Zanganeh, Iran's Mountain-Climbing Oil Minister
By Peg Mackey
DUBAI, Aug 12 (Reuters) - Iran's Bijan Zanganeh, reappointed oil minister in a cabinet reshuffle on Sunday, is living proof that actions speak louder than words.
In his four years as minister, the quiet go-getter has lured billions of dollars in big name foreign investment into Iran's vast oil and gas sector and radically restructured a chaotic state oil company.
Trumping that would be a tall order for just about anyone, even for a 49-year-old minister who climbs mountains when not behind his desk.
But the strong-willed engineer is sure to rise to the challenge if Parliament confirms his appointment to a second term. There are some critics in the assembly, but the vast majority is likely to approve the minister's return to office.
Zanganeh, backed by reform-minded President Mohammad Khatami, has already dodged the daggers of foes who charged that awarding buy-back contracts for oil and gas deals was corrupt.
The minister is insulated from real hostility due to Supreme Leader Ayatollah Khamenei, who is strongly supportive of him.
Indeed, there never seems to have been any real threat to Zanganeh's position as oil minister of Iran, the Organisation of the Petroleum Exporting Countries' second largest producer.
If anything, he was more likely to be kicked upstairs to the post of vice-president.
"Zanganeh is very sharp," said a former Tehran University classmate. "Nothing needs to be explained twice. He understands straight away and reacts."
Features not lost on Western oil officials, who also sing the praises of the gentleman from Kermanshah.
"He knows what he wants and he gets it," said a senior Western oil executive. "And he's well-liked by foreign oil companies because he delivers what he promises."
That quality is a key to his success in Iran's upstream, where he aims to develop the country's gas reserves, the world's second largest, and lift oil output capacity from roughly four million barrels per day (bpd) to five million bpd in four years.
GOOD ON HIS WORD
One of his crowning achievements has been to entice more foreign oil majors into Iran - securing over $10 billion in the process - using buy-back deals as a vehicle.
Royal Dutch/Shell, TotalFinaElf and ENI have inked buy-backs, where an investing firm recoups its capital expenditure and makes a profit by receiving payment from part of the project's output.
They, as well as BP, are also in the running for more big ticket items.
The foreign investments have piled up despite the threat of punitive U.S. trade sanctions and internal criticism of contract terms, which Zanganeh fine-tuned late last year to make more palatable to domestic adversaries.
Once re-installed, the buy-back process is likely to gain pace - especially as the minister is viewed as a man of action.
"Zanganeh is very sure of his credentials and likes to get the job done," said an Iranian analyst. "He is not averse to taking bold action."
Western oil companies are hoping that action extends to evolving buy-back terms to allow a long-term relationship to blossom between Iran and foreign oil.
EFFICIENCY DRIVE
Zanganeh's most daring move on the domestic front has been to set about transforming the unwieldy National Iranian Oil Company (NIOC) into a world class oil company modelled along the lines of Shell and BP.
"Zanganeh had the courage to restructure NIOC despite resistance from within," said an Iranian government source. "Bureaucracy and inefficiency were killing the system."
But that's not just the view from inside. Western oil executives agree.
"Against all odds, Zanganeh has been able to introduce some patterns of modernisation and destroy some of the old fiefdoms in NIOC," said a Western oil company source.
"It's much easier dealing with the NIOC of today."
Nonetheless, NIOC is still a far cry from Shell, BP or even state-owned Saudi Aramco, Western industry officials said.
"The shape is there for NIOC to be efficient, but the mentality, save for a few people, is not," said one.
Zanganeh's main task will now be to build an effective team.
"There is some shortage of good manpower," said an Iranian industry source. "We need more people who were brought up in the oil and gas sector."
Some are banking on Zanganeh to make swift changes once he receives his mandate.
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