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There are 7 messages totalling 583 lines in this issue.

Topics of the day:

1. Iran's Weomen Show Poltical Muscle
2. UNESCO Congratulates Khatami on Successful Electio
3. West Must End Iran Isolation, Italy Says.
4. U.S Oil Companies Press U.S for Iran Access.
5. Iran/Iraq Oil Investment Risks Abound, Analysts Sa
6. N.J Executive Pleads Guilty to Iran Arms Scheme
7. Iran Says Khatami to Discuss Oil Deals in Italy


Date: Thu, 4 Mar 1999 10:33:38 EDT
From: Bobby Iri <Bobby@WWW.DCI.CO.IR>
Subject: Iran's Weomen Show Poltical Muscle

Iran's women show political muscle

BBC World: Middle East
Wednesday, March 3, 1999 Published at 02:33 GMT

Iranian President Mohammad Khatami's eldest sister was among the
winners as moderate and female candidates performed well in the
first nationwide local elections since the revolution.
In a major blow to the conservative clerical establishment
Iranian reformists look certain to seize control of Tehran's
city council.

Partial results give supporters of moderate President Mohammad
Khatami at least 12 of the 15 seats, with independents likely to
get the other three seats.

Results in several thousand small towns and villages have been
published, but officials say those for the big cities will take
several days.

In the central desert town of Ardakan, the president's hometown,
his sister Fatemeh Khatami, 61, came top in her contest winning
15,600 votes with the next candidate winning about 6,000 votes.

"All I can say is that I hope I will be able to serve the
people," said the mother of six, a former local government
adviser in women's affairs.

'Giant step'

Women made up 5,000 of 300,000 candidates running in last
Friday's elections to city and village councils. Counting in
some areas is still continuing with final results expected on

Women were reported to be front-runners in at least 20 cities
with nearly all of them supporters of the president, who has
encouraged women to play a bigger role in politics.

The top female vote winner in Tehran is Jamileh Kadivar in third
place. She is a former adviser to President Khatami,

"Iranian society appears to want to give women the chance to
prove themselves. Men have not done so well, and so people think
`let's give the women a chance,"' she said .

Deputy Interior Minister Mostafa Tajzadeh, head of the electoral
commission, described the vote as "a giant step towards
participation in the country's public administration".

Forced out

Former Interior Minister Abdollah Nouri, who is leading the
reformers, received the highest number of votes in the capital.

Mr Nouri was forced out of government last year because of his
support for greater social, political and cultural freedom.

Hardliners had also tried but failed to disqualify him from
running in Friday's landmark election.

The nationwide polls were introduced by Mr Khatami to help break
the centralised grip of the conservative establishment.

State radio said about 25 million voters cast ballots - a 65%

In the holy city of Mashhad, the stronghold of influential
conservative cleric Ayatollah Abbas Vaez-Tabasi, the four front-
runners are independents, followed by reformers and
conservatives, according to the Abrar newspaper.

Reports from central Isfahan, the most politicised city after
Tehran, showed reformers leading by a wide margin.

Local journalists said pro-Khatami candidates were set to take
seven of 11 city council seats, with the balance going to


Date: Thu, 4 Mar 1999 10:34:48 EDT
From: Bobby Iri <Bobby@WWW.DCI.CO.IR>
Subject: UNESCO Congratulates Khatami on Successful Electio

IRNA Reported

UNESCO Director General Congatulates Iranian President on Successful
Councils Elections

thr 004
unescodirector general congatulates iranian president on successful
councils elections
tehran, march 4, irna -- director general of the united nations
educational, scientific and cultural organization (unesco) federico
mayor on wednesday cabled his felicitations to iran's president
hojatoleslam mohammad khatami for the successful national elections
for urban and rural islamic councils.
in his message to the iranian president, the unesco official has
referred to the elecions last friday as a turning point in the
political life of the people of iran and described it as an
attestation to the maturity and civic spirit of the people of the
he has also hoped the people of iran would march ahead in the
peaceful development towards building a society on the basis of
fraternal feelings as well as play a more significant role on the
global scene.
::irna 04/03/99 01:11


Date: Thu, 4 Mar 1999 10:36:04 EDT
From: Bobby Iri <Bobby@WWW.DCI.CO.IR>
Subject: West Must End Iran Isolation, Italy Says.

INTERVIEW-West must end Iran isolation, Italy says

05:17 p.m Mar 03, 1999 Eastern
By Steve Pagani

ROME, March 3 (Reuters) - Italian Foreign Minister Lamberto Dini
said on Wednesday the West had to end Iran's isolation and show
clear support for President Mohammad Khatami after nationwide
polls he described as of ``extraordinary importance.''

Dini, speaking hours before leaving on a trip to Washington with
Prime Minister Massimo D'Alema, said more Western leaders, while
keeping up the pressure over human rights and non-proliferation,
should welcome Khatami and his fellow moderates to their

Khatami is due in Italy next Tuesday to start the first trip to
western Europe by an Iranian president since the Islamic
revolution 20 years ago. He then travels to France.

``There is no question in our minds that the new course
initiated by President Khatami needs and deserves strong
encouragement,'' Dini told Reuters in an interview.

``The results of the elections in Iran are of extraordinary
importance...The victory has been so overwhelming that it
indicates that the trend towards a more liberal society and more
open policies is what the Iranian people want,'' he said.

While the polls appeared set to cement the power of Khatami and
his reformist allies, Dini said the moderate Shi'ite cleric
still had to contend with rigid conservatives and traditionalist
clergy opposed to his policies.

``We must make Khatami himself and members of his government
welcome in the West. He should feel that it is not our intention
to isolate Iran or keep him in a religious ghetto,'' Dini said.

``On the contrary, he and his supporters should feel that we
look on Iran as having moderate tendencies and that the
modernisation of the country he is pushing has support abroad.''

Dini said Italy would deliver this message in talks with U.S.
President Bill Clinton and other U.S. officials during the visit
which begins on Thursday.

The State Department said on Tuesday there had been ``some
positive developments'' since Khatami's election but little
change in policies that threaten U.S. and international
interests, such as terrorism and efforts to acquire weapons of
mass destruction.

Dini said Khatami had publicly condemned terrorism as an
international policy instrument and restated his position at the
Islamic Conference last year.

But Italy shared U.S. concerns over nuclear proliferation and
would repeat its firm line during Khatami's visit next week.

Dini said Iran argues that Israel possesses nuclear weapons and
with its former foe Iraq on its doorstep, Tehran has to take
measures to defend itself.

``It is a difficult subject but we will say that Italy has for
its part renounced the development of the nuclear industry even
for energy purposes,'' he said. ``We are against any
proliferation and will say it would be most helpful if Iran
follows the same course.''

Washington has accused Russian firms of helping Iran develop
nuclear and missile programmes and has imposed sanctions on 10
Russian companies and research institutes.

The United States said it would also review a $1 billion oil
deal that Italian energy giant ENI and France's Elf-Aquitaine
signed with Iran on Monday to see if it contravened a U.S.
sanctions law. But many experts believe Washington will not in
the end impose penalties.

Critics of Italy's ties with Iran argue that Rome is more
interested in lucrative oil and gas deals and developing access
to Caspian energy reserves than human rights in Iran.

Dini said, however, that Western states should never shy away
from reiterating the need for more freedom of expression and
religious tolerance in Iran.

But he added that it was also important for the West to consider
Iran as a stabilising force in a volatile part of the world. He
cited Iran's decisions to shift its opposition to the Oslo
Middle East peace process, saying now it would accept an
agreement satisfactory to the Palestinians.

Copyright 1999 Reuters Limited.


Date: Thu, 4 Mar 1999 10:37:10 EDT
From: Bobby Iri <Bobby@WWW.DCI.CO.IR>
Subject: U.S Oil Companies Press U.S for Iran Access.

U.S. Oil Companies Press U.S. For Iran Access

05:44 p.m Mar 03, 1999 Eastern
By David Chance

NEW YORK (Reuters) - Just a day after the State Department
warned it would review a $1.0 billion oil deal between Iran and
two European oil companies, two of the largest domestic oil
companies said they wanted an end to sanctions.

Atlantic Richfield Co., the fifth-largest U.S. oil company, said
Wednesday that not only were sanctions bad for the Los
Angeles-based company, but they were bad for U.S.


``The hard fact is that current U.S. policy will do nothing to
influence Iran's foreign policy or behavior,'' ARCO Executive
Vice President Don Voelte told a conference on investing in Iraq
and Iran.

The reason, he says, is that Iran has alternatives, among them
the deal for the 220,000 barrel per day Doroud oil field between
the National Iranian Oil Co. and France's Elf Aquitaine and
Italy's Ente Nazionale Idrocarburi SpA, or ENI, which rank among
the world's largest private oil companies.

That investment was criticised Tuesday by State Department
spokesman James Foley, who said the Clinton administration was
''disappointed and concerned'' and would examine it under the
Iran-Libya Sanctions Act, which seeks to halt investment in what
the U.S. terms terrorist states.

ARCO has already bid on two Iranian oilfield developments,
subject to the lifting of sanctions, while Houston-based Conoco
Inc. has long complained about the impact of sanctions, which
cost it a stake in the $1.0 billion South Pars natural gas field
in Iran.

Conoco, which is the sixth-largest U.S. oil company by market
capitalisation, also chose the day after Foley's comments to
make another call for the ending of sanctions against Iran.

Michael Stinson, Conoco's senior vice president for government
affairs, told a Senate subcommittee Wednesday that what he
termed U.S. ``policy restraints'' would limit the development of
oil fields in the Caspian Sea, where Iran not only has a
shoreline but also the shortest access to outside markets.

``At this point, it suffices to say that most energy companies
operating in the East Caspian believe trading Caspian crude
through Iran could be highly competitive and probably represent
the lowest capital costs,'' Stinson said.

Pipelines from the Caspian Sea region, which may contain as much
as 178 billion barrels of oil reserves, have become a bone of
contention between the U.S., which is backing a Turkish pipeline
as an alternative to transport through Russia and Iran, and the
oil companies, whose executives are worried about cost in an era
when oil prices are at their weakest in 25 years.

The United States wants a pipeline to the Turkish port of
Ceyhan. But many oil companies say if the U.S. government wants
a Turkish route, it must increase the financial backing.

The cost of building a pipeline over the U.S.-favored route from
Baku, Azerbaijan, to Turkey's Mediterranean port of Ceyhan has
been estimated at up to $4 billion.

``The economic development of the Caspian depends more on moving
oil than finding more oil,'' one senior Western oil executive
said Wednesday.

According to the oil industry, shipment costs to the Georgian
city of Supsa are likely to be around $2 a barrel, while
transport costs to Ceyhan are double that. With production costs
of $5 a barrel of oil and world crude prices at $10 a barrel at
the start of this year, there is no room for extra spending.

Copyright 1999 Reuters Limited.


Date: Thu, 4 Mar 1999 10:38:48 EDT
From: Bobby Iri <Bobby@WWW.DCI.CO.IR>
Subject: Iran/Iraq Oil Investment Risks Abound, Analysts Sa

Iran/Iraq oil investment risks abound, analysts warn
07:56 p.m Mar 03, 1999 Eastern
By Haitham Haddadin

NEW YORK, March 3 (Reuters) - International oil firms weighing
lucrative oil and gas investments in Iran or Iraq need to note
the political and security risks involved, analysts said here
this week.

And that's in addition to economic and legal risks and other
challenges involved, they pointed out at an Iran/Iraq energy
conference in New York.

The analysts warned of the potential of military escalation,
with U.S. forces in the Gulf amid what they called possible risk
from Iranian or Iraqi weapons systems.

``On the horizon looms the specter of Iranian and Iraqi weapons
of mass destruction, particularly nuclear weapons and long-range
ballistic missiles,'' said Kenneth Pollack of the Institute of
National Strategic Studies.

``The problem is that both Iran and Iraq...have assiduously
sought to preserve, as in Iraq's case, or acquire, as in Iran's
case, a non-conventional arsenal that would nullify America's
conventional superiority,'' Pollack added.

Other speakers said firms seeking business in Iran, which sits
on the world's second-largest gas reserves and is the world's
third-largest crude exporter, should understand sensitive
politics linked to negotiating deals or economic reforms.

More than 30 companies from 18 countries competed individually
or as part of consortiums for Iran's largest international
energy tender issued last year, according to the weekly
newsletter, Middle East Economic Survey (MEES).

European companies dominated the list but participants also came
from Asia, Latin America and even the United States, albeit
subject to the lifting of U.S. sanctions, MEES said.

Bijan Khajehpour of U.K.-based Menas Associates' Iran Focus said
Iran needs $70 billion to $80 billion to upgrade its energy
sector, faced with ageing oil fields and falling production
capacity. He said Iran lacks both capital and technology; has
high domestic energy consumption, and the cash-strapped
government faces the financial burden of falling oil prices and
fuel subsidies, which it has to scrap in the face of serious

``In order to attract foreign investment and technology, Iran
has to remove the constitutional and legal obstacles to foreign
investment,'' noted Khajehpour. This process, he added, will
depend on Iran's factional developments and can only be
initiated after parliamentary elections in 2000. For Iran, this
means finding more attractive cooperation formulas.

Oil company executives, who spoke at the conference, agreed that
most investors prefer production-sharing deals to the buyback
formula being offered by Iran, whose constitution bars offering
concessions to foreign investors.

Lance Johnson, president of new exploration and production with
U.S.-based Mobil Corp. (MOB.N), said many of the 17 exploration
projects that Tehran has offered were world class, but the fact
that operatorship has to return back to Iran has kept some
potential bidders at bay.

``The buyback model may offer a competitive return but in our
view, needs to address the potential for upside, and not only
expose the contractor to the downside -- for instance, assuming
all the risk on capital cost overruns,'' he said. ``The limited
duration of the buyback deprives companies, such as ours, of the
opportunity to build a long-term business.''

Dzhevan Cheloyants, vice president of Russia's LUKoil, said the
buyback conditions, under which the operators get payment in
crude, do not fully guarantee fund reimbursement and profit.
This prompted LUKoil to stay out of the 1998 Iran tender, he

In Iraq, tough United Nations trade sanctions remain the main
obstacle to the start of exploration operations to tap its vast
oil and gas reserves, put by some as second only to Saudi

``Negotiating a deal in Iraq is somewhat of a legal minefield,''
said John Fletcher, vice president of legal and corporate
affairs with Canada's Ranger Oil Ltd (RGO.TO), which has
negotiated a deal. ``Before heading off to historic Baghdad, one
must be cognizant of the sanctions policy of the United Nations,
the specific sanctions regulations of the national jurisdiction
of your own country, as well as the regulations of the United
States and the United Kingdom.''

Akhil Gupta, chief executive officer of oil and gas at Reliance
Industries in India, said that despite Iraq's vast potential for
future oil output, the government's decision to award contracts
was ``highly political,'' making techno-economic consideration

((New York Energy Desk, 212 859 1895, fax 212 859 1629))

Copyright 1999 Reuters Limited.


Date: Thu, 4 Mar 1999 10:40:00 EDT
From: Bobby Iri <Bobby@WWW.DCI.CO.IR>
Subject: N.J Executive Pleads Guilty to Iran Arms Scheme

N.J. executive pleads guilty to Iran arms scheme

04:49 p.m Mar 03, 1999 Eastern
NEWARK, N.J., March 3 (Reuters) - A New Jersey aviation
executive pleaded guilty on Wednesday for his part in a scheme
to ship U.S.-made missile and military jet parts to Iran.

Daniel Malloy, 41, owner of International Helicopter Inc.

of Northvale, pleaded guilty to 10 counts of an 18-count
indictment in U.S. District Court, the U.S. Attorney's office
for the district of New Jersey said.

At a hearing on Wednesday, Malloy admitted to conspiring with
Joseph T.P. Balakrishna Menon, a Singapore businessman who owns
Heli-World Aviation Ltd., based in Singapore, to ship missile
parts to Iran through Menon.

U.S. policy forbids sending technology, defence articles and
goods and services to Iran, which Washington says supports
international terrorism.

Authorities charged the men with planning to sell Iran 20
batteries for the AIM-54 Phoenix missile, a long-range
air-to-air missile used exclusively on F14-A fighter aircraft,
in violation of the Arms Control Export Act.

Malloy also admitted to shipping spare parts for Northrop's F-5
fighter jet and for Pratt & Whitney's TF30 military jet engine
used on Grumann F-14A fighter jet to Singapore without licenses
from the State Department, the U.S. Attorney's office said in a

Iran is the only country other than the United States that has
the jets, which Washington sold them in the late 1970s when Shah
Mohamed Reza Pahlavi was in power.

Delivery of the parts was scheduled for February 1998, but an
investigation that began in December 1996 after an anonymous fax
was sent to U.S. Customs headquarters in Washington led to the

``In this case greed knew no boundaries,'' said U.S. Attorney
Faith Hochberg. ``The lucrative international arms business must
be stopped at the borders of rogue countries that support
terrorism,'' she said.

Malloy also admitted that he lied when he told an employee of
Eagle-Picher Technologies Inc. of Joplin, Missouri, that 20
missile batteries he ordered were destined for either London or

Federal law regulates the export of missile batteries, with a
State Department license required for export to anywhere except

In addition, Iran is subject to a U.S. trade embargo,
prohibiting the export of merchandise from the United States or
transshipment to Iran through a third country. Malloy admitted
he planned to ship the batteries to Menon in Singapore, knowing
they would then be sent to Iran.

Menon remains at large internationally and officials continue to
seek his extradition, a spokesman for the U.S.

Attorney's office said.

Under a plea agreement Malloy includes a $750,000 fine, a prison
sentence yet to be determined and the forfeiture of nearly $1.9
million in profits he derived from the scheme.

He also agreed to have his sentence enhanced for attempted
obstruction of justice. According to court documents, Malloy
forged documents which he planted in the government's evidence
in an attempt to exculpate himself.

Each of the counts carries a maximum sentence of between five
and 10 years in federal prison.

The investigation was a joint effort of the U.S. Customs
Service, the FBI, the departments of state, justice, defence,
treasury and transportation and several other government

Copyright 1999 Reuters Limited


Date: Thu, 4 Mar 1999 10:41:48 EDT
From: Bobby Iri <Bobby@WWW.DCI.CO.IR>
Subject: Iran Says Khatami to Discuss Oil Deals in Italy

Iran says Khatami to discuss oil deals in Italy

03:54 p.m Mar 03, 1999 Eastern
TEHRAN, March 3 (Reuters) - Iranian President Mohammad Khatami
will hold talks on oil cooperation during his visit to Italy
next week, a senior Iranian official said on Wednesday.

Deputy Oil Minister Mehdi Hosseini also said Iran was discussing
further projects with Italian energy giant ENI (ENI.MI), which
joined France's Elf Aquitaine (ELFP.PA) in signing a $1 billion
oil deal with Tehran this week, the Iranian news agency IRNA

``Amongst the main topics in President Khatami's upcoming trip
to Italy will be oil and technical cooperation,'' IRNA quoted
Hosseini as saying.

``ENI is the largest Italian oil company which has participated
in buyback tenders offered by Iran, and more negotiations are in
progress with the company,'' Hosseini said.

Hosseini said the direct investment of the Elf-ENI deal to
develop Iran's Doroud oil field was $540 million, adding that
the figure did not include the financing and subcontracting

``The return on the investment is calculated based on the fixed
rate of 13.7 percent, which includes interest on financing
(Libor plus 0.75), which adjusted for inflation will be about 16
percent,'' Hosseini added.

The project, to raise Doroud's oil output to 220,000 barrels per
day, is scheduled to be completed in 49 months, he said.

Hosseini said ENI and The National Iranian Oil Co. (NIOC) had
set up a joint company, which was being registered in the

``This company can enter oil projects in both Iran and Italy,''
he added, without naming the firm.

((Tehran newsroom, +9821 229 4856))

Copyright 1999 Reuters Limited.


End of DNI-NEWS Digest - 3 Mar 1999