Petro Fixer

El­ham Has­san­zadeh is the per­son to see about Iran’s 158 bil­lion bar­rels of oil

Bloomberg Businessweek (Europe) - - CONTENTS - By Peter Wald­man

At Mon­soon, a bistro in Tehran that serves sushi, Szech­wan beef, and Gouda and cala­mari on whole wheat toast, the fu­sion cui­sine is an act of de­fi­ance. So are the women’s fash­ions—tight robes, ex­posed calves, head­scarves that barely con­ceal blond and henna-col­ored hair­styles. The restau­rant, with its rough con­crete walls, red coun­ter­tops, and stat­ues of Hindu and Bud­dhist god­desses, looks more Man­hat­tan than Is­lamic Re­pub­lic. Seated at a cor­ner ta­ble is El­ham Has­san­zadeh, al­most 6 feet tall, with dark eyes, thick eye­brows, and lush brown hair that over­flows her hi­jab. Her din­ing com­pan­ions are the middle-aged bosses of two large Ira­nian en­gi­neer­ing and con­struc­tion com­pa­nies.

Raised in a pis­ta­chio-farm­ing fam­ily in tra­di­tion-minded south­ern Iran, Has­san­zadeh, 31, earned her law de­gree and Ph.D. in the U.K. on schol­ar­ships. She lit­er­ally wrote the book on Iran’s nat­u­ral gas in­dus­try since the 1979 Is­lamic rev­o­lu­tion—it was pub­lished last year by Ox­ford Univer­sity Press. She has re­turned to Iran to head a con­sult­ing firm, En­ergy Pi­o­neers, based in Tehran and Lon­don, that’s at the van­guard of Iran’s all-out push to lure back for­eign in­vestors af­ter the ex­pected lift­ing of sanc­tions in com­ing months. Iran is count­ing on Western tech­nol­ogy and hop­ing to raise $100 bil­lion in over­seas fi­nanc­ing to dou­ble its oil and gas pro­duc­tion in the next five years. Has­san­zadeh is build­ing a busi­ness by par­lay­ing a deep knowl­edge of Iran’s en­ergy re­sources, close ties to govern­ment tech­nocrats and in­dus­try lead­ers in Tehran, and high-level con­tacts at ma­jor oil com­pa­nies, law firms, and in­vest­ment houses in the West.

Her clients are im­pa­tient. “For­eign com­pa­nies should open of­fices in Tehran im­me­di­ately and buy shares in lo­cal com­pa­nies who can be their agents and help with man­age­ment,” says one of Has­san­zadeh’s din­ner com­pan­ions, B.M. Hazrati. He’s the man­ag­ing di­rec­tor of Arsa In­ter­na­tional Con­struc­tion and head of a con­trac­tors’ trade group. “Un­for­tu­nately, they’re still look­ing at us like it’s 15 years ago.”

“The world has moved on,” Has­san­zadeh says, dis­miss­ing the idea that Western in­vestors, in a mar­ket glut­ted with oil, are ready to rush back to Tehran with­out ex­am­in­ing the fine print. Lately she’s been com­mut­ing be­tween Iran and Europe to speak at trade con­fer­ences and in meet­ings with Western oil ex­ec­u­tives, fund man­agers, bankers, and lawyers about her coun­try’s reemer­gence.

De­spite her age, she cul­ti­vated a wide net­work of in­dus­try play­ers in Europe dur­ing her years at the Ox­ford In­sti­tute for En­ergy Stud­ies. Some of th­ese con­tacts may have skirted U.S. law by merely dis­cussing busi­ness with an Ira­nian, so Has­san­zadeh names no names as she shares what she’s learned: Sig­nif­i­cant Western in­volve­ment in Iran’s oil sec­tor is at least 18 to 24 months away, maybe much more. Prospec­tive part­ners don’t trust the in­for­ma­tion they’re get­ting out of Tehran, she says, and the big banks and in­vest­ment funds “still need a clear green light” from the U.S. Depart­ment of the Trea­sury be­fore com­mit­ting money to Iran. “For them, Ira­nian sta­bil­ity is still ques­tioned,” she says. “What hap­pens in two years if [re­formist Pres­i­dent Has­san] Rouhani isn’t re­elected?”

The dour as­sess­ment ran­kles Has­san­zadeh’s other guest, Mehrdad Mo­tar­jemi, man­ag­ing di­rec­tor of Gamma, a Tehran com­pany that re­cently com­pleted Iran’s big­gest nat­u­ral gas pro­duc­tion com­plex in the Per­sian Gulf, called South Pars Phase 12. “You can al­ways make a long list of what-ifs,” says the sil­ver-haired ex­ec­u­tive, 60, whose smile and soft voice be­lie a snappy dis­po­si­tion. “What if Don­ald Trump be­comes the next U.S. pres­i­dent?”

The con­ver­sa­tion shifts to an­other de­bate rag­ing in­side Iran’s oil in­dus­try— be­tween those who ar­gue that Phase 12 and other achieve­ments dur­ing the four years of global sanc­tions prove Iran doesn’t need for­eign help, and ex­ec­u­tives such as Mo­tar­jemi who say in­ter­na­tional tech­nol­ogy and man­age­ment ex­per­tise are in­dis­pens­able. Phase 12, while hailed in Iran as a tri­umph of self-suf­fi­ciency, cost twice as much as it should have be­cause of sanc­tions, ac­cord­ing to Mo­tar­jemi. “You can’t imag­ine how dif­fi­cult it was,” he says. Banks in Dubai and Asia charged usu­ri­ous rates to move Ira­nian money. Western sup­pli­ers la­beled ran­dom com­po­nents such as pip­ing and valves “dual use”—that is, ap­pli­ca­ble in mil­i­tary or nu­clear tech­nol­ogy—and wouldn’t sell them to Iran. Spare parts never ar­rived for some crit­i­cal com­po­nents such as pumps; a mas­sive com­pres­sor is still on a dock in Dubai, mired in sanc­tions red tape.

“I’ve seen how man­age­ment func­tions much bet­ter when there’s a Euro­pean com­pany work­ing be­side us,” Mo­tar­jemi says over a dessert of fried mango spring rolls with co­conut ice cream. “We want to for­get the past ha­tred, what­ever it was, and start all over again.”

Un­de­terred by this month’s flareup with sec­tar­ian ri­val Saudi Ara­bia across the Per­sian Gulf, Iran is ready to re­build its en­ergy in­dus­try. The West has been sali­vat­ing since the July 2015 break­through on lift­ing the sanc­tions. At a con­fer­ence in Tehran in late Novem­ber, Oil Min­is­ter Bi­jan Nam­dar Zan­ganeh tan­talized more than 300 for­eign en­ergy ex­ec­u­tives with 70 ex­plo­ration and de­vel­op­ment projects up for bid, tar­get­ing $30 bil­lion in new in­vest­ments. Min­istry of­fi­cials are promis­ing bet­ter terms for for­eign pro­duc­ers than found in Iran’s pre­vi­ous oil con­tracts, which al­lot­ted com­pa­nies a fixed fee re­gard­less of how much oil they pro­duced and paid noth­ing to com­pa­nies that spent more than was bud­geted to de­velop a field. The new con­tracts will be valid for as long as 25 years, com­pared with seven be­fore. Iran, which says it will dis­close more de­tails in Fe­bru­ary, wants to sign its first deal as soon as this spring.

“How of­ten in one’s life­time does a hy­dro­car­bon su­per­power re­open for busi­ness?” says Ganesh Be­tan­ab­hatla, a Hous­ton-based pri­vate equity in­vestor in oil and gas deals. As an Amer­i­can, he’s on a lonely quest to in­vest in ex­plo­ration and pro­duc­tion op­por­tu­ni­ties in Iran af­ter sanc­tions are fully lifted, via plays by some of the mid­size Amer­i­can oil pro­duc­ers he’s backed in the past. But he was only will­ing to talk about Iran if his firm’s name didn’t ap­pear in this ar­ti­cle. And as a big sup­porter of Jeb Bush and as na­tional vice chair­man of Mav­er­ick PAC, a fundrais­ing group of wealthy Repub­li­cans younger than 40, Be­tan­ab­hatla, 30, has en­dured taunts from GOP friends about his Iran pur­suit. (That at­ti­tude isn’t chang­ing, es­pe­cially af­ter Iran briefly held U.S. sailors who had strayed into its wa­ters on Jan. 12.) “This is a wor­thy cause,” he says, “but to me it comes at a cost.”

Be­tan­ab­hatla’s big­ger prob­lem, he says, is that in­for­ma­tion on Iran’s vast hy­dro­car­bon de­posits is sketchy and scarce: “No one in the in­de­pen­dent ex­plo­ration and pro­duc­tion world has set foot there in 36 years.” Has­san­zadeh has helped Be­tan­ab­hatla with re­search, and her net­work has ar­ranged meet­ings for him with Ira­nian of­fi­cials in New York and Europe. Her cir­cle of sources in­cludes a pair of thir­tysome­thing whiteshoe lawyers—among them Amir Ghavi at Wil­lkie Farr & Gal­lagher in

York—as well as the CEO of a gi­ant com­modi­ties trader in Switzer­land and the head of de­vel­op­ment for one of Europe’s big­gest oil pro­duc­ers.

Has­san­zadeh be­came fas­ci­nated with en­ergy while earn­ing her bach­e­lor’s de­gree in law at Is­lamic Azad Univer­sity in Tehran un­der Has­san Sedigh, one of Iran’s lead­ing oil and gas at­tor­neys. She also in­terned in his law of­fice, where she worked with ex­ec­u­tives at big oil com­pa­nies from all over the world. The ex­pe­ri­ence even­tu­ally helped win her a schol­ar­ship from Royal Dutch Shell to pur­sue a mas­ter’s de­gree in law at the Univer­sity of Cam­bridge in Eng­land in 2008 and 2009. “Peo­ple are re­ally in­trigued by her, es­pe­cially in the West,” says Jonathan Stern, Has­san­zadeh’s dis­ser­ta­tion ad­viser and the founder and chair­man of the Ox­ford In­sti­tute for En­ergy Stud­ies’ nat­u­ral gas re­search pro­gram. “A young Ira­nian woman with great English skills, an aca­demic back­ground, real-world ex­pe­ri­ence, and a law de­gree isn’t like any­thing any­one’s ever seen be­fore.”

In terms of shock value, it’s not only that Has­san­zadeh is a woman in the largely male world of oil and gas. It’s what she says. To her Ira­nian clients— CEOs her father’s age, des­per­ate to nail down for­eign part­ners af­ter sanc­tions are lifted—Has­san­zadeh tells them they’re not ready. Sure, well-con­nected Ira­nian com­pa­nies can take small stakes in oil ex­plo­ration and de­vel­op­ment deals, cede op­er­a­tional con­trol to in­ter­na­tional oil com­pa­nies, and sit back and col­lect div­i­dends if the projects pay off. But Iran needs tech­nol­ogy, know-how, and good jobs, and such things don’t come from th­ese types of “semi­colo­nial” re­la­tion­ships preva­lent else­where in the Middle East, she says.

For Western com­pa­nies to make joint ven­tures with Ira­nian part­ners on more equal terms, Iran must first build an “in­vest­ment in­fra­struc­ture” of in­de­pen­dent au­di­tors, lawyers, con­sul­tants, and courts that for­eign­ers can trust, Has­san­zadeh says. This takes time and a so­ci­etal com­mit­ment to the rule of law. As of now, Iran doesn’t even have a re­li­able credit ref­er­ence sys­tem.

“We’re try­ing to build this foun­da­tion,” she says. “We’re telling peo­ple, ‘Calm down, re­lax, there’s enough food for ev­ery­one. Don’t do any­thing now you’ll re­gret later.’ ”

To po­ten­tial Western in­vestors, just as ea­ger as Ira­ni­ans to es­tab­lish ties, she coun­sels pa­tience. Her book, Iran’s Nat­u­ral Gas In­dus­try in the Post-Revo­lu­tion­ary Pe­riod—Op­ti­mism, Skep­ti­cism, and Po­ten­tial, has a whole chap­ter on cor­rup­tion and Iran’s need for le­gal re­form. It was a hit with lead­ers at many of the big Euro­pean oil com­pa­nies that un­der­write the Ox­ford In­sti­tute for En­ergy Stud­ies, ac­cord­ing to the in­sti­tute’s Howard Rogers, who spent 29 years with BP. The pow­er­ful re­search cen­ter is the lo­cus of her in­flu­ence out­side Iran. Af­ter her book came out, she gained for­eign­ers’ re­spect for hav­ing a cleareyed view of Iran’s prob­lems, and for not sim­ply try­ing to earn a quick com­mis­sion as a mid­dle­man. “El­ham’s per­spec­tive is not one of un­al­loyed op­ti­mism,” Rogers says. “She has a re­al­is­tic busi­ness sense of the chal­lenges ahead.”

While gray­beards in tur­bans gen­er­ate most of the head­lines, it’s the young who are driv­ing Iran’s reen­gage­ment with the West. Two-thirds of the na­tion’s 78 mil­lion peo­ple are un­der 35; al­most 60 per­cent of high school grad­u­ates at­tend col­lege, roughly the same rate as in Bri­tain and France. The de­mand for jobs and a sense of nor­malcy by this ed­u­cated de­mo­graphic bulge is the gravest longterm threat to the Is­lamic regime—and its great­est hu­man as­set, Has­san­zadeh says.

Zan­ganeh, the oil min­is­ter, a no-non­sense tech­no­crat, has sur­rounded him­self with rel­a­tively young staffers in their 20s and 30s. They’re linked to for­mer pro­fes­sors, class­mates, and friends through­out the vast Ira­nian di­as­pora.

An­other point of ten­sion: While women now make up more than 60 per­cent of the na­tion’s col­lege stu­dents, they’re only 18 per­cent of its work­force. Education is cher­ished in Iran, but mar­riage and stay-at-home moth­er­hood are pushed even harder, par­tic­u­larly by hus­bands. Has­san­zadeh, who is sin­gle, says the worst dis­crim­i­na­tion she’s felt came from flirty se­nior ex­ec­u­tives at meet­ings “who think be­cause you’re a woman you should be open” to their sex­ual ad­vances. But they’re the ex­cep­tion, she says, with most male oil ex­ec­u­tives go­ing out of their way to be help­ful. “It’s al­ways like, ‘We can’t re­ally be­lieve a woman could get to your level of be­ing so out­spo­ken,’ ” she says.

At a morn­ing meet­ing in Oc­to­ber at Nam­varan, a large pe­tro­leum en­gi­neer­ing com­pany, Has­san­zadeh and the di­rec­tor of busi­ness de­vel­op­ment, Pari­naz Tah­baz, are treated to a rare event in the Middle East: The two fe­male ex­ec­u­tives are served by a middle-aged of­fice tea man. Tah­baz was one of four women to grad­u­ate with an en­gi­neer­ing de­gree from Tehran Univer­sity in 1996, along with 78 men. Now 70 per­cent of Ira­nian sci­ence grad­u­ates are women, she says. When she joined Nam­varan the year she fin­ished school, 2 out of 40 en­gi­neers in her depart­ment were women. To­day 45 per­cent of the staff at the com­pany is fe­male, and Tah­baz is the first woman among Nam­varan’s five share­hold­ers and mem­bers of the board. To earn the trust of the men, she had to work 14-hour days, spend long stretches on the road at job sites, and for­get about hav­ing chil­dren, she says. “My hus­band knows Nam­varan is my first fam­ily.”

Has­san­zadeh hasn’t de­cided if she’ll have a fam­ily. Ira­nian men aren’t in­ter­ested in mar­ry­ing women who are well ed­u­cated and fi­nan­cially in­de­pen­dent, she says—“How are they sup­posed to con­trol you?” Women ei­ther need to get mar­ried when they’re 17, “be­fore you’re too in­tim­i­dat­ing,” or for­get about their ca­reers, she says. Has­san­zadeh knew she wanted to get her Ph.D. be­fore set­tling down. “I’ve been told if I meet a man I like, just don’t tell him what I do,” she says.

Has­san­zadeh likes beat­ing men at their own game. “I needed to break that bound­ary, to get into an arena where men have al­ways been and con­tinue to en­force their dom­i­nance,” she wrote in an e-mail. “I love the power/ec­stasy/ ex­cite­ment which this sec­tor of­fers me as a woman to fight head-to-head with men— that ex­act mo­ment when you’ve not only crossed the bound­aries, but have placed your­self ahead of men, that ex­act mo­ment

when you’re the only fe­male pan­elist on a high-cal­iber panel of seven or eight men and they all re­main silent and im­pressed by your in­sight.”

When she first moved to Cam­bridge to earn her mas­ter’s de­gree, Has­san­zadeh made fast friends with the Amer­i­can stu­dents—“the Brits kept bound­aries,” she says. She vis­ited the U.S. for the first and only time in De­cem­ber 2007. What was sup­posed to be a two-month trip, how­ever, lasted only 10 days. Trav­el­ing alone through Wash­ing­ton Dulles In­ter­na­tional Air­port, Has­san­zadeh, then 23, was culled from a se­cu­rity line and di­rected into a sec­ondary screen­ing de­vice called a puffer ma­chine. The air blast lifted her shirt. Has­san­zadeh pan­icked in­side the glass cham­ber. A Trans­porta­tion Se­cu­rity Ad­min­is­tra­tion su­per­vi­sor, try­ing to calm her down, be­came overly friendly, she says. “That’s how you treat a young woman who has no idea what’s go­ing on?” she asks. “You flirt with her?” She ended the trip af­ter an­other ver­bal en­counter with some horny male rev­el­ers on New Year’s Eve in Times Square. “I never wanted to go back to the States again,” she says.

Af­ter earn­ing her mas­ter’s at Cam­bridge, Has­san­zadeh, then 25, was ap­pointed the youngest law lec­turer ever at her alma mater in Tehran. At that point, con­ser­va­tive Pres­i­dent Mah­moud Ah­madine­jad was at the height of his power; he and Supreme Leader Ay­a­tol­lah Ali Khamenei crushed the Green Rev­o­lu­tion pro­test­ers in 2009 with ba­ton-wield­ing mili­ti­a­men and mass ar­rests of demo­cratic ac­tivists. Has­san­zadeh avoided dis­cussing pol­i­tics in the class­room, aware she was un­der spe­cial scru­tiny for hav­ing lived in the West. She wouldn’t play fa­vorites, ei­ther. She helped ar­range an in­tern­ship at the cham­ber of com­merce for the stu­dious son of a com­man­der of the Basij, or Is­lamic mili­tia. But she flunked the slacker son of an­other mil­i­tant fam­ily, who then threat­ened to re­port her as a sub­ver­sive to the univer­sity’s in­tel­li­gence branch if she didn’t change his grade. She kicked him out of class and no­ti­fied cam­pus po­lice.

An in­tel­li­gence of­fi­cer sum­moned Has­san­zadeh for ques­tion­ing. He said she’d been ac­cused of speak­ing against the Is­lamic regime and pre­sented her with a thick file on her trav­els the past five years. “Why’d you leave Iran so of­ten?” he asked. She told him about her grad­u­ate stud­ies and the abortive U.S. trip and turned over au­dio record­ings of all her univer­sity lec­tures, which she’d as­sid­u­ously taped for just such an in­quiry. Her ac­cuser was ul­ti­mately ex­pelled. Has­san­zadeh re­ceived a for­mal apol­ogy from the in­tel­li­gence of­fi­cer, ex­press­ing his fer­vent hope that she’d stay in Iran to con­tinue serv­ing the peo­ple.

She bolted for Ox­ford. “Ah­madine­jad’s re­elec­tion was like a heart at­tack,” she says. “Ev­ery­thing col­lapsed, and ev­ery­body was sus­pect­ing each other. I said, ‘I’m leav­ing.’ ”

The tim­ing was per­fect. When Has­san­zadeh fin­ished her en­ergy dis­ser­ta­tion in 2013, Rouhani was as­sum­ing the pres­i­dency. Fed up with “big-mouth” Ira­ni­ans abroad who rant about the regime but won’t go home to help, Has­san­zadeh re­turned to Tehran to start En­ergy Pi­o­neers. Her co-founder, Nima Fateh, 44, had been a se­nior ad­viser to Mo­hammed Khatami, the re­formist for­mer pres­i­dent.

A lot of their work is as­sist­ing Ira­nian com­pa­nies with pre­par­ing fi­nan­cial doc­u­ments and fea­si­bil­ity stud­ies that Western in­vestors can trust and un­der­stand. The Saudi ten­sions haven’t hurt, so far. Euro­pean com­pa­nies con­tinue reach­ing out for help, she says. Both sides re­main be­wil­dered. “They’re both speak­ing English, but from two dif­fer­ent plan­ets,” she says. Many of her Ira­nian clients, for ex­am­ple, as­sume that af­ter sanc­tions they’ll be able to gain ac­cess to over­seas funds for pe­tro­leum projects at roughly the same risk pre­mium they paid be­fore the Ah­madine­jad ten­ure 15 years ago. Iran, af­ter all, is a bas­tion of sta­bil­ity com­pared with the rest of the Middle East, they say. If the risk pre­mium back then was 2 to 4, mean­ing Ira­ni­ans could bor­row money for projects at a bench­mark in­ter­est rate plus 2 to 4 per­cent­age points, “it’s now above 10,” Has­san­zadeh says, cit­ing a re­cent con­ver­sa­tion with an in­vest­ment banker in Lon­don. “I’m telling clients, ‘Guys, don’t be delu­sional!’ ”

Has­san­zadeh’s most ad­vanced pro­ject is an enor­mous com­plex of nat­u­ral gas re­finer­ies that’s planned to be the largest in the world. Lo­cated in the an­cient port vil­lage of Si­raf on the Per­sian Gulf, the pro­ject con­sists of eight in­ter­linked re­finer­ies, to be built and owned by eight pri­vate com­pa­nies with in­vest­ments of $350 mil­lion each. The govern­ment is pro­vid­ing the gas from the South Pars field and pitch­ing in about $1 bil­lion of in­fra­struc­ture. Three of the com­pa­nies have hired Has­san­zadeh to seek out for­eign part­ners.

She wants to sign on more clients, which is what brings her to tea with Pari­naz Tah­baz at Nam­varan. The pe­tro­leum en­gi­neer­ing com­pany in Tehran is one of eight com­pa­nies des­ig­nated by the govern­ment to de­velop Si­raf. As the cups are cleared away by the tea man, Has­san­zadeh and Tah­baz com­mis­er­ate about the need to re­build Iran’s im­age. Has­san­zadeh de­scribes her “near panic” read­ing through one of her Si­raf client’s fea­si­bil­ity stud­ies be­fore meet­ing prospec­tive for­eign in­vestors. “They were in­com­plete, bi­ased, and not pro­fes­sion­ally pre­pared,” she says.

Tah­baz says Nam­varan isn’t ready to hire out­side ex­perts for help yet. Her com­pany first wants to nar­row its list of po­ten­tial for­eign part­ners. Amer­i­can com­pa­nies in par­tic­u­lar are be­gin­ning to reach out to the com­pany through third par­ties, ex­press­ing “even stronger in­ter­est than the oth­ers be­cause this is an un­touched mar­ket for them with huge op­por­tu­ni­ties,” Tah­baz says. “It may take some time, but peo­ple will un­der­stand that Iran is a coun­try they can bank on.”

Has­san­zadeh agrees, but says fi­nanc­ing is more likely to come from Ja­pan, Korea, and China than Europe or the U.S. Still, she says that, in spite of her un­happy New Year in Amer­ica, she knows how much Ira­ni­ans love Amer­i­can tech­nol­ogy and pre­fer U.S. goods over prod­ucts from Europe and Ja­pan. Within a few years, she says, even Amer­i­can oil pro­duc­ers will be back in Iran, where they’ll be wel­comed with open arms. “They’ll get pri­or­ity over ev­ery­one else.” <BW>

Newspapers in English

Newspapers from Bahrain

© PressReader. All rights reserved.