militant Lebanese organization has already attacked some targets in Israel. The administration has deployed two powerful naval task forces in the eastern Mediterranean, which could be a deterrence against a potential barrage of missiles by Hezbollah.
Khamenei also called on Arab and Muslim governments to not lose their will in the face of “Western propaganda” and refrain from calling Palestinians terrorists.
Israel on Wednesday accused Iran of orchestrating recent attacks carried out by its proxies in Yemen, Iraq, and Lebanon in addition to supporting Hamas' war on Israel.
Israeli Chief Military Spokesperson Rear Admiral Daniel Hagari said: “Iran supported Hamas before the war directly, in training, in providing weapons, money and technological know-how. Even in these moments, Iranian support to Hamas continues with intelligence assistance alongside incitement on social media and fueling incitement worldwide against the State of Israel," he said.
Clearly naming Iran as the culprit of regional destabilization, he added; "In the Middle East where the Iranian proxies operate from within Iraq, Yemen and Lebanon, the instructions come from only one place — from Iran."