1.0 Introduction: The Davari Revelations
Abdolreza Davari, a former media aide to Iranian President Mahmoud Ahmadinejad, methodically dismantled two decades of state-sponsored narrative surrounding the Crescent Gas contract. For years, the official story of the deal with the UAE-based Crescent Petroleum was a simple tale of rampant corruption and the treasonous "cheap selling" of national resources. A few hours later, Davari attended a Clubhouse room where several audience members were eagerly waiting for him to attend and brief them on the event. Davari’s testimony, however, shatters that narrative, exposing a starkly different reality: a strategically vital agreement deliberately sabotaged by internal political factions for domestic power, at a staggering cost to Iran's national security and treasury. This analysis will dissect Davari's explosive claims to uncover the intricate web of political manoeuvring, strategic miscalculations, and security implications behind one of Iran's most damaging energy disputes.
These revelations force a re-examination of the contract's origins and the true nature of the opposition that ultimately led to its demise.
2.0 The Original Contract: A Strategic Gambit
In the early 2000s, the Crescent contract was conceived as far more than a commercial transaction; it was a geopolitical tool. The government of President Mohammad Khatami envisioned the deal as a way to create strategic energy dependency, binding the United Arab Emirates to Iran through a long-term gas supply agreement. This energy lever was seen as a crucial instrument for enhancing Iran's regional influence and security.
2.1 Initial Terms and Objectives
Negotiations for the landmark deal began around 1997, culminating in a contract signed in 2001. The agreement stipulated the sale of sour gas from the shared Salman gas field. Critically, this was gas that was otherwise being flared off and wasted or drained by regional competitors. The core objective was to monetize a wasted national asset while simultaneously forging a powerful strategic lever. The initial terms set a price of $18 per 1,000 cubic meters, a figure that would later become the focal point of a manufactured political firestorm.
2.2 The Irony of the Opposition
One of the most startling claims made by Davari relates to the origins of the opposition that would eventually derail the contract. The dominant narrative has long implicated Mehdi Hashemi, son of the late President Akbar Hashemi Rafsanjani, as a central figure in the alleged corruption. Davari asserts the opposite was true: Mehdi Hashemi was a staunch opponent of the deal.
According to Davari's account, Hashemi was so vehemently against the terms that he resigned from his position at the National Iranian Gas Company in 2000 in protest. More significantly, it was Hashemi who later provided the critical arguments and technical objections that formed the basis of a scathing 2002 report against the deal authored by Hassan Rouhani, then Secretary of the Supreme National Security Council. This political irony—that a figure routinely accused of profiting from the deal was, in fact, one of its earliest and most effective detractors—exposes the cynical manipulation of the public narrative.
This early opposition, rooted in technical disagreements, was later eclipsed by a far more potent and, according to Davari, baseless weapon: allegations of widespread corruption.
3.0 Deconstructing the Corruption Narrative
The narrative of high-level corruption became the central justification for sabotaging the Crescent contract. Davari argues forcefully that this narrative was a politically motivated fabrication, constructed without a shred of evidence to discredit a generation of experienced energy managers and justify the deal's cancellation. Despite years of relentless accusations, substantive proof of a coordinated bribery scheme involving senior officials has never materialised.
3.1 The Absence of Evidence
Davari's core argument rests on the fact that numerous domestic and international investigations have failed to uncover any credible evidence of corruption that would invalidate the contract.
- Lack of Proof in International Courts: Both the arbitration court in London and the tribunal at The Hague, which reviewed the case extensively, found no proof of corruption that affected the contract's fundamental validity.
- UK Serious Fraud Office (SFO) Findings: The UK's Serious Fraud Office conducted a detailed forensic investigation, including a review of documents recovered from the laptop of a key intermediary, Abbas Yazdanpanah. It yielded no evidence of bribery or high-level financial misconduct.
- Domestic Iranian Courts: Even within Iran's own judicial system, prosecutors were unable to establish charges of bribery or embezzlement against the senior officials and oil ministry managers involved in negotiating the contract.
3.2 The Reality of the "Bribes"
The "vast corruption" that supposedly scuttled a multi-billion-dollar strategic asset amounted to little more than petty cash paid by a political fixer to secretaries for scheduling meetings—an absurdity that underscores the baselessness of the entire campaign. According to Davari, the only documented payments were minor sums paid by an intermediary, Ali Taraghijah, to low-level administrative staff, such as a minister's secretary. The purpose was not to bribe officials to approve the deal, but simply to secure appointments for Crescent's chairman, Hamid Jafar.
With the corruption claims proving unsubstantiated, a pragmatic effort was made under President Ahmadinejad's government to salvage the agreement.
4.0 A Deal Revived: The Kordan Renegotiation
In a critical but largely overlooked turning point, President Ahmadinejad appointed Abdolreza Kordan, a trusted aide, as his special representative to resolve the Crescent impasse. Kordan was granted full authority to renegotiate the contract and find a solution that served Iran's interests.
On August 14, 2008 (23/5/1387), a pivotal meeting was held. In attendance were Kordan, senior officials from the National Iranian Oil Company (NIOC), Crescent Petroleum's Chairman Hamid Jafar, and its CEO Majid Jafar. The dynamics of the negotiation were telling: Crescent's chairman offered a new price of $150 per 1,000 cubic meters; Kordan countered with a firm demand for $180. They settled at the midpoint. According to the official minutes of the meeting, Kordan successfully secured a new price of $165.
Contract Term | Original Price | Renegotiated Price |
Price per 1000 m³ | $18 | $165 |
This nearly ninefold price hike was a monumental victory for Iran. It vaporised the primary criticism of "cheap selling" and transformed the contract into a highly profitable venture. The deal was renegotiated, agreed upon, and documented, seemingly putting the entire dispute to rest.
However, this successful resolution was about to be undone by a fatal intervention from Iran's top security official.
5.0 The Jalili Intervention: Sabotaging a Solution
According to Davari, the man singularly responsible for the contract's ultimate failure was Saeed Jalili, then the Secretary of Iran's Supreme National Security Council. Just as a viable solution was reached, Jalili intervened directly, using the authority of his office to halt all progress and steer the country toward a multi-billion-dollar legal defeat.
5.1 The Critical Letter
The decisive action was a letter Jalili sent to President Ahmadinejad on August 1, 2009 (10/5/1388). Davari, who received the letter from Ahmadinejad himself, outlines three devastating points made by Jalili:
- Admission of No Evidence: In a stunning admission for the country's top security official, Jalili acknowledged that while the Ministry of Intelligence and other bodies alleged corruption, there was a "lack of necessary documents" to secure convictions. After years of character assassination, the campaign was officially revealed to be baseless.
- Catastrophic Miscalculation: Jalili provided a formal estimate of the financial risk of cancellation. He assured the president that the "worst-case" loss from arbitration would be approximately $851 million—a figure that would later prove to be a disastrous underestimation.
- Order to Halt Negotiations: Most critically, Jalili formally recommended that the president "prevent the continuation of negotiations with the Crescent company." He insisted that the entire file be centralised under his control, effectively freezing out the oil ministry and ending any chance of a resolution.
5.2 Political Motivations
The timing of Jalili's letter is explosive. As Davari notes, it was sent on the last working day of Ahmadinejad's first term—a calculated political move to "lock the file" and cement Jalili's control, ensuring no successor could resolve the issue. This act was part of a broader political project known as "Khales-sazi" (purification), aimed at using security pretexts to purge a generation of experienced, technocratic managers from Iran's energy sector.
The sabotage was immediate and coordinated. Just after Kordan secured the renegotiated deal, Jalili's deputy leaked details of the meeting to the hardline newspaper Kayhan, which launched a public attack questioning Kordan's authority to even be involved. Jalili’s intervention killed the renegotiated deal, shifting the conflict from the negotiating table to an international courtroom.
6.0 Geopolitical Fallout and National Security Costs
The failure to implement the Crescent contract transcended a mere commercial dispute, evolving into a strategic catastrophe with profound consequences for Iran's economy and national security. The country not only lost billions in potential revenue but also forfeited a crucial geopolitical advantage.
6.1 Loss of Strategic Leverage
The original strategic goal of the contract—creating UAE energy dependency on Iran—was lost. Davari argues this leverage could have been invaluable, pointing specifically to the 2012 currency crisis, which crippled Iran's economy and was orchestrated in large part from exchange houses in the UAE. Had the gas pipeline been operational, Iran would have possessed a powerful counter-lever to deter such hostile economic actions.
6.2 International Interference
Davari also points to evidence of foreign powers working to kill the deal. He cites WikiLeaks documents revealing that both the United States and Israel actively opposed the contract, deeply concerned that it would give Iran a strategic hold over a key U.S. ally in the Persian Gulf.
6.3 The Financial Penalty
The ultimate outcome of Jalili's intervention was a legal and financial disaster. After Crescent filed for arbitration, the international tribunal issued an initial ruling against Iran for $2.4 billion. The $2.4 billion penalty was not just a financial loss; it was a devastating public indictment of Jalili's catastrophic strategic and financial miscalculation, which had assured the president of a maximum liability of only $851 million.
The most damning revelation, however, is that this entire outcome could have been avoided through simple, legal mechanisms that were deliberately ignored.
7.0 Conclusion: A Self-Inflicted Wound
Abdolreza Davari's testimony paints a damning portrait of the Crescent saga. His central thesis is that the contract was not destroyed by corruption or unfavourable terms, but by a deliberate campaign of internal political warfare spearheaded by Saeed Jalili and his allies. The renegotiated price of $165 had already rendered the "cheap selling" argument moot, while years of investigation failed to produce any evidence of high-level corruption.
The most tragic irony is that multiple straightforward legal paths to cancellation were available all along. Article 13 of the contract contained a force majeure clause, allowing Iran to terminate the deal if new national laws made its execution impossible. A simple parliamentary act banning the export of sour gas would have legally and cleanly nullified the agreement without penalty. Other domestic legal avenues, such as claiming ghabn (being grossly deceived on price) or tadlis (fraud), were also ignored.
They chose none of these. Instead, they pursued a baseless corruption narrative that paralysed the government, purged the energy sector of its top experts, and ultimately subjected the country to a multi-billion-dollar penalty. The Crescent case stands as a painful lesson in how a nation's security and economic interests can be sacrificed at the altar of political purges. The final, haunting question that Davari's testimony leaves unanswered is whether this devastating, self-inflicted wound was the result of profound ignorance or part of a more complex and cynical game.
Find the original talk HERE
By: Majid Khabazan
