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Iran Report: October 21, 2002

21 October 2002, Volume 5, Number 38

KHATAMI'S SPANISH VISIT OFF TO A BAD START. Iranian President Mohammad Khatami is scheduled to begin a three-day state visit to Spain on 28 October, but his advance team has already managed to offend the hosts. Iranian protocol officials said that all women participating in functions with Khatami should cover their heads with scarves, and that alcoholic beverages should not be served at any meetings or official banquets. The Spaniards reacted sensibly -- the royal court cancelled a dinner it had planned in Khatami's honor, and Queen Sofia and the wife of Prime Minister Jose Maria Aznar announced that they would not attend any functions with Khatami, Barcelona's daily "El Periodico" reported according to RFE/RL's Persian Service on 13 October.

A 60-member delegation of Iranian private-sector representatives is scheduled to accompany Khatami. An anonymous source said in the 15 October "Iran News" that Iran's trade and investment laws dampen the eagerness of Spanish businesses to expand trade and investment there. Minister of Labor and Social Affairs Safdar Husseini in a 15 October speech in Arak made a similar point, saying that Iran must eliminate state control of the economy if it is to attract investors. Husseini called for a competitive market economy, and he said that legislative bills that renovate industry, create a single exchange rate, and amend the tax law are helpful steps. Husseini added that improvements in the economy would alleviate the unemployment situation. (Bill Samii)

KHATAMI'S FLYING VISIT TO KYIV. President Khatami arrived in Ukraine for a two-day official visit on 15 October, where he was greeted at Boryspil Airport by Ukrainian Foreign Minister Anatoliy Zlenko. Khatami met Ukrainian President Leonid Kuchma later that day. Subsequent discussions covered cooperation in aircraft construction, expanded energy relations, and the signing of memoranda of understanding.

Defense industries play a major role in Iran-Ukraine trade. For example, Ukrainian legislator Hryhoriy Omelchenko said at a news conference in Kyiv on 15 October that he has evidence that Ukraine sold Grad missiles (for use in multiple-launch rocket systems) to Iran through Egypt, Ukrainian "Defense Express" website reported. The Iranian Embassy in Kyiv announced before Khatami's visit that one of the topics of discussion would be aircraft building. Ukraine helped set up the production line for the twin turbo-prop AN-140 cargo/passenger aircraft in Isfahan, and Iran has shown an interest in the AN-74 cargo aircraft and the TU-334 short-range jet aircraft. Kuchma announced at a 15 October press conference that Khatami agreed to establish a joint aircraft-building consortium, UNIAN news agency reported. Antonov scientific and technical aviation company Deputy Director Oleksandr Kiva said on 15 October that the AN-140, AN-74TK-300, and AN-124-100 Ruslan aircraft are to be displayed at an air show in Iran from 30 October-3 November, "Defense Express" reported.

Iran and Ukraine would like to expand their relations in the energy field. Ukrainian Foreign Minister Zlenko said that his country could serve as a route for Iranian gas exports to Europe. "Ukraine is ready to offer its territory to transport gas" from Iran to the EU, he said according to Interfax-Ukraine on 16 October, and he added that "[discussions on] this issue are at the initial stage." Zlenko said that Kyiv and Tehran are considering a pipeline from Iran to Armenia and onward, but so far there is insufficient funding. Iranian Energy Minister Habibullah Bitaraf and Ukrainian Ambassador to Tehran Vadym Prymachenko also discussed building gas-fuelled power stations in Iran, according to IRNA on 29 July.

Iranian Minister of Industries and Mines Ishaq Jahangiri and Ukrainian First Deputy Prime Minister Oleh Dubyna signed a five-year memorandum of understanding on economic and commercial cooperation on 15 October that involves economic, scientific, and technological facilities in Tehran and Kyiv. Iranian and Ukrainian officials signed another memorandum dealing with smuggling and narcotics, and the two countries' health ministers signed a memorandum dealing with medical training, pharmaceuticals, and medical instruments, according to IRNA and Interfax-Ukraine.

Ukrainian Foreign Minister Zlenko said after a 16 October meeting with Khatami and Iranian Foreign Minister Kamal Kharrazi, "Despite the bilateral interest in deepening cooperation between Ukraine and Iran, this year marked a downward trend in trade turnover." Zlenko hoped that the five-year economic-cooperation accord signed the previous day would "form a basis for stepping up cooperation between the two countries." When Zlenko came to Tehran in December 2001, he called for the promotion of bilateral economic ties. (Bill Samii)

KHATAMI AT ECONOMIC COOPERATION ORGANIZATION MEETING. President Khatami arrived in Istanbul on 13 October to attend the summit meeting of the Economic Cooperation Organization (ECO) and hand over the organization's rotating presidency to Turkey. Iran, Turkey, and Pakistan created the ECO in 1985 as the successor to the Regional Cooperation for Development, which was created in 1964. Other members of the ECO are Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Turkmenistan, and Uzbekistan. Speaking at Mehrabad Airport before his departure, Khatami said that, although the ECO mainly deals with economic, cultural, scientific, and technical issues, its actions also have political and security implications, state television reported.

Khatami said in his 14 October speech to the summit that unilateralism is unacceptable and Iran opposes unilateral action in Iraq. He explained, according to IRNA, that Iran respects Iraq's territorial integrity and sovereignty, and he called on Baghdad to comply with UN resolutions. Khatami discussed Iraq and the Kurds the next day. According to Iranian TV, he said: "The Kurds in Turkey are Turkish. That means that they are part of the Turkish people. The Kurds in Iran are part of the Iranian nation and the Kurds in Iraq are part of the Iraqi nation and the same is true of Syria. Therefore, we want the territorial integrity of all countries to be preserved...we oppose any intervention in any area on the basis of ethnicity and religion because this will only create discord and jeopardize the national security of various countries. It is for that reason that we support the territorial integrity and national unity of Iraq."

Khatami also called on the member states to speed up work on Afghanistan's reconstruction and to help strengthen security there. Under current circumstances, Khatami said, the ECO is expected to help the Afghan people. Khatami noted that the ECO has established a fund to finance Afghanistan's reconstruction, and he said that the fund should be used. Khatami met with Afghan President Hamid Karzai on 14 October and stressed the importance of restoring peace and security in Afghanistan. Karzai stopped in Iran on his way to and from the ECO summit.

During his speech, Khatami described the Almaty-Tashkent-Turkmenabad and Tehran-Istanbul railway links as effective steps in facilitating regional trade. Khatami also called for knowledge exchange in the agriculture field, protecting the environment, and the creation of an ECO electricity grid.

Tajik President Imomali Rakhmonov and Khatami on 14 October spoke about bilateral mining, energy, and roads agreements. Khatami and Rakhmonov also met with Afghanistan's President Karzai, and they agreed that Iran-Tajikistan relations should be boosted via Afghanistan. (Bill Samii)

KHATAMI MEETS WITH AZERBAIJANI COUNTERPART. President Khatami and Azerbaijani President Heidar Aliyev discussed the need for a Caspian Sea legal regime when they met privately in Istanbul on the sidelines of the ECO summit (see above), IRNA reported on 15 October. Khatami said that continued dialogue between the two leaders would help overcome "the previous minute misunderstandings" that had cropped up between the two countries. Most of these "misunderstandings" relate to use and division of the Caspian Sea's resources, and last year this almost led to a naval battle when an Iranian patrol boat chased off an oil-exploration ship in a disputed area (see "RFE/RL Iran Report," 30 July 2001).

Some members of the Iranian parliament want to propose a vote of no confidence in Foreign Minister Kharrazi for his mishandling of the Caspian issue. According to the 2 October "Iran News," this is because Iran appears to be the only country left off the Caspian gravy train as all the other states sign bilateral agreements. Indeed, the Kazakh lower house on the same day approved a bill that would ratify a bilateral agreement with Russia on dividing the seabed of the northern Caspian Sea, according to Interfax. Tehran has been arguing that each littoral state should get an equal 20 percent share of the seabed and waters, whereas its border accounts for less than 14 percent of the shoreline. Baku and Moscow have reached a bilateral agreement on dividing the Caspian as well.

During his meeting with Aliev, Khatami also touched on expanded regional security ties and the need for highways and railroads that would connect the two countries' major cities. The joint Azerbaijani-Iranian commission is scheduled to meet on 29-30 October to discuss recent joint projects and agreements, Baku's Space TV reported on 17 October. Space TV also reported that the date for Khatami's visit to Azerbaijan has changed from this autumn to 20 March 2003, according to Azerbaijani Ambassador to Iran Abbasali Hasanov. Hasanov explained the postponement by saying that work on various Azerbaijani-Iranian economic projects is incomplete. (Bill Samii)

TEHRAN-ISLAMABAD RELATIONS EXPANDING. Pakistani President Pervez Musharraf met with Iranian President Khatami on 14 October when they were both in Istanbul for the ECO summit, where they discussed the importance of reconstructing Afghanistan. They also discussed support for the Palestinian people, the transfer of Iranian gas to India via a pipeline that passes through Pakistan, and Pakistan-India tensions, Islamabad's "The News" reported on 15 October.

On his way to Istanbul for the ECO summit, Musharraf spent a few hours in Tehran on 13 October. While at Mehrabad Airport, Musharraf met with Afghan President Karzai, Iranian Vice President Mohammad Reza Aref, Iranian Deputy Foreign Minister Mohsen Aminzadeh, and others. Some of the topics they discussed were Afghanistan's reconstruction requirements, the new Afghan currency, creation of an Afghan army, the Pakistani elections, and the Iran-Pakistan-India gas pipeline, according to IRNA, Pakistan's PTV, and Bakhtar news agency.

Earlier in the month, a delegation of five Iranian officials, headed by Islamic Republic of Iran Broadcasting Director Ali Larijani, visited Islamabad. Pakistan Television Corporation, Pakistan Broadcasting Corporation, and IRIB signed a protocol on 2 October that deals with the sharing of news and programs, joint productions, training, musical exchanges, and the opening of Pakistani news bureaus in Tehran, Associated Press of Pakistan (APP) news agency reported. Pakistani Information Minister Nisar Memon announced on 1 October that PTV would begin carrying a daily five-minute Persian-language news bulletin on 15 October.

Pakistani Minister of Petroleum and Natural Resources Usman Aminuddin told Larijani that Pakistan fully supports the Iran-India gas pipeline project, APP reported on 2 October, and ensured the physical security of the pipeline. Aminuddin said that Islamabad is committed to the passage of hydrocarbons through Pakistani territory, because this ensures regional stability and it brings socioeconomic benefits to the Pakistani people. He also mentioned a Pakistan-Iran coastal-refinery project, and he expressed concern about the smuggling of Iranian petroleum products from Sistan va Baluchistan Province into Pakistan (see "RFE/RL Iran Report," 29 June 2001). Larijani proposed a trilateral India-Pakistan-Iran meeting in Tehran, at which they could discuss concerns about the security of the gas supply. (Bill Samii)

KARZAI LOVES HIS WESTERN NEIGHBOR. Not only did Afghanistan's President Karzai stop in Tehran on the way to the ECO summit in Turkey and then meet with President Khatami in Istanbul, he also stopped in Tehran on the way back to Kabul. During his return visit to Tehran Karzai met with Minister of Economic Affairs and Finance Tahmasb Mazaheri to discuss ways of increasing economic cooperation and means by which Iran could participate in the reconstruction of Afghanistan, Mashhad radio reported on 16 October. Mazaheri described potential cooperation in agriculture, counter-narcotics, crop substitution, electricity, and road construction.

One day before Karzai's visit, "Iran" newspaper reported that Afghanistan had just released an unknown amount of water from the Kajaki Dam that would flow into Iran in the following week. The water is expected to relieve the drought conditions in Sistan va Baluchistan Province. Sandstorms in the province have buried villages, destroyed farmland, and as a result of the destruction of pasturage has killed a great deal of livestock. Asthma and eye disease among locals have increased, too. Iran and Afghanistan reached on agreement on using the Hirmand (Helmand) River's waters in September (see "RFE/RL Iran Report," 23 September 2002).

IRANIAN MILITARY PRACTICES ELECTRONIC AND SPECIAL WARFARE... Brigadier General Seyyed Nasser Husseini said that the enemy has put its threats into practice after the terrorist attacks of 11 September, according to the 13 October "Kayhan." He added: "The politics of the region have been transformed and new threats have emerged. Therefore, we will have to adopt positions that respond to such threats. We will have to ensure that the military and defense forces of our country are fully prepared and that they are ready to respond to any threat."

In an effort to improve readiness, the Iranian armed forces staged the Eqtedar-81 maneuvers from 11-13 October in the Aliabad region of Qom Province. Ranger units and electronic-warfare capabilities were tested in the first stage of the exercises, Iranian state television reported on 11 October. This included the planning of communications networks and the first-time use of "mobile listening posts with precise surveillance systems" and the domestically manufactured Basir-110 radar. The Meisam tracking device was used operationally for the first time, and radio-jamming equipment was employed.

The second phase of the exercise was held on 12 October. The army commandoes' 23rd Division carried out nocturnal guerrilla and irregular operations, state television reported. They also attacked the positions of a hypothetical enemy, and according to maneuvers spokesman Brigadier General Nabizadeh, there was chemical-warfare training.

Expediency Council Chairman Ayatollah Ali-Akbar Hashemi-Rafsanjani attended the final phase of the exercises, on 13 October. During this phase, fixed-wing and rotary-wing aircraft bombed "predetermined targets of the hypothetical enemy" and then army troops "conquered the positions of the hypothetical enemy with the support of preparatory fire." Paratroopers from the 55th Brigade jumped from American-manufactured C-130 Hercules aircraft using Iranian-made parachutes. Also in use were American-manufactured CH-47 Chinook helicopters, Bell-214 helicopters, and M-113 armored personnel carriers. Unmanned aerial vehicles were used to reconnoiter and photograph the area where the exercises were conducted, maneuvers spokesman Brigadier General Nabizadeh said in the 13 October "Kayhan."

The Ashura-4 military exercises took place in the Sirjan region of Kerman Province over four days at the end of September. More than 30,000 members of the Islamic Revolution Guards Corps' (IRGC) infantry, motorized, mechanized, and artillery units participated in the exercises. IRGC deputy operational commander Brigadier General Hussein Salami said that the troops used modern tactics and technology, because the future will involve asymmetric warfare. Salami described the operations as a "turning point" in the use of modern equipment and tactics in line with future requirements, state radio reported on 27 September. IRGC commander Major General Yahya Rahim-Safavi told his troops, "What is important, under the current circumstances, is that the mission of the armed forces, the [Islamic Revolution Guards] Corps and the Basij [Resistance Force] is to defend Islamic Iran and remain vigilant." (Bill Samii)

...AND DEVELOPS ELECTRONIC EQUIPMENT... The Ministry of Defense and Armed Forces Logistics (MDAFL) during Sacred Defense Week inaugurated several telecommunications projects. One such project is the mass production of three types of military wireless receivers that were developed and manufactured by MDAFL experts, state television reported on 28 September. MDAFL chief Ali Shamkhani said that through these projects the security of long-distance and high-frequency communications would become more effective, a proposed new tactical VHF receiver would be immune to electronic-warfare measures, and armored vehicles would get specially built wireless receivers. (Bill Samii)

...AND REPAIRS AIRCRAFT. Iranian personnel repaired and upgraded Soviet-manufactured MIG-29 Fulcrum aircraft at one of the two air bases in Tabriz, according to state radio and television programs on 30 June. The renovations were done at half the cost of having them done in Russia. Iran currently has the Fulcrum A, but has inspected and expressed an interest in buying the Fulcrum C from Moldova. The U.S. purchased 21 MIG-29s from Moldova in 1997 to preclude their falling into the hands of the Iranians. Air force commander Brigadier General Pardis added that Iranian specialists are designing radar that used to be purchased from Western countries, and this will save a lot of money.

The Air Force Exhibition at Mehrabad Airport during the late-September Sacred Defense Week included 19 pavilions and 18 types of rotary- and fixed-wing aircraft. Among the aircraft on exhibit were American F-4 Phantoms, F-5 Tigers, and F-14 Tomcats, as well as Soviet MIG-29 Fulcrums and Sukhoi-24 Fencers. There are similar exhibits at other air force bases, Brigadier General Ali Akbar Zamani said, but the one in Tehran is the biggest, "Jomhuri-yi Islami" reported on 26 September. (Bill Samii)

PARLIAMENTARIAN DECRIES CANINE MISTREATMENT. During the 4 September session of the legislature, Mashhad representative and Health and Hygiene Committee member Fatima Khatami censured the interior minister and called for a more humane way to put down stray dogs. She said: "Most of these dogs are shot down in the vicinity of residential areas. Citizens are frightened by these gunshots and greatly distressed by the howling of the dying animals." Unfortunately, man's best friend is not held in very high regard in Iran.

The Tehran and Qom police departments in August 2001 threatened to arrest the owners of stores that sold dogs in order to protect public morality. And the head of Qom's Imam Ali Research Center, Hojatoleslam Hussein Dashti, complained about dogs in January 2001. He said, "Thanks to the norms of laxity in democracy and freedom under our great government, the import of short-pawed canine pets was on the increase," adding, "Our youngsters can be seen parading their dogs in their arms."

A dog probably bit Urumiyeh Friday prayer leader Gholamreza Hassani when he was a boy, judging from his recent anticanine comments. The "Etemad" daily newspaper on 12 October quoted him as saying, "I call on the judiciary to arrest all long-legged, medium-legged, and short-legged dogs along with their long-legged owners." "Otherwise I'll do it myself," he added. In June 2001, Hassani complained that Iran's nouveaux riches commit excesses including carrying dogs in the streets, "Iran Daily" reported. And in March 2001, he said that "training dogs" and misappropriating Islamic Culture and Guidance Ministry funds for establishing newspapers does not benefit the people, "Aftab-i Yazd" reported.

Regardless of such prejudices, dogs are actively employed in Iran. Dogs sent from France are used for detecting drugs, and trained dogs were used to find victims of the August 2001 flood in Gulistan. (Bill Samii)

PARLIAMENTARIANS AFTER HEALTH MINISTER. Minister of Health, Treatment, and Medical Education Masud Pezeshkian (a "pezeshk" is a physician) has the right name for the job, but some members of parliament want to get rid of him anyway. At this point it would appear that he has the necessary political backing to survive.

On 1 October Hamedan representative Hussein Loqmanian submitted to the legislature's presiding board a motion signed by 38 deputies to dismiss Pezeshkian. Loqmanian said that he and his colleagues believe that the Health, Treatment, and Medical Education Ministry does not have a clear strategy, the production and distribution of drugs is extremely confused, medical services are incompetent, the quality of education at medical universities is falling, and the medical colleges and universities are poorly managed.

Asadabad representative Zabiullah Safai said on 24 September that more than 50 legislators have signed the motion to interpellate Pezeshkian. Safai described problems with the medicine supply, mismanagement of hospitals, and poor medical training, "Entekhab" reported the next day. "Iran News" on 7 September cited "Hambastegi" as reporting that there are about 100 signatories to the motion to censure Pezeshkian, and their grievances include the Health Ministry's recruitment of incompetent employees and the absence of meritocracy, as well as Pezeshkian's failure to interact with the legislators.

Mashhad representative Fatima Khatami on 1 September protested that the Ministry of Health, Treatment, and Medical Education is unaccountable and it does not cooperate with the legislature's Health and Treatment Committee. She said that the ministry has not appointed a representative to the committee, and she questioned how the committee could communicate with the ministry in case a public health crisis occurs.

Also on 1 September Hussein Loqmanian discussed a motion by 14 representatives to interpellate Pezeshkian. Loqmanian said in the parliamentary lobby that his colleagues object to the ministry's lack of accountability to the parliament and inattention to the parliamentarians' demands and questions, the failure to implement the Third Development Plan, and the failure to prepare a strategic plan. Loqmanian also described as reasons for interpellation poor management at medical universities and poor medical education.

The 25 September "Resalat" noted that the Islamic Iran Participation Party (IIPP) is behind the effort to interpellate Pezeshkian. Some parliamentarians believe that the IIPP is going after Pezeshkian because he did not submit to the party's demand to replace some of the medical colleges' chiefs and some Health Ministry personnel, "Resalat" reported. There also is anger from a dispute about handing over responsibility for medical training from the Ministry of Health, Treatment, and Medical Education to the Ministry of Education and Training -- Pezeshkian threatened to resign over this issue in June.

At this point it seems unlikely that the interpellation will get very far. "Hayat-i No" speculated on 2 October that the failure of the parliamentary presidium to announce the interpellation motion indicates that there will be an attempt to resolve the dispute through discussion and compromise. An anonymous member of the parliament's Health Committee, furthermore, said in the 25 September "Resalat" that President Khatami seriously objects to Pezeshkian's interpellation.

Efforts to interpellate Pezeshkian may in the end become unnecessary. There was an attempt to assassinate him when he visited Lebanon during the summer, according to Arabic press sources cited by the hard-line "Yalisarat al-Hussein" on 26 June. Lebanese forces discovered and disarmed a bomb placed in an area that Pezeshkian was about to visit. (Bill Samii)

IRANIAN POLLSTER JAILED. Behruz Geranpayeh, head of the Islamic Culture and Guidance Ministry's National Institute for Research Studies and Opinion Polls, was detained on 16 October following a court ruling, "Aftab-i Yazd" reported the next day. An "informed source" was cited as saying that Geranpayeh's detention was tied to a poll published on 22 September, in which the majority of participants favored negotiations with and relations with the U.S. (see "RFE/RL Iran Report," 7 October 2002). The source also said that bail is set at 2 billion rials ($1.15 million at the official rate, $250,000 at the market rate) and it probably will increase to 5.5 billion rials. Also on 16 October the court summoned Tehran parliamentary representative Ahmad Burqani in connection with this case. Burqani had served previously in the Islamic Culture and Guidance Ministry, and he told IRNA that the court asked him to explain his relationship with such polling institutes. (Bill Samii)

TEHRAN DISCOUNTS GAS TO TURKEY. Iranian government spokesman Abdullah Ramezanzadeh announced on 16 October that the cabinet has confirmed a new accord on exporting natural gas to Turkey. Turkey had stopped gas imports from Iran due to concern about the quality of the gas (see "RFE/RL Iran Report," 16 September 2002). Khomeini-Shahr parliamentary representative Ali Rezai, who serves in the parliamentary Energy Committee, had dismissed Turkish criticism about gas quality, telling "Iran Daily" on 8 October, "Turkish claims to that effect are baseless...Ankara has been trying to force Iran to give it a discount on gas prices...." Ankara's efforts paid off.

Minister of Energy and Natural Resources Zeki Cakan visited Tehran and met with his Iranian counterpart, Bijan Namdar-Zanganeh, on 8 October. An apparent result of the meeting was Iran's decision to discount the gas sold to Turkey by more than 9 percent. The percentage of the reduction will increase proportionately with the quantity of imported gas, TRT 2 television reported from Ankara on 11 October. If Turkey buys all the gas it agreed to buy previously, its discount will exceed 12 percent. Moreover, the "take-or-pay" amount was decreased from 87 percent to 70 percent, which effectively means that Turkey can choose not to buy 30 percent of the gas it previously pledged to import annually from Iran.

Tehran may be thinking in terms of long-term benefits. Zanganeh described Turkey as the gateway to the European market for Iranian gas when he met with Cakan. Turkish President Ahmet Necdet Sezer spoke about bilateral economic issues with President Khatami during the latter's visit to Istanbul in mid-October. (Bill Samii)

IRAN PROPOSES REGIONAL ENERGY MARKET AT GAS CONFERENCE. Iranian officials participated in the mid-October Gastech 2002 conference in Qatar, where Petroleum Minister Bijan Namdar-Zanganeh called for the creation of a regional energy market. He described his idea in a 13 October interview with Iranian state television: "I proposed that we start thinking about setting up an open energy market in the region, namely, the southern Persian Gulf littoral and Iran. Moreover, I also proposed that we connect the networks of various countries in order to improve the situation and ensure that all the consumers and producers make maximum use of it."

Iran has the world's second-largest proven natural-gas reserves -- an estimated 23 trillion cubic meters (tcm) -- and most of these reserves are in nondeveloped fields, according to the U.S. Energy Information Administration. The biggest field is South Pars, which is an extension of Qatar's North Field. Other gas fields are the 1.33-tcm North Pars, the 181-billion-cubic-meter (bcm) Khuff (Dalan) reservoir of the Salman oil field, the onshore Nar-Kangan fields, the 368-bcm Aghar and Dalan fields in Fars Province, and the Sarkhun and Mand fields. Recent natural-gas discoveries include the 22.6-bcm Zireh field in Bushehr Province, the 113-bcm Homa field in Fars Province, and the 396-bcm Tabnak natural-gas field located in southern Iran.

Iran is trying to develop these gas fields with foreign help, and so far eight out of 30 phases of the South Pars project have been awarded to foreign contractors. A contract for phases nine and 10 of South Pars was signed on 15 September by the National Iranian Oil Company and a consortium consisting of South Korea's Lucky Goldstar Consortium, Iran's Oil Industry Engineering and Construction, and Pars Oil and Gas Company. About 85 percent of the project's funding would be provided by foreign sources that would be repaid with revenues from the exports, IRNA reported. Completion of the projects is expected to take about 4 1/2 years.

Norway's Statoil submitted a bid for phases 11 and 12 (previously nine and 10) of South Pars in 2001. Statoil also bid on South Pars six, seven, and eight and spent over a year in negotiations. Gholamreza Manuchehri, manager of these phases, said that Statoil would invest $350 million on the project, Dow Jones Newswires reported on 29 August. Manuchehri said that Statoil's return on capital employed (ROCE) and the level of Iranian participation in the project's senior management still must be determined. A Statoil source said that they would like 12 percent ROCE. Iran's Petropars would like the Norwegian funding to start immediately, whereas the Norwegians would like a six-month deferral to make sure that Petropars has the necessary financing.

Namdar-Zanganeh said on 31 August that some 100 million cubic meters of gas would be available once phases one, two, and three of South Pars, Tabnak, and Sarkhun gas fields reach the operational phase, IRNA reported. He predicted that phases four and five of South Pars would be commissioned in the next two years and phases six, seven, and eight would become operational in 2005. Namdar-Zanganeh also predicted that exploitation of the South Pars gas field would yield revenues in excess of $300 billion, IRNA reported on 10 June. (Bill Samii)