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Global Business

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The Economic Times, Mumbai, Saturday, 16 January 2016

NEWSMAKERS

Post sanctions, can Elham Hassanzadeh

Bowie Poised to
Dethrone Adele on
Album Sales Charts

get Irans oil flowing again?

THE WOMAN SHAPING

IRANS OIL FUTURE


A
Peter Waldman

t 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 womens fashions
tight robes, exposed calves,
headscarves that barely conceal blond and
henna-coloured 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 PhD in the UK
on scholarships. She literally wrote the book
on Irans natural gas industry since the 1979
Islamic revolutionit 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, thats
at the vanguard of Irans 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 Irans 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 Hassanzadehs dinner companions, BM
Hazrati. Hes the managing director of Arsa
International Construction and head of a contractors trade group. Unfortunately, theyre
still looking at us like its 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
shes 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 countrys 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 US law by
merely discussing business with an Iranian,
so Hassanzadeh names no names as she shares
what shes learned: Significant western involvement in Irans oil sector is at least 18 to 24 months
away, maybe much more. Prospective partners
dont trust the project information theyre getting out of Tehran, she says, and the big banks
and investment funds still need a clear green
light from the US department of the treasury

Hassanzadeh is building a business by parlaying


a deep knowledge of Irans 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
before committing money to Iran. For them,
Iranian stability is still questioned, she says.
What happens in two years if [reformist
President Hassan] Rouhani isnt re-elected?
The dour assessment rankles Hassanzadehs
other guest, Mehrdad Motarjemi, managing
director of Gamma, a Tehran company that recently completed Irans biggest natural gas production unit 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
US president?
The conversation shifts to another debate raging inside Irans oil industrybetween those
who argue that Phase 12 and other achievements
during the four years of global sanctions prove
Iran doesnt 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 cant imagine how difficult it was, he says. Banks in Dubai and Asia
charged usurious rates to move Iranian money.
western suppliers labelled random components
such as piping and valves dual usethat is,
applicable in military or nuclear technology

and wouldnt 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.
Ive seen how management functions much
better when theres 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 months 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 tantalised
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 Irans 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 ones 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, hes 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 hes backed in the past. But just to talk to me
about Iran, he had to insist his firms name not
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. This is a worthy cause, he says,
but to me it comes at a cost.
Betanabhatlas bigger problem, he says, is
that information on Irans 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 white-shoe lawyersamong them
Amir Ghavi at Willkie Farr & Gallagher in
New Yorkas well as the CEO of a giant commodities trader in Switzerland and the head
of development for one of Europes biggest oil
producers.
Hassanzadeh became fascinated with energy
while earning her bachelors degree in law
at Islamic Azad University in Tehran under
Hassan Sedigh, one of Irans 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 masters 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, Hassanzadehs 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 isnt like
anything anyones ever seen before.
I needed to break that boundary, to get into
an arena where men have always been and continue to enforce their dominance
In terms of shock value, its not only that
Hassanzadeh is a woman in the largely male
world of oil and gas. Its what she says. To her
Iranian clientsCEOs her fathers age, desperate to nail down foreign partners after sanctions
are liftedHassanzadeh tells them theyre 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 dont come from these types of semicolonial relationships prevalent elsewhere in
the Middle East, she says.
Bloomberg Businessweek

Musks SpaceX, Orbital ATK Split


$14-Billion Pact with Newcomer

JULIE JOHNSSON & DANA HULL

Elon Musk faces a fresh challenge from a


newcomer with a reusable spacecraft after Nasa split a cargo pact valued at as
much as $14 billion between his SpaceX
venture, Orbital ATK and lesser-known
Sierra Nevada Corp.
SpaceX and Sierra Nevada are at the vanguard of companies seeking to reuse expensive craft to squeeze costs so spaceflight becomes more affordable for
consumers. Sierra Nevada is designing a
winged orbiter called Dream Chaser that
would touch down on commercial runways following missions while SpaceXs
Dragon capsule aims within a few years to
touch down upright on land rather than
splashing in oceans.
Space innovation by private companies
rather than governments has been an
Obama administration goal. The latest arrangement covers missions to the orbiting
lab over a six-year span starting in late
2019, the National Aeronautics and Space
Administration said on Thursday. The
awards come as the space agency works to
foster commercial missions and Congress
clamours to end US dependence on imported rocket engines.
Todays announcement is a big deal that
will move the presidents vision further
into the future, Nasa administrator
Charles Bolden said in a statement.
Total value of the contracts will depend
on the types of missions ordered, but will
probably fall well short of the maximum,
Kirk Shireman, program manager for the
International Space Station, said at a press
conference at the Johnson Space Center in
Houston. Each supplier will fly a minimum of six missions.
Sierra Nevadas Dream Chaser stands to
gain prominence with the contract while
providing a new twist on the concept of
reusable spacecraft championed by Musk.
SpaceX successfully flew a 14-story rocket
booster from the edge of space to a Florida
launching pad in December and has designed similar vertical landing technology for its Dragon capsules.

File photo of the first


stage of the SpaceX
Falcon 9 rocket
returning to land at
Cape Canaveral Air
Force Station in Florida
Below: Elon Musk

Shaped like a smaller cousin to the space


shuttle, the cargo version of the Dream
Chaser will have foldable wings that enable it to blast off atop a rocket while protected by standard launch fairings. Thats
the hardened shell that drops away when
the vehicle reaches space. Unlike the shuttle, Sierra Nevadas craft is made of nontoxic materials that would allow it to touch
down from space missions on standard
commercial runways. The Dream Chaser
would make it easier for scientists to speed
sensitive research samples to Earth since
its re-entry would be at an angle where
theres less wear and tear from gravitational forces than there is on capsules, said
Julie Robinson, the stations chief scientist. Sierra Nevada, based outside of Reno,
Nevada, is owned by Fatih and Eren
Ozmen, Turkish-American husband and
wife entrepreneurs who purchased the
company in 1994.
It also bid to provide the first commercial
manned flights to the space station, but fell

short to Boeing and SpaceX in late 2014.


SNC is honoured to be selected by Nasa
for this critical US programme, said Eren
Ozmen, president of Sierra Nevada. She
said the company looks forward to successfully demonstrating the extensive ca-

pabilities of the Dream Chaser spacecraft


to the world.
SpaceX offered the only made-in-theUSA entry in a three-way derby with
Orbital and Sierra Nevada, both of which
rely to some extent on rockets with
Russian propulsion. Proposals by traditional space powers Boeing and Lockheed
Martin were eliminated earlier in the
competition. Nasa split the initial $3.6-billion cargo-flight contract between SpaceX
and Orbital in 2008, two years after Musks
Space Exploration Technologies sent its
first rocket aloft. The victory helped establish SpaceX as a competitor to United
Launch Alliance, the Boeing-Lockheed
rocket venture that has dominated military missions for the past decade.
Adding a third contractor gives Nasa
greater protection against disaster.
SpaceX and Orbital each halted operations after losing rockets on cargo missions. An October 2014 explosion just after
liftoff destroyed an Orbital Antares rocket
laden with space station cargo. In June, a
SpaceX Falcon 9 blew up minutes into
flight to the orbiting lab.
The stations reliance on Russian and
Japanese spacecraft while the US craft
were grounded highlights the immediate
and urgent need for appropriate oversight
and corrective action, Republican senators Cory Gardner of Colorado and David
Vitter of Louisiana said in a September 1
l e t t e r u r g i n g t h e G ove r n m e n t
Accountability Office to review Nasas
contracted launch services and capsules.
Although SpaceX restarted commercial
flights in December, it has yet to resume
cargo missions under the Nasa award.
Orbital sent a supply capsule to the station
last month atop a United Launch Alliance
rocket. Orbital is dependent on its competitors Atlas V rockets while it builds an
upgraded version of the Antares craft that
exploded. It makes sense to have three
providers, said Shireman. We picked
Sierra Nevada because they had a great
Bloomberg
proposal.

The Economic Times, Pune, January 16, 2016 Pp.9

Crossword

Dilbert

David Bowies Blackstar, released days


before his death, is on track to knock
Adeles 25 out of the top spot on the
Billboard 200. It would be the rst No. 1
album in the US for the British pop star.
Sales of Blackstar increased 10-fold after
Bowie died on Sunday at the age of 69,
surpassing 120,000 through Tuesday,
according to data from Nielsen Music.
Digital sales account for 70% of those
purchases, Nielsen said. Adele sold
163,792 copies of her album last week, her
seventh at No. 1. Her record-breaking 25
made its debut in November. Bloomberg

Facebooks COO
Gives $31 Million in
Stock to Charity
Facebook COO Sheryl Sandberg has
donated $31 million in Facebook stock to
charity, days after her boss Mark
Zuckerberg pledged to give away 99% of
his company shares. Sandberg, 46,
donated 290,000 shares of Facebook stock
at a market value of roughly $31 million
to various charities, according to a Securities and Exchange Commission
document. The shares are now in the Sheryl Sandberg Philanthropy
Fund, a donor-advised fund. Much of the money will go to causes that
Sandberg has supported in the past. PTI

Netflix to Stop
Customers from
Bypassing Country
Restrictions

A Terrorist Killed
Her Husband,
and now shes
Suing Twitter

American multinational provider


of on-demand Internet streaming
media Netflix announced on
Friday that it will be taking new
steps to stop customers from
streaming content thats only
available outside their own
country. The companys vice
president of content delivery
architecture, David Fullagar, was
quoted by The Verge, as saying
that customers using proxies and
un-blockers will only be able to
access the service in the country
in which they reside. In the blog
post, Fullagar also said that he
was condent that the change in
policy at Netix would not impact
members who were not using
proxies. ANI

An American widow of a man,


who was killed in Jordanian
police training centre, has led
a lawsuit against Twitter for
allowing the Islamic State to
spread propaganda. According
to The Guardian, Tamara
Fields, a woman from Florida,
whose husband Lloyd died in
th e N ove mb e r 9 at t a ck ,
accused Twitter of having
knowingly let the militant
Islamist group use its network
to spread propaganda and
attract recruits. She said the
San Francisco-based company
had until recently given ISIS an
unfet tered abilit y to
maintain of ficial Twit ter
accounts. ANI

Most-Luminous,
16km Wide
Supernova
Discovered
A team of astronomers
has discovered the
most-luminous, 16km
wide supernova that is
200 times more
powerful than the average supernova, 570 billion times brighter
than our sun and 20 times brighter than all the stars in our Milky
Way combined. Called ASAS-SN-15lh, the newly found superluminous supernova, situated 3.8 billion light years away, was
discovered by the All Sky Automated Survey for SuperNovae
team (ASAS-SN), an international collaboration headquartered
at the Ohio State University. It uses a network of 14-cm
telescopes around the world to scan the visible sky every two
or three nights looking for very bright supernovae. Supernovae
are violent stellar explosions and some of the brightest objects
in the universe. Human records noting their existence date back
nearly 2,000 years. PTI

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by S Adams