NIOC Background.

As Petroleum Minister, Nozari is chairman of NIOC's board. He also chairs the boards of National Petrochemical Co. (NPC), National Iranian Oil Refining and Distribution Co. (NIORDC), NIGC and many other units of NIOC. Not happy with their performance, Nozari's and Vaziri's predecessor Zanganeh had made each of these firms somewhat independent from one another and got NIOC to be decentralised by 1998, giving autonomy to its various units.

In late 1998, NIOC divided its upstream sector into five producing units: NIOC South, NIOC Offshore, NIOC Central, Pars Oil & Gas Co. (POGC), and a Caspian Sea firm called Khazar Exploration & Production Co. (see omt15IranFieldsApr13-09).

NIOC South, by far the biggest of these units, accounts for most of Iran's crude oil production. Decentralised under a holding company, NIOC South (also known as NISOC) has four geographical units: Marun, Karun, Masjid-e-Suleiman and Agha Jari.

NIOC has had many of its functions privatised, broken up, spun off and subjected to an influx of managers from other sectors of the economy. Since late 2005, the petroleum industry has been less efficient than before. NIOC, which accounts for nearly one-half of the Petroleum Ministry's work-force of more than 100,000, has been trying to streamline itself radically while ensuring that it does not lose any control. The contradiction has produced a unique formula which is still evolving and has yet to prove itself.

With NIOC set up in the wake of the 1951 nationalisation of the petroleum sector, the Iranian industry was first concentrated in the hands of what is now BP. But since then NIOC has had an unusual life (see omt16IranWhoApr18-05).