From 1997 when Hojatollah Ghanimi-Fard was promoted to deputy oil minister, he turned to a key figure in Iran's oil decision making system. He has been responsible for NIOC's overseas downstream assets. Khabar Online conducted an interview with the official on the current position of Iranian oil industry and possible changes in the crude oil prices at international markets.
Are you joining OPEC as one of the officials of Iran's Oil Ministry or as an OPEC staffer?
Obviously from now on I will work for OPEC as a technical staffer and will receive my monthly salary from that organization. However my assignment in OPEC should have been approved by the Oil Minister [Mas'oud Mir Kazemi] and he endorsed my new mission. Of course I must underline that in all these years as an employee of the Oil Industry University I had been tasked with working in Oil Ministry, so I needed the approval of the minister.
One of the major criticisms made by oil experts against the policies of Iran's Oil Ministry is targeted at replacing international giant oil companies including Royal Dutch Shell and Total with Chinese companies. In your view why the ministry has tended to Asia oil companies. Is it influenced by imposing new wave of sanctions against Iran?
I would answer you with regard to the recent economic boom in Asian countries compared to Europe and predictions made about the economic future of the both regions. Currently the economic crisis hitting European countries has made problems for those countries which trade based on euro and dollar. According to the new surveys, the growth of the United States gross domestic product (GDP) is predicted to be limited to 2.3 percent by 2015. Some European countries are even suffering from negative GDP growth rates.
On the other hand figures show that the same rate for developing countries is up to 8.7 percent. In the forthcoming years most of the Asian countries would enjoy a very desirable economic growth, for example China's GDP growth rate is predicted to be about 10 percent. So it's quite clear that in the next years Chinese companies will have a more financial power in comparison with European and American companies. So turning to Chinese and other Asian companies might be in the best interests of the Islamic Republic.
As Spain's GDP growth rate is predicted to be -0.4 percent, Repsol Co is facing with numerous financial difficulties, it has formally apologized as they cannot be in the phases 13 and 14 of the South Pars liquefied natural gas (LNG) plan saying that they have withdrawn from the project due to a shortage in financial sources and facing a dramatic economic crisis in their country. So, those countries which focus on Asian states including China and India would be successful. That's why we are attempting to boost our ties with such countries.
In this trend, the United States' economy would also be severely hit by the crisis. Do you think that the recent harsh stance taken by the US president Barack Obama is in line with gaining the satisfaction of the American people and involving them in political issues rather than economic ones to cover up its inability to resolve the domestic problems?
Based on new forecasts the US GDP growth rate will be limited to almost 3 percent and even less than that, therefore if Obama could not recover the American economy, he would definitely lose its current status.
The late harsh criticism made by Obama against Iran may be traced in his efforts to derive the people's satisfaction. To be successful in the US parliamentary election slated for November and the next presidential election in 2013, he needs to be backed by the Parliament and get the public satisfaction. As the United States is suffering from an undesirable economic situation, his recourse is criticizing Iran to save his position. That's why he has turned to a spokesman who provokes imposing more sanctions against Iran.
Is it possible that the crude oil and gas prices fall in the international market due to the current global economic crisis?
India and China are now among the key countries which boost the oil market in the economic scene. No Western country would allow China to lower the price of its products and dominate the international market, so the fall of oil price in the current year seems unlikely.
There are many rumors spread on the way Iran is selling oil in the international market, what method the oil ministry has adopted to fulfill the task?
At the moment we deal with some companies which have been trading with us from many years ago. They are buying our crude oil based on the earlier methods. But new traders should provide certificates clarifying their statute, shareholders, balance of trade within the three years, a credible and unconditioned contract with an operating refinery, the records of their trades with different countries and three letters of confirmation approved by three banks which are regarded credible by NIOC. Then we provide them with our general conditions for signing an agreement and delivering oil to them.
Iran's oil price is defined based on Oman and Dubai crude oil prices and will be delivered according to unit load method. If their operation gains our satisfaction we will sign long-term deals with them. Also the oil will be sold to them on Free on Board (FOB) basis meaning the buyer covers the cost of delivery. Usually they pay us 30 days after the oil is delivered in the Persian Gulf or 10 to 20 days in The Suez Canal. Both parties will have a 90 days deadline to announce the possible problems or dissatisfactions.
- In April 2009, Iran set a deadline for Shell and Repsol to make clear their involvement in South Pars projects which has the world's largest reservoir of gas, however the West powers above them the United States have pressured oil companies to discontinue their participation in Iranian oil and gas projects. Iranian oil officials say the door is still open to Royal Dutch Shell to be engaged in the plan.
Earlier it was announced that India's Reliance Industries has stopped exporting gasoline to Iran avoiding the US punishment asserted for companies which sell gasoline to the Islamic Republic. The company also imported 90,000 barrels of crude from Iran but decided to avoid purchasing oil from Iran. Reliance hopes to increase its market share for fuel in the United States market. It is part of a general move by some countries willing to be dependent on Iran as a crude supplier.
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