TEHRAN, Sept 18 Iran's president said on
Thursday a contract to sell gas to Crescent Petroleum of the
United Arab Emirates was based on an unacceptably low price and
the deal had been tarnished by corruption.
President Mahmoud Ahmadinejad made the remarks in a news
conference. Other government officials have also criticised the
contract, though not in such strong terms. Interior Minister Ali
Kordan said this week the deal was not in Iran's interest.
Crescent denied any involvement in corruption and said there
was "clearly a misunderstanding".
Iran and Crescent, based in Sharjah in the UAE, have been
locked in negotiations about the price of gas exports from the
Iranian offshore Salman field since 2006. The initial deal was
signed in 2001 when oil prices were a quarter of today's levels.
The deal was to supply of 600 million cubic feet per day.
"This contract ... was struck based on an incorrect
relationship between some politicians that are active today, at
a very low price," Ahmadinejad told the news conference, when
asked about the deal with Crescent.
"This government will not allow even one penny belonging to
this nation to be wasted," the president said.
The deal became controversial in Iran after some politicians
said the export price should be higher. An Iranian daily
reported this week that the price in the Crescent contract was
just 20 percent of that on Iranian gas exports to Turkey.
"The Intelligence Ministry reported to me that behind the
scenes of this contract money has been exchanged," Ahmadinejad
said. He said "bribes" had changed hands and that he had told
the Intelligence Ministry to complete a report on the deal.
He said Kordan and other allies in office had been
criticised but the president described them as "those who
prevented this deal of corruption".
"If they want to buy gas they should buy it at that day's
price but in a clear and clean contract," he said, adding that
neighbouring countries were a priority for gas sales.
CRESCENT SAYS 'MISUNDERSTANDING'
Responding, a Crescent spokesman told Reuters: "There is
clearly a misunderstanding. Crescent Petroleum categorically
denies any allegation of any corrupt practices with regard to
the contract, which was properly negotiated and executed at a
time when energy prices were lower."
Officials have warned Iran may abandon the deal if they are
not satisfied with terms. Oil Minister Gholamhossein Nozari
repeated a threat to use the gas at home if the two sides did
not agree on a "fair" price, a newspaper reported this week.
Despite sitting on the world's second biggest gas reserves,
Iran has been slow to develop exports partly because U.S.
sanctions have hindered access to some technologies.
The UAE, an oil exporter, needs gas from the $1 billion
project to meet domestic demand from industry and power plants.
Crescent's affiliate, Dana Gas DANA.AD, will process and
transport the gas to utilities and industrial users in the UAE.
Experts previously said Iran had yet to complete building
facilities to pump gas to the UAE, while Crescent's offshore
pipeline and processing facilities had long been completed.
(Reporting by Zahra Hosseinian in Tehran and Simon Webb in
Dubai, Writing by Edmund Blair, editing by Anthony Barker)