Mon, Dec 31, 2007
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Iran Leads SCA Rank
OMV Keen on
Mehr Oil Block
Ombudsman Protests Slow Pace of Projects
By Masoud Safa
Trade With PGCC
To Improve
Insurance for 1.5m Day Laborers
Turkmen Air Link Resumes

Iran Leads SCA Rank
Iranian banks dominate the top positions in BankerÕs listing of Top 500 Islamic Financial Institutions.
In its new listing of Top 500 Islamic Financial Institutions (TISI), ’The Banker’ has suggested that Iran leads the world in Sharia-compliant assets (SCAs), Fars news agency reported on Sunday.
Iran tops the ranking with assets of $154.6 billion, stated the report which is the first comprehensive analysis of Islamic financial industry at the global level, incorporating Islamic financial institutions from 47 countries.
Iran, as a country in which financial institutions are 100 percent Sharia compliant, has more than doubled the amount of nearest competitors, Saudi Arabia with $69.4 billion and Malaysia with $65.1 billion, it added.
Although both Saudi Arabia and Malaysia may have bigger banking sectors than Iran, the research shows that in terms of Sharia-compliant assets they are considerably smaller. This is because Saudi and Malaysian Sharia-compliant assets as a percentage of total assets are only 31.6 percent and 25.1 percent respectively.
As the trend towards Islamic finance grows, there will be an exponential growth in SCAs worldwide, particularly as Muslim countries increase their proportion of Sharia-compliant assets, the report added.
The TISI further noted that a close examination of the top 500 institutional listing shows that Iranian banks dominate the top positions, accounting for six of the top 20 places. Bank Melli Iran and Bank Saderat Iran head the ranking with SCAs of $35.5 billion and $34.8 billion respectively.
Brunei-based insurance company Takaful IBB Berhad comes third on $31.5 billion followed by Saudi Arabia’s largest Islamic institution, Al-Rajhi Bank, on $28.1 billion.
This is while Mellat Bank ranks fifth with SCAs of $25 billion, Tejarat Bank comes eight on $19 billion, Sepah Bank holds the 11th place with SCAs of $14 billion and the private Parsian Bank sits on 12th berth with $10 billion of SCAs.
Meanwhile, the report added that the Top 15 countries table includes the UK, a non-Muslim nation, in 10th place with Sharia-compliant assets of $10.4 billion.

OMV Keen on
Mehr Oil Block
Negotiations are underway with Austrian company OMV to develop Mehr oil block in western Khuzestan province, reported ISNA quoting the explorations affairs manager of the National Iranian Oil Company (NIOC), Mahmoud Mohaddes as saying on Sunday.
Following exploratory operations in Band-e Karkheh of the block by the Austrian company, the leading Central European oil and gas group has concluded that exploitation of the field is economically viable, the official said.
Exploration by the Austrian firm reveals that the block holds an estimated two billion barrels of crude, he stated, adding that a well is being drilled in the northwest of the block for further assessment.
OMV had already requested participation in two other projects (Laleh and Danan blocks) along with another Indian company, but they were all rejected, Mohaddes elaborated, adding that a deal on developing Danan block will be signed with another contractor by the end of January.
The official, however, did not disclose the name of the company with which the deal will be finalized.
OMV, which was established in 1956 as a state owned company in Austria, is today one of the biggest corporations in oil and gas industry with group sales of 18.97 billion euros in 2006.

Ombudsman Protests Slow Pace of Projects
Studies conducted by State Inspectorate Organization (SIO) suggest that some development projects are yet to be completed despite the lapse of 16 years since they were launched.
The top supervisory body, in its studies, complained about the slow progress of the projects, saying that some plans, started in the years 1989-90, should have become operational in 2000.
“Despite the high costs of these projects, they had a physical progress of 25 percent by March 2006.“
The organization blamed poor feasibility studies prior to implementing the projects, improper sites for construction, budget deficits, inconsistency among organizations in charge of execution as well as inefficient overseeing of them for the sluggish progress of the projects, Fars news agency wrote on Sunday.
The SIO’s studies noted that reports released by the then management and planning organization underestimated the number of shelved projects.
It also added that in addition to the delays and slow progress of the projects, their costs were much higher than the estimates envisaged in preliminary agreements.
The organization noted that although the blame should partially be placed on relevant executive bodies, the main responsibility lies with the erstwhile management and planning organization. The organization’s failure to select qualified contractors, poor quality of studies needed for the projects as well as inefficient control over the performance of contractors have caused the projects move at a snail’s pace and devour huge amount of funds.

By Masoud Safa
Even the assassination of former Pakistani premier Benazir Bhutto on Thursday couldn’t make major international print media ignore one of the largest contracts in the history of Iran’s oil and gas industry.
Iran struck the 16-billion-dollar deal with Malaysia on Wednesday on the development of Golshan and Ferdowsi gas fields. The contract was signed by Pars Oil and Gas Company Managing Director Ali Vakili and Syed Mokhtar Al-Bukhari, the head of Malaysia’s Al-Bukhari Foundation. SKS Ventures, a subsidiary of Al-Bukhari Foundation, will develop the two gas fields in southern Iran.
Iranian oil officials signed the deal in line with the national policy to attract investments in oil and gas sector from non-Western, especially Asian, states. Less than a month ago, China’s biggest oil refiner, Sinopec, signed a two-billion-dollar contract on developing Yadavaran oil and gas field in southern Iran. The deal irked the neoconservative Bush administration badly, leading to objections by Washington that China was undermining the sanctions. Beijing however responded seriously to the protest warning Washington to mind its own business and not to interfere in other countries’ affairs.
The question is why Iran is looking to Asia to attract investment in its lucrative oil and gas sector. The answer is obvious.
With the economic growth at its highest in recent years, South Asian countries need energy to fuel their economy. As European energy giants such as Shell, Total vacillate about signing deals with Iran due to political pressure, Tehran has requested companies interested in South Pars and other energy projects to submit plans by June. Iran’s Oil Ministry has warned that Tehran will not wait for any foreign firms’ foot-dragging over the issue. Recently, Iranian oil officials have started intense negotiations with their Bahraini peers. The most important agreements reached between Manama and Tehran was on exports of gas to the regional country.
Shifting oil and gas deals to eastern countries is high on Iran’s agenda and has led to weakening the influence of US-led sanctions against the country.
Analysts maintain that Iran’s multi-billion-dollar contracts with China and Malaysia have disappointed US attempts to twist Tehran’s arms to force it to abandon its nuclear program.
The Financial Times said in a report after the conclusion of the deal, “While the US government has put pressure on its western allies to halt investments in Iran due to suspicions over its nuclear program, Tehran has openly pushed ahead with deals with Asian companies.“
On the other hand, some Asian countries are facing a new challenge of not knowing how long they should toe hostile US policies against Iran and lose investment opportunities in this hydrocarbon-rich Middle Eastern country.
Japan is one such country as Tokyo sees China, Malaysia and Russia seize lucrative business opportunities in Iran; it looks for a way to relieve itself from US pressure. Japan has conservatively maintained low-profile cooperation with Iran under US pressure.
Now, following the release of the US intelligence report, the National Intelligence Estimate (NIE), that acknowledges peaceful nature of Iran’s nuclear program, Washington is still wary of rising energy cooperation between Tehran and Beijing and Moscow. The Japanese government has not yet taken any official stance towards NIE. But the issue has become a matter of debate among experts pursuing Tokyo’s relations with the Middle East.
Japan has so far lost the investment opportunities in the huge Azadegan oil and gas field. But the resource-poor country is still hopeful it can seize other golden opportunities in future as its arch-rivals China has finalized its deal on development of Yadavaran and Russia has sent nuclear fuel for Bushehr nuclear power plant. It is predicted the Japanese companies will rush to Iran energy market.
Now, major Asian companies are waiting to invest in Iran. Political analysts believe there is no economic or legal justification for continuation of sanctions against Iran’s peaceful nuclear program. So far Iran has been the winner in this political tug-of-war.

Trade With PGCC
To Improve
Foreign Minister Manouchehr Mottaki stated that Iran’s trade with member states of the Persian Gulf Cooperation Council, Iraq and an unnamed Arab country currently stand at about $20 billion.
In a meeting with visiting Omani Foreign Minister Yusuf Bin Alawi, he noted that the government envisages raising joint investments and ventures with these countries to $50 billion, according to a fax sent Iran Daily by Foreign Ministry’s Press and Media Department.
Pointing to the outstanding ties between Iran and Oman, the minister noted that the two governments’ determination as well as the commonalities between the two countries led the finalization of all decisions on further enhancement of bilateral ties last year.
Mottaki stated that gas transfer from Iran to Oman, participation of Iranian contractors in Oman’s projects and the improving bilateral trade balance from the current level of $200 million to $1 billion are among the programs for expanding trade relations between the two countries.
Bin Alawi, for his part, referred to the level of relations between Iran and Oman and said that bilateral meetings and discussions have always served the interests of both countries and the region.
He added that Iran spared no effort to safeguard peace and stability in the region and establish friendly ties with regional states.
Bin Alawi noted that Iranian president’s participation in the recent meeting of Persian Gulf Cooperation Council paved the way for further improvement of mutual cooperation among regional countries.
Meanwhile, according to the Bahraini daily Al-Wasat, First Vice Chairman of Bahrain Chamber of Commerce and Industries Ebrahim Zainal called for the involvement of his country’s monetary and banking institutes in the Iranian market.
He announced that the members of the chamber will meet Iranian businessmen in the first quarter of 2008 to discuss ways of improving commercial ties.
Zainal also said that Bahrain imported the first consignment of Iranian wheat weighing 10,000 tons in the past 10 months.

Insurance for 1.5m Day Laborers
Social Security Organization plans to insure all Iranians.
The bill on social security insurance coverage for day laborers was ratified by the Majlis, announced the minister of welfare and social security.
Once the administrative bylaw is drawn up, some 1.5 million day laborers nationwide will receive insurance cover from Social Security Organization of Iran (SSOI), Abdolreza Mesri told Fars news agency in Loshan, Gilan province.
The bylaw is a unique in its kind in the world, he said, expressing hope that its executive bylaw would be ready soon.
Turning to the new schemes of SSOI, he said that based on these plans all Iranians will be covered by insurance. He cited the implementation of insurance plan for drivers under which the government pays 200,000 rials in subsidies per month and the rest of the insurance premium is paid by the drivers themselves.
He listed the custodians of mosques as the other group to be insured by SSOI.
Ministry of Labor and Social Affairs and SSOI signed a memorandum of understanding to provide redundancy (unemployment) insurance for contractual workers in May.
Speaking at a nationwide gathering on redundancy insurance in Shiraz, Fars province, former managing director of SSOI, Davoud Madadi further noted that coordination has been made with Bank Refah Kargaran to provide 100-million-rial loan to employees who hire those receiving unemployment benefits from the organization.

Turkmen Air Link Resumes
Mashhad-Ashkhabad flight has re-established after a six-year hiatus.
An Iranian aircraft belonging to Taban Airline landed in Ashkhabad Airport on Friday re-establishing the air link between Turkmenistan and Iran after an interval of six years.
A representative of Taban Airline in Ashkhabad Airport, Hossein Abdolahpour said that based on the agreement signed with the Turkmen government, the airline will operate one Mashhad-Ashkhabad return flight each Friday, reported IRNA.
He added that Ashkhabad-Mashhad flight will be changed to Ashkhabad-Mashhad-Tehran flight in the future.
The official noted that at present the airline operates charter flights to Ashkhabad, adding it would become a commercial flight with the increase in the number of passengers.
Return fare between Mashhad and Ashkhabad costs $150. In the past, businessmen, Iranians residing Turkmenistan and Turkmen nationals had to use Ashkhabad-Dubai-Tehran route to visit Iran.
Iran’s Ambassador to Ashkhabad Mohammad Reza Forqani announced in March that Iran-Turkmenistan direct flight would be launched within two months (May).
Resumption of flight was however delayed due to preparations needed for the plan.
The envoy also said that the diplomatic apparatus of Tehran and Ashkhabad would exert efforts to boost bilateral trade between the two Persian-speaking countries which exceeds $1.2 billion per annum.