Dec. 11 (Bloomberg) -- Iran's parliament accepted President Mahmoud Ahmadinejad's fourth nominee for oil minister, ending a political struggle that left OPEC's No. 2 producer without an oil chief since August.

Kazem Vaziri-Hamaneh, former deputy oil minister and the interim head since Aug. 29, was approved by Iran's Majlis today and is flying to Kuwait to attend the meeting of the Organization of Petroleum Exporting Countries tomorrow. Parliament had shunned three previous candidates for lack of experience. The new minister, 60, has spent 30 years in the oil sector.

Vaziri-Hamaneh will be responsible for expanding Iran's oil output, which has stagnated for more than two years. He will also have to determine foreign companies' involvement in the industry following conflicting signals from Ahmadinejad's administration. Iran, holder of the world's second-largest oil and gas reserves, has failed to meet its OPEC quota every month this year.

Foreign investments may slow down a bit compared to the previous administration, but at least Vaziri is less radical than the president's three previous nominees,'' said Saeed Laylaz, a political and economic analyst in Tehran. Major management changes in the oil ministry, as earlier called upon by Ahmadinejad, are unlikely,'' Laylaz said.

European energy companies, including Royal Dutch Shell Plc, Statoil ASA and Japan's Inpex Corp., are already facing reduced profits in Iran as administrative delays, technical glitches, tough contract terms and Iran's economic isolation because of U.S. trade sanctions hamper development. U.S. companies are barred by law from investing in Iran's energy industry.

OPEC Meeting

Vaziri-Hamaneh ``is in the business, he is in the energy industry for a long time and I think he has experience of this market,'' OPEC's president, Sheikh Ahmad Fahd al-Sabah, told reporters in Kuwait today.

Vaziri-Hamaneh was deputy oil minister in charge of coordination affairs under Bijan Namdar Zanganeh, who was oil minister for eight years. He also served on the board of the state-run National Iranian Oil Company and holds a master's degree in management and a bachelor's degree in mechanical engineering, according to the oil ministry Web site.

He was approved with 172 votes in favor, 53 against and 34 abstentions, a live broadcast on state television showed.

He's not seen as a strong decision-maker, which may lead to delayed decisions, analysts such as Ali Ghezelbash, associate director at Tehran-based Atieh Bahar Consulting, said.

Decision-Making

Unlike his predecessor, Vaziri-Hamaneh is not perceived by petroleum specialists as someone who will stand up and say: This is my decision,'' Ghezelbash said.He's more trying to please all sides and that may lead to slower decision-making.''

Iran is reviewing new formulas for investment by foreign companies in its oil and gas industry, Deputy Oil Minister Seyed Mehdi Mirmoezzi said on Dec. 5. One option would increase the length of contract terms with foreign companies to make deals more attractive to them. Another, less favorable formula is to rely more on the country's foreign currency reserves to finance future projects, leaving foreign companies aside, he said.

Foreigners are forbidden rights over Iran's natural resources. Instead, they must agree to finance the development of reserves, hand them over to Iranian control and then recover their investment at an agreed rate of return from subsequent production, so-called buyback agreements.

"We must try (to) find another way'' than buybacks, Vaziri- Hamaneh, who speaks limited English, told reporters on Dec. 4. He declined to elaborate on which model Iran will regulate foreign oil investments in future.

Production-sharing agreements and concessions aren't allowed under the Islamic republic's constitution.

Foreign Investment

Iran's five-year economic plan shows that $40 billion out of the $70 billion in expected oil and gas investments will have to come from foreign sources. The blueprint, which was adopted before Ahmadinejad took office in August, counts on a 25 percent increase in oil output to 5.2 million barrels a day by 2010.

 Ahmadinejad, who won the presidential election after pledging to redistribute wealth to Iran's 70 million people, had earlier chosen outsiders on purpose for the post to eliminate what he called a ``mafia'' presence in the oil ministry. He has also said he would give domestic companies priority in developing the oil and gas sector, which represents 80 percent of the country's exports.

The Tehran Stock Exchange's main index fell 0.1 percent today. It has lost a fifth of its value since Ahmadinejad won the presidential election on June 24, giving the backers of the Islamic revolution full power over state institutions.  Iran has debated for more than two decades whether to open or close its economy.

The Islamic republic expelled foreign oil and gas companies after the 1979 revolution, only allowing them back in the early 1990s to counter U.S. economic sanctions. Iran pumped as much as 6 million barrels a day before the revolution, 50 percent more than today.