After Iran and the six world powers signed the nuclear deal last summer, the Iranian Cabinet on Sept. 30 approved the general terms for new upstream oil and gas contracts, known as the Iran Petroleum Contract. The aim? Facilitating the inflow of foreign investment. The Oil Ministry presented the Iran Petroleum Contract to more than 300 major international energy investors at the Nov. 28-29 Tehran Summit. However, it seems that parliament is not yet in full agreement with the general terms of the new oil contract.  

On Jan. 4, Oil Minister Bijan Namdar Zangeneh said that the parliament’s Committee for the Evaluation of Government Acts’ Compliance with the Law had approved the general terms of the Iran Petroleum Contract, and that work related to the contract had therefore been “finalized.” However, two days later, nine members of the parliamentary committee denied that they had evaluated the general terms. Further twisting the situation, the parliamentary committee does not actually have the power to change the legal status of the general terms of the contract, which have already been approved by the Cabinet.

Al-Monitor spoke with Iman Rajabi, a Tehran-based lawyer, to clarify the legal situation. He explained that when parliamentary action on a document can change its legal status, the latter is considered to be a bill submitted by the executive branch. However, the Cabinet-approved general terms of the Iran Petroleum Contract are not a bill in this sense. Rajabi noted that the Cabinet made an executive decision that simply defines the general terms of a future contract to be signed between Iran and a foreign party. Rajabi said, “At this point, the general terms of the [Iran Petroleum Contract] are only an executive decision, and not an international agreement. Only the Court of Administrative Justice can stop it [the general terms of the Iran Petroleum Contract] from developing into a contract.”

Sahar Seyedipour, another lawyer based in Tehran, agrees with Rajabi. She told Al-Monitor that all government organizations must comply with Cabinet decisions. Of note, based on Articles 77 and 125 of the Iranian Constitution, international agreements require parliament’s approval. However, contracts in which one side is a government entity or company and the other side is a privately owned foreign company are not considered international contracts and are therefore not subject to Article 77. Seyedipour told Al-Monitor, “Even if parliament’s Committee for the Evaluation of Government Acts’ Compliance with the Law rejects the general terms of the [Iran Petroleum Contract], this has informative rather than legal value.” But does this stop parliament from criticizing the Cabinet’s decision?