Posted on 12/21/2006 11:42:17 PM PST by gleeaikin
Iran's oil minister admitted yesterday that Tehran was having trouble financing oil projects, in a rare acknowledgment of the cost of its nuclear dispute.
"Currently, overseas banks and financiers have decreased their co-operation," Kazem Vaziri-Hamaneh told Shana, the oil ministry news agency.
The statement underlined the impact of de facto financial sanctions on the Organisation of the Petroleum Exporting Countries' second biggest oil producer. As the controversy over Iran's nuclear programme has escalated, the US has applied pressure on European banks and financial institutions to curb dealings with Tehran.
The fact that the UN Security Council could soon impose the first--even if mild--sanctions against Iran has compounded the political uncertainty and risks of doing business there.
Iranian officials insist there is global interest in investing in Iran's oil industry and European executives play down any impact on companies seeking deals.
The National Iranian Oil Company has signed a memorandum of understanding with China's CNOOC to develop the North Pars gas field. The memorandum, if it turns into an agreement, would bring $16bn (billion) of Chinese investments for the initial part of any deal, the semi-official Fars news agency reported yesterday.
But western officials hope the financial squeeze's effect on the oil industry, the backbone of Iran's economy, will help raise domestic pressure for a change of policy and persuade the regime to heed international calls for a suspension of its uranium enrichment programme.
Iran's oil production capacity, at 4.3m (million) barrels per day, is set to reach 5m bpd according to the country's latest five-year plan, which closes in 2009. This would involve $16bn of investment.
But the International Energy Agency reckons that Iran's longer term plans to lift oil production to 6.8m bpd by 2030 would require nearly $80bn, with expansion plans for the gas industry needing an extra $85bn.
"There's a growing awareness that de facto sanctions are beginning to hurt and everyone understands the future of the economy depends on the development of oil and gas," said a western diplomat. "Banks are not lending, partly because of US pressure, but the banks are also drawing their own conclusions."
Mr. Vaziri-Hamaneh said projects would be financed from the Oil Stabilisation Fund, which accumulates oil windfalls to promote the private sector and save for periods of low oil prices.
The International Monetary Fund estimates this fund exceeds $20bn. But one former Iranian official has said that the government had already withdrawn $10bn in the first seven months of the Iranian year starting in March to meet financial shorfalls caused by foreign banks' refusal to open letters of credit for Iran's business dealings.
Fill your gas tanks now. I just heard that the ruler of Turkmenistan has died, and unrest is expected. I think the report said they are the 5th largest oil producer? Any other information out there?
I posted this article very late last night, and apparently few have seen it. As people who have posted previously on the subject of Iran, I thought this might interest you and you might know others who would like to see it. The link http://www.freerepublic.com/focus/f-news/1757167/post?page=2
I posted this article very late last night, and apparently few have seen it. As people who have previously commented on Iran posts, I thought this might interest you or you might know other who would like to see it. The link is
http://www.freerepublic.com/focus/f-news/1757167/posts?page=2
Now I am going to post some articles on the death of the dictator of Turkmenistan.
To think it wasn't long ago China was actually an exporter of oil, my how things have changed.
China is also trying to wrap up a deal for 30 billion cubic meters per year in Turkmenistan, which the dictators death puts in limbo. See my post "Unexpected death brings uncertainty over gas supply." I am also posting 3 other articles on Turkmenistan today if you are interested.
"The Iranian government has finally developed the ultimate “nuclear” weapon that can swiftly destroy the financial system underpinning the American Empire. That weapon is the Iranian Oil Bourse slated to open in March 2006. It will be based on a euro-oil-trading mechanism that naturally implies payment for oil in Euro. In economic terms, this represents a much greater threat to the hegemony of the dollar than Saddam’s, because it will allow anyone willing either to buy or to sell oil for Euro to transact on the exchange, thus circumventing the U.S. dollar altogether. If so, then it is likely that almost everyone will eagerly adopt this euro oil system . . ."
[The Proposed Iranian Oil Bourse]
Excellent article !!!!!!!
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