Iran oil exports could end by 2015, analyst warns

Report suggests the sharp decline in oil output would not only be caused by lack of investment, but also by Western sanctions.

oil 88 (photo credit: )
oil 88
(photo credit: )
Teheran may reduce its oil production by as much as 25 percent by 2015 and cease exports because of aging fields and a lack of foreign investment, the international oil and gas consultancy company Facts Global Energy reported last week. Facts Global Energy's report rejected Iran's own reported plans to increase production of oil from 4 million barrels per day this year to 5 million bpd by 2015. The report suggested the sharp decline in oil output would not only be caused by lack of investment, but also by Western sanctions and a tight international credit market. Iranian officials have lately dismissed American sanctions as inefficient, saying that they were finding Asian partners instead. Iran is negotiating oil and gas deals with a number of prominent companies, including Russia's Gazprom and China's Sinopec Group. Following US pressures on companies to stop doing business with Teheran, many Western companies have decided on a balancing act. They try to maintain their presence in Iran while not getting into big deals that could endanger their interests in the US. Yet, after oil giants in the West witnessed that their absence in big deals provided Chinese, Indian and Russian companies with excellent opportunities to sign up an increasing number of energy projects and earn billions of dollars, many Western firms are slowly losing their reluctance to invest in or expand efforts in Iran. Some European countries have also recently voiced interest in investment in Iran's energy sector after a gas deal was signed between Iran and Switzerland regardless of US sanctions. The National Iranian Gas Export Company and Switzerland's Elektrizitaetsgesellschaft Laufenburg signed a 25-year deal in March for the delivery of 5.5 billion cubic meters of gas per year. The biggest recent deal, worth $147 million, was signed by German engineering company Steiner Prematechnik Gastec to build equipment for three gas-conversion plants in Iran. This comes at a time when France's Total, Royal/Dutch Shell and Norway's Statoil have put on hold their participation in multibillion-dollar contracts.