Iran: Mirkazemi before Majles

On 21st December, Iran's Petroleum Minister Masoud Mirkazemi was called to Majles to discuss his performance. Majles deputies were concerned with lack of progress on compressed natural gas projects, South Pars developments, petrochemical feed, the negative gas trade balance, gas production, gas exploration, and gas distribution to villages. While he managed to escape impeachment, some parliamentarians remained dissatisfied.

Here is a breakdown of Mirkazemi's comments during this session:

> Roughly 38 per cent of villagers in Iran have access to gas.

> Gas transmission has reached 836 cities and 2,445 villages in the country.

> The government is ahead of the national gas distribution schedule.

> The Petroleum Ministry signed all South Pars contracts in 2010.

Mirkazemi has to walk a fine line between increasing gas transmissions to Iran's rural population and increasing gas exports. This often leads to conflict with those Majles members who are trying to extend gas transmissions to their constituencies and want investments in their respective regions. Mirkazemi is often forced to defend his decisions for implementing various projects and why he chooses gas exports when many Iranians still do not have access to gas.

For more news and expert analysis about Iran, please see Iran Strategic Focus.

© 2010 Menas Associates

EU rejects Iran's offer of nuclear tour

EU's Foreign Policy Chief, Baroness Ashton, has said that the agency has rejected Iran's offer to tour its nuclear facilities, as it is the responsibility of the International Atomic Energy Agency (IAEA). Speaking about the EU's decision Lady Ashton said it was regrettable, but remained hopeful about the talks with Tehran due to take place later this month.

"What I'll be saying is the role of the inspections of nuclear sites is for the IAEA and I do hope Iran will ensure that the IAEA is able to go and continue and fulfill its work," said Lady Ashton.

Iran said it was willing to give a tour of its nuclear grounds to a number of key world powers including representatives from China and Russia, but not the US. Lady Ashton said she had consulted with both Russia and China before deciding to decline the invitation. The tour, should the invitation have been accepted, would have taken place ahead of the second round of talks about Iran's nuclear programme scheduled to take place in Istanbul later in January.

"I obviously coordinated with the other members of the E3+3 (six powers) who were invited. My view is that though this is not an invitation that I'm taking a negative view of, it's not our job, and looking at the sites and establishing what they are requires expertise," Lady Ashton said, referring to IAEA inspectors.

The UN and the US suspects Iran of trying to develop nuclear weapons, but Iran insists that its nuclear programme is designed for civilian purposes only. Some have spoken out against Iran's invitation accusing the Islamic republic of trying to dupe the West in to a false sense of security while aiming to split the six world powers and wane the sanctions against Tehran.

In trying to counteract these accusations Iran's interim Foreign Minister Ali Akbar Salehi said that the offer was meant as a "goodwill gesture".

"We have invited the ambassadors of the European Union and Non-Aligned Movement (developing countries) entities ... to visit Iran's nuclear facilities so that the lies propagated by some non-benevolent countries regarding Iran's nuclear activities are shown," said Salehi.

The second round of nuclear talks between Tehran, and the permanent UN Security Council members - the U.S. Russia, China, Britain, France - plus Germany, is due to take place in late January, but the date is yet to be confirmed.

Sources: BBC News, Reuters, RadioFreeEurope, The Voice of Russia

For more news and expert analysis about Iran, please see Iran Strategic Focus.

Iran detains US woman on spying charges

According to Iranian press, an American woman has been detained by the Iranian authorities on suspicion of spying. The woman, who is said to have entered the country illegally, was arrested near the town of Norduz, some 600km northwest of the capital Tehran.

A state owned newspaper that published the report said the 55 year old American woman, who allegedly entered Iran from the neighbouring Armenia without a visa, was carrying concealed spying equipment, but refused to reveal what the equipment was for.

This latest arrest could potentially further strain relations between US and the Islamic republic. Iran is currently holding two other US citizens on spying charges, arrested in July 2009. Shane Bower and Josh Fattal were detained near the Iraqi border along with Sarah Shourd, who was released last September.

Shourd, released on bail of $500,000, returned to the US and has maintained her innocence. Her two companions remain in jail awaiting trial, due to take place in November. Bower and Fattal also deny they were spying, while the US has doubts as to whether they crossed into Iran at all.

Sources: Reuters, Aljazeera, AP, CBS News

For more news and expert analysis about Iran, please see Iran Strategic Focus.

Iran cuts gasoline subsidies but its petrochemical industry is thriving

Iran's Oil Minister Massoud Mir-Kazemi said that Iran produced more than one billion litres of gasoline to meet domestic demands. Addressing the country's lawmakers on Tuesday 21st December, he said that Iran defied expectations of shortages.

“Today, the Oil Ministry's staff are implementing the targeted subsidiary plans … and should any problems arise, we will tackle them within the hour,” said Mir-Kazemi.

“This proposal, which places the most pressure on the Oil Ministry, is being gradually implemented,” explained Mir-Kazemi, referring to President Mahmoud Ahmadinejad's economic reform plans.

Part of the plan is phasing out national subsidies for fuel and food, which Iran began implementing on Sunday 19th December. Speaking about it on national television Ahmadinejad told Iran that the plan would lead to a better and more healthy economy, as domestic energy consumption would decrease making it possible to export the extra reserves.

Mir-Kazemi seconded Ahmadinejad's expectations by saying that higher prices would encourage people to use less fuel and cause less pollution, which is a serious problem in the country's capital Tehran.

Under the new plan, the price of gasoline has risen fourfold from 1,000 rials per liter to 4,000 rials, and fuel beyond a person's quota – which is 50 litres per month – now costs 7,000 rials per litre.

Last week, Mirkazemi said that Iran intends to increase gasoline production capacity by 10 million litres per day. It currently produced 45 litres per day, and is the second biggest crude oil producer in the Middle East.

In other related news, Iran's Deputy Oil Minister for Petrochemical Affairs Abdolhossein Bayat has said that Iran's petrochemical industries exported over 10million tonnes of product in the first 9 months of the current Iranian year [March 21-December 21].

"More than 10mln tons of petrochemical products have been exported since the beginning of the current year, which is 22% higher than the same period in last year," said Bayat said.

He also said the country's petrochemical industry was now worth $6.2 billion, which showed a 47 per cent growth compared with revenues of petrochemical exports last year.

"This year will see a 10.5-mln-ton increase in the production capacity because of a 5.2 billion dollar investment in the petrochemical sector," said Bayat.

Sources: PressTv, Fars News Agency, Upstream

For more news and expert analysis about Iran, please see Iran Strategic Focus.