Politics in the Next (Latest?) Nuclear Power

There appears to be unrest in the Iranian oil ministry (which, of course, begs the question, why is there an oil ministry in the first place?):

IRAN'S POLITICS
The Economist
Nov 23rd 2005

For a third time, Iran's parliament has rejected the nominee for oil minister put forward by Mahmoud Ahmadinejad. This marks a serious setback for the new president's plans to shake up the Islamic Republic. It may also end up hurting the economy of the world's fourth-largest oil producer.

HE PLEDGES to lay low those "aristocrats" who sit on a dozen managing boards, default with impunity on loans from public banks and drive armour-plated cars worth $300,000. But the fight picked by Iran's fiery president, Mahmoud Ahmadinejad, will be hard to win--not least because, in Iran's semi-socialist economy, the line between entrepreneur and civil servant is all but invisible and the rot so pervasive. He has already made an enemy of the architect of many of these ambiguities, Akbar Hashemi Rafsanjani, who selectively liberalised the economy when he was president in the 1990s.

Early this month, Mr Ahmadinejad sacked the bosses of four of the big public banks that have extended, so he says, 60% of their loan facilities to a privileged 4% of Iranians. He claims to have a "long list" of people who have "dipped into the public purse" but declines Mr Rafsanjani's invitation to reveal it. Most worrying for the president, three months into his tenure, he does not have a grip on the oil
ministry, the linchpin of the system he detests.

Here, Mr Rafsanjani, a grandee who retains much influence over the ministry, has been helped by parliament, which also gets on badly with the new president. This autumn, deputies withheld votes of confidence in two of Mr Ahmadinejad's successive nominees to be oil minister; this week they rejected Mohsen Tasalloti, his third choice.

For some lawmakers, the problem lies with the government's plans for the oil sector. This week, one top oil official criticised plans to spend $3 billion of oil revenues to buy petrol, of which Iran consumes far more than it produces, and its refusal to stop subsidising prices at the pump. Another questioned the existence of what the president calls the "oil mafia".

For others in parliament, however, the real issue is Mr Ahmadinejad's choice of candidates. Lawmakers have questioned Mr Tasalloti's loyalty to the Islamic Republic. He has denied claims that he holds an American "green card" residency permit and that his daughter has secured British citizenship.

Three rejections in a row represent a huge embarrassment for Mr Ahmadinejad, and threaten to cast Iran into uncharted political waters. Parliament is dominated by conservatives, many of whom were happy to see Mr Ahmadinejad trounce Mr Rafsanjani in the second round of the presidential election, in June. But the spats since he took office have shown that only a minority can be relied on to support the president.

Moreover, the timing of the oil saga is awkward: Mr Ahmadinejad is also at odds with America, Europe and the International Atomic Energy Agency over Iran's uranium-enrichment activities (though threats to have the matter referred to the UN Security Council have so far proved empty).

A prolonged dispute over the oil ministry could have economic implications as well as political ones. Iran is the world's fourth-largest producer of crude oil and the second-largest exporter in the Organisation of the Petroleum Exporting Countries (OPEC). Some 80% of the country's export earnings come from oil and gas.

In a hydrocarbon-reliant country that Transparency International, a Berlin-based anti-corruption lobby, considers to have a "serious corruption problem", it would be a surprise if Iran's oil industry were squeaky clean; in 2003, some top people in Norway's Statoil resigned after it emerged that the company had paid bribes to win the right to develop an Iranian oil field. Still, for all the rumours of rigged tenders, there have been, tellingly, no high-profile court cases in Iran. The industry is enfeebled by American sanctions and politicians' antipathy to foreign investors. Scandal is the last thing it needs.

According to a recent report by the International Energy Agency, Iran's oil industry must attract some $80 billion in investment over the next 25 years if it is to meet soaring domestic energy demand and remain a major exporter. Its fledgling gas export industry needs a similar injection; though Iran has the world's second-biggest reserves, it is a net importer. But foreign deals need strong leadership. Some putative ones, such as India's plan to buy liquefied gas and develop an oil field, are mired in politics and small print.

Mr Ahmadinejad says he wants to bring Iran's oil lucre to the "dining table of the people". Not if he can't find a new oil minister.