Iran may fined $8-35 bln over Crescent deal

Iran Materials 16 December 2013 17:25 (UTC +04:00)

Baku, Azerbaijan, Dec.16

By Fatih Karimov - Trend: Iran may have to pay an $8-35 billion fine to the United Arab Emirates(UAE) over the Crescent deal if The Hague rules against Iran, the Pana News Agency quoted Iranian MP Alireza Zakani as saying on Dec. 16.

He criticized the cancellation of a planned meeting among MPs, the National Security Council, and the Oil Ministry to review Iran's complaint to The Hague about the deal.

Between $7-8 billion of the figure would be the fine for Iran's delay to meet its contractual obligation, he noted.

The Crescent contract was signed in 2011. Based on the contract, Iran was supposed to export unrefined natural gas from Salman gas field to the UAE for 25 years.

But objections from inside the country led to the cancellation of the contract. Bijan Namdar Zanganeh was Iran's oil minister back then.

Iran's National Security Council has formed a special committee to negotiate for resolving the row over the disputed Crescent deal in The Haguecourt, the Mehr News Agency quoted Iranian MP Mousa Ahmadi as saying on Dec. 7.

On Nov. 18, Elias Naderan, a member of Iran's parliament (Majis) Budget and Planning Commission said that if Oil Minister Bijan Namdar Zanganeh fails to present the commission with reasonable excuses for signing the Crescent contract, the lawmakers will be forced to ask for an interpellation.

"The lawmakers just want to defend the rights of the Iranian nation," he said.

During the presidency of Mahmoud Ahmadinejad, Iranian officials repeatedly called the contract shameful.

According to them, the price agreed on in the contract was 14 times below the market price.

In recent months, especially after President Rouhani introduced his proposed cabinet to the parliament (Majlis) and before the vote of confidence for Zanganeh, debates about the Crescent contract once again became popular.

Based on the contract, Iran was supposed to export 195 million cubic feet of gas to the UAE in the first phase. The figure could be raised to 700 million cubic feet in the next phase.

The Fars News Agency reported in June that the agreed price for 1,000 cubic meters of gas was $17.5 in the contract. And the price was fixed for 7 years.

Back in 2011 Zanganeh and some other oil officials vehemently supported the idea of signing the contract and accused the "principalists" of ignoring the country's national interests.

Alef News quoted President Rouhani's advisor, Akbar Torkan, as saying that, "When Iran signed the Crescent contract, the price of gas was low. But the mechanism of increasing the price was included in the contract itself. The weak performance of the previous administration in regards to that option has now led to a 6-billion-dollars claim [filed by the UAE] against Iran."

Edited by C.N.