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Books on Iran
REPUBLICAN REFERENCE
Area (sq.km)
1.648 million
Population
66,128,965
Capital
Teheran
Currency
Iranian rials
President
Mohammad Khatami-Ardakani
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Update No: 041 - (25/04/05)
Iran's nuclear program falls off the centre stage… for
the time being
During April conciliatory moves on both sides allowed a reduction of the
tension over the issue of Iran's nuclear program. The Iranians renounced to push
for restarting uranium enrichment, the Europeans started talking about a plan to
run an IAEA-monitored small enrichment program, and Condoleeza Rice played down
Iran's nuclear threat, effectively postponing until the summer any decision with
regard to whether to adopt a tougher stance against Teheran. This improvement is
the result of the US decision to support the diplomatic efforts of the Europeans
and then gain diplomatically from their expected failure. The Iranians,
realising this, decided to moderate their stance. The Bush administration,
however, continued not to miss any opportunity to irritate the Iranians,
possibly hoping to push them towards some inconsiderate action. In April, for
example, it requested further funding from the US Congress to fund the
opposition to the Iranian regime.
A crowded electoral campaign
The number of presidential candidates continued to grow during April, but
the leading figures were beginning to emerge more clearly. Among the
conservatives, Larijani seems to have taken a clear lead. He is trying to repeat
the formula which led to the success of the conservatives in the last
parliamentary elections. Despite his impeccable conservative curriculum, he
claims that the expertise of the academics is needed to lead the country. He
criticises the excessive state involvement in the economy and tries to appeal to
youth. Interestingly, the wave of social repression which had characterised the
first several months of conservative majority in the parliament has ended and
now a new climate of tolerance of "unislamic" behaviour among the
youth has emerged, suggesting that the law enforcement agencies, dominated by
the conservatives, are trying to undermine the appeal of the reformist
candidates. It also suggests that Larijani's stance is not just the result of a
personal elaboration.
Hashemi Rafsanjani has not declared his candidacy yet, but he already appears as
the leading centrist candidate. His positions are not very different from those
of Larijani, except in foreign policy, where he advocates a dialogue with the
Western countries, which Larijani opposes. Hashemi-Rafsanjani's greatest
strength remains his previous experience as president, which might attract
voters worried by the worsening relations with the US. On the other hand, his
main shortcoming appears to be the lack of endorsement of Supreme Leader
Khamenei, who appears unhappy about the prospect of a Rafsanjani presidency and
would rather have a conservative elected. Among the reformists, a discussion is
going on concerning the method of selection of a single candidate. Some suggest
that an arbitration is needed, others that both candidates should run until the
last few days and then the one appearing to be the weakest of the two should
withdraw.
Oil industry: much ado about nothing
The Iranian government continued to announces new deals in April, this time
with Iranian companies. The failure of the tenders for the development of
Bangestan and South Pars resulted in the decision to award the projects to
Iranian firms on the basis of buyback contracts. Interest in bidding for future
projects remains strong among multinationals, as expressed in April by Total
(France) and ENI (Italy). However, the problem is that Iran is not bringing new
fields to production quickly enough to expand its output. Although information
on the productivity of Iran's oil fields is limited, it seems that the output of
existing fields is accelerating its decline. Onshore fields are reported to be
losing production at a 8% rate this year, up from 7%, while offshore fields are
losing production at a rate of 13% a year. This means that Iran's production
loses 350,000 bpd per day of capacity and some analysts believe that this figure
could soon grow to 500,000 bpd. Iran will have to work harder to develop new
fields if it does not want to see it a production actually decline. With regard
to gas production, it is still far below internal consumption and will not catch
up very soon, not least because consumption is growing fast too. It might be a
decade before Iran exports large quantities of gas and even then it is unlikely
to reach the targets set by the government.
Unbalanced development
Because Iran wastes so much of its resources subsidising consumption of fuel
internally and in several other ways, there has been little money in recent
years to be invested in infrastructural projects. A good example is that of
power generation. Prices are too low and the state company in charge of power
generation and distribution cannot invest. In fact, it is heavily in debt. It is
thought that Iran might face serious blackouts this year. This waste is more
likely to be the real cause of Iran's disappointing economic growth last year
(2004/2005), when GDP growth was less than 5%, that the manoeuvres of the
parliament, as suggested by a minister.
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ENERGY
Iran's oil production capacity to rise
Iran's oil production capacity is to rise by 160,000 barrels per day, National
Iranian Oil Company (NIOC) head, Mehhdi Mir-Moezzi, said New Europe reported.
Mir-Moezzi said that once the projects for development of Rag Sefid and
Bangestan oil fields in Ahvaz in southwest Iran and the south Pars oil layer in
the Persian Gulf came on stream, Iran would be capable of the production rise.
The NIOC also plans to pump 200,000 barrels per day from its Noruz and Sorush
oilfields in the Gulf.
Iran's capacity currently stands at 4.2m barrels per day but the country hopes
to raise it to over 4.5m once the new oilfields get operational.
Following a recent decision in Isfahan to raise the cartels' quota to 27.5m
barrels per day - and another half a million in June the market situation
accordingly - Iran's production quota was raised to 3.97m barrels per day.
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