Right Man in the Right Place

Iran’s longest-serving minister, Bijan Namdar Zanganeh, is again tapped for the Oil Ministry under Hassan Rouhani’s second term as president and is widely expected to win the parliament’s vote of confidence with consummate ease.

The 64-year-old veteran is too old for the job, critics argue, but his track-record puts those voices to rest.

Zanganeh has served in top ministerial and administrative positions for nearly 30 years: three terms as oil minister, two terms as energy minister and two terms at the head of the Construction Jihad, an organization formed after the Iraq-Iran war in 1980s to rebuild Iran’s roads and infrastructure, including oil production and export facilities—the country’s main economic artery.

Mathematically speaking, Zanganeh has held a ministerial post or similar positions over 40% of his life.  

Beyond the raw numbers, Zanganeh deserves particular recognition for his accomplishments in the last four years. He became oil minister in August 2013 under Rouhani's first term as president, when the Iranian economy was hobbled by sanctions, international energy companies had ceased operations and Tehran had lost its place as OPEC's second-largest producers, slipping to sixth place.

But Zanganeh played a seminal role in Iran's economic recovery under Rouhani, a centrist whose administration negotiated the removal of nuclear sanctions and favors better ties with the West.

The lifting of sanctions coincided with the collapse of global crude prices. In January 2016, the same month as sanctions against Tehran were lifted, oil plunged to $27 a barrel, the lowest since 2003. The quandary prompted oil nations to scale back production to help lift the sagging prices and make efforts to stabilize the precarious market.

But Zanganeh always insisted that Iran would not accept any ceiling before raising production to the pre-sanctions level of about 4 million barrels a day.

And he stood by his words: through the emergency meeting of OPEC and non-OPEC countries in April (the first such meeting in 30 years), through an OPEC meeting in June in which Saudis pulled out of talks to force Iran to accept cuts and right up to a November 30 meeting in Vienna where the 13-member organization announced a rare cutback agreement, exempting Iran from any cuts.

Zanganeh's persistence on regaining the lost ground helped Iran move out of the shadow and into the spotlight of the global oil market.

He has spearheaded the development of Iran's gas sector. Under his watch, the development of South Pars, a huge reservoir shared between Iran and Qatar, gained momentum in the past four years, with production reaching close to 600 million cubic meters a day from less than half in 2013.

Zanganeh prepared the ground for a new model of oil and gas contract to lure back foreign investors despite facing relentless criticism from opponents of Rouhani and his administration over the terms of the contracts.

Last month, French heavyweight Total S.A. signed a milestone deal within the framework of Iran Petroleum Contract to develop Phase 11 of South Pars.

The agreement marked the first collaboration of Iran with a major western company in years and served as a reminder of just how far the country has come to emerge as an attractive investment hub from an isolated Middle Eastern economy.

Zanganeh has repeatedly said Iran needs to invest $200 billion in its petroleum and petrochemical industries, while stressing that most of the finance should come from foreign sources. He said crude production will rise by nearly 1 million barrels per day in four years and gas production to more than 1 billion cubic meters a day.

Through thick and thin, Zanganeh has proven equal to his task and lived up to his commitments.

Iran's energy industry is undergoing a renaissance and Zanganeh is the right man to steer the Oil Ministry's ship toward greater success over the next four years.