IRAN, like Mexico, has a new and more reform-minded president who wants to loosen the national oil company’s grip on his country’s massive reserves, and bring in private investment to boost output. One big difference is that Iran’s ability to do so is severely curtailed by international sanctions on the country over its nuclear programme. Nevertheless, the president, Hassan Rohani, has brought back a former oil minister, Bijan Zanganeh, who in his previous stint, in 1997-2005, ushered in what some Iranians remember as a golden age of oil investment.Back then, Mr Zanganeh signed deals with many foreign oil majors, bringing billions of petrodollars to Iran. He decentralised the powerful National Iranian Oil Company (NIOC) and filled his ministry with technocrats. Some of these were blemished with financial scandal. On taking office, Mr Rohani’s populist predecessor in the presidency, Mahmoud Ahmadinejad, denounced them as the “oil mafia” and chucked them out. Now Mr Zanganeh has hired some of them back.The minister is aiming to raise Iran’s crude-oil production to its 2005 level of around 4.2m barrels a day, a 60% boost on current output. He is promising to speed up work on the country’s South Pars offshore gas development, which has suffered big technical and financial problems as sanctions have scared away foreign investors. But his proposal to foster a competitive private…
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The Economist: Business
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