Investment shortfall 'threatens Iran oil output'
TEHRAN (Thomson Financial) - Iran's oil production capacity will fall by about 5 pct a year unless much-needed investment can be found, a top oil executive warned in a report.
'Currently on average we produce four million barrels a day, but if no new investment flows in, 5 pct of this capacity will be lost each year,' Akbar Torkan, managing director of the state-run Pars Oil and Gas Company, was quoted as saying in Shargh newspaper.
Iran, the OPEC oil cartel's second largest exporter, produces less than 4.2 mln barrels a day and, according to its OPEC quota, exports a little more than 2.5 mln barrels per day.
'Recently some restrictions have been created by some European banks regarding financing some of the projects here,' Torkan said in a veiled reference to Washington's efforts to put pressure on international lenders to curtail their business in US dollars with Iran.
'But the oil ministry is trying to create investment and guarantee funds to address these restrictions,' he added.
The US drive is parallel to UN sanctions against Tehran over its failure to suspend uranium enrichment, which is used to produce fuel for nuclear power stations but can also make the fissile core of an atomic bomb.
Iran vehemently denies the charges, saying it needs nuclear energy to produce electricity for its ever growing population.
Last week, Oil Minister Kazem Vaziri Hamaneh said the sanctions were harming Iran's ability to invest in oil infrastructure.
'The problems that they have made for banks have troubled financing of some projects,' he said.
Vaziri Hamaneh added that the government had decided to use its own resources, built up from windfall receipts from high world oil prices in recent years, to make up for the lack of foreign investment.
But President Mahmoud Ahmadinejad has insisted that Iran was unfazed by the prospect of further sanctions.
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