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IRAN


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 136,833 107,522 114,100 34
         
GNI per capita
 US $ 2,000 1,710 1,680 110
Ranking is given out of 208 nations - (data from the World Bank)

Books on Iran

REPUBLICAN REFERENCE

Area (sq.km)
1.648 million

Population

66,128,965

Capital
Teheran

Currency
Iranian rials

President
Mohammad Khatami-Ardakani




 

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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