Iran signs $21B contract with firms linked to Revolutionary Guards

In response to fresh sanctions imposed by the UN Security Council, Iran strengthened the Revolutionary Guards' hold on the local economy.

 

On Tuesday the government in Tehran signed a $21 billion contract with several domestic companies with links to the Revolutionary Guards to develop the giant South Pars gas field.

 

Many international oil companies have been wary about investing in Iran because of the Security Council's sanctions, which are aimed at curbing Iran's nuclear program.

 

At the signing ceremony, President Mahmoud Ahmadinejad said, "Those who imagine that the Iranian

nation needs them ... are wrong."

 

The past few years have seen the elite military unit become a key financial player in the Islamic Republic. Companies belonging to the Revolutionary Guards currently control the local oil, construction and communications sectors.

 

According to reports in Iran, the South Pars project is one of the largest in the world and will take some 35 months to complete. The development of the gas field is expected to create about 50,000 jobs and boost Iran's natural gas output by 7.06 billion cubic feet per day (200 million cubic meters) - an increase of about 30 percent.

 

Iran had signed deals with western countries to develop other phases of South Pars, but rescinded them due to delays caused by the international sanctions.

 

Doron Peskin is head of research at Info-Prod Research (Middle East) Ltd.

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