Iran minister admits sanctions hurting investment

Deputy oil minister confirms production dropped in 2011

Iran's oil production drops 500,000 bpd in 2011 as foreign investors sta away. GETTY IMAGES
Iran's oil production drops 500,000 bpd in 2011 as foreign investors sta away. GETTY IMAGES

In a rare moment of candour, Iran’s oil ministry has admitted that international sanctions against the country have negatively affected oil production.

"Compared to last year there was an insignificant drop in our crude production due to lack of investment in developing oil fields," Deputy Oil Minister Ahmad Qalebani was quoted as saying by Iran’s student ISNA news agency.

Foreign minister, Ali Akbar Salehi, was quoted by the official Islamic Republic News Agency as saying, “We cannot pretend the sanctions are not having an effect.”

Iran is producing around 3.5 million barrels per day (bpd) of oil this year, around 500,000 bpd down on 2010.

Yesterday Russian firm Tatneft was forced to deny reports that it had signed a development contract with Tehra, valued at between $700 million to $1 billion, after the oil ministry’s news agency Shana reported that the company had signed a deal to increase production at the Zagheh heavy crude oilfield to 55,000 bpd.

These events suggest Iran is struggling to preserve its production levels despite defiant official messages that sanctions are doomed to failure and a series of announcements of ambitious new oil infrastructure and development plans.

Newsletter

Most Popular

Digital Edition

Oil & Gas Middle East - September 2020

Subscribe Now