Khamenei-Controlled Company Stands to Reap Billions in Profits from New Oil Deals

Saeed Ghasseminejad, Amir Toumaj, Emanuele Ottolenghi, Mark Dubowitz, Jonathan Schanzer
17th October 2016 - Quoted by The Tower

A conglomerate controlled by Iranian Supreme Leader Ayatollah Ali Khamenei is poised to reap huge profits from new oil deals after the country’s petroleum market was opened up in the wake of last year’s nuclear deal, two researchers at the Foundation for Defense of Democracies wrote in a policy brief on Tuesday.

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Saeed Ghasseminejad and Amir Toumaj reported that Iran’s Oil Ministry has “provided at least $2.2 billion in preliminary contracts to a subsidiary of the Execution of Imam Khomeini’s Order (EIKO), a conglomerate that Khamenei controls, to increase production from four oil fields.”

EIKO was founded in 1989 to administer properties that had been abandoned after Iran’s 1979 Islamic revolution. The scope of the original order has “grown into a vast business conglomerate – everything from agriculture to leisure resorts, parking lots, and residential complexes,” the researchers explained.

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Foreign firms that seek to invest in Iran’s oil sector must partner with an Iranian counterpart, the researchers explained. “EIKO director Mohammad Mokhber [then] laid out an ambitious plan for EIKO to become Iran’s first major oil exploration and production company, to compete in the international market, and even to drill abroad,” the researchers pointed out. EIKO is currently in talks with European firms about partnering over four oil fields. EIKO also hopes to sign a contract to develop the Azadegan oil field in southwestern Iran, which is believed to have a 33 billion barrel capacity.

EIKO’s expansion plans, Ghasseminejad and Touraj write, “underscore an unsavory but unavoidable truth. In the oil sector, as in other key sectors from petrochemicals to telecommunications, it will be the regime’s most intransigent elements—not the Iranian people—that are set to gain the most from sanctions relief.”

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For example, Ghasseminejad and Emanuele Ottolenghi warned in May 2015 that the groups most likely to be strengthened by the nuclear deal were businesses controlled by Khamenei. A few months later, the think tank’s executive director, Mark Dubowitz, and its vice president for research, Jonathan Schanzer, wrote that lifting the sanctions on EIKO would mean that “Khamenei will be free to invest billions around the world with impunity.”

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iran, iran.-nuclear-deal