CONCEPT – IRANIAN OIL

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CONCEPT – IRANIAN OIL

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• An oil superpower: Iran is an energy superpower with a robust Petroleum industry. Oil exports are the country’s primary source of foreign currency. The oil and gas industry has been the engine of economic growth, directly affecting public development projects, the government’s annual budget, and most foreign exchange sources.
• History of oil industry: Iran's oil industry began in 1901, when British speculator William D'Arcy received a concession from Iran to explore and develop southern Iran's oil resources. The discovery of oil in 1908 led to the formation in 1909 of the London-based Anglo-Persian Oil Company (APOC). By purchasing a majority of the company's shares in 1914, the British government gained direct control of the Iranian oil for 37 years. A 60-year agreement signed in 1933 established a flat payment to Iran of four British pounds for every ton of crude oil exported and denied Iran any right to control oil exports.
• Oil shock of 1970s: In 1973, at a time when Iran was the second-largest oil exporter in the world and the Arab–Israeli War of October 6–25 was pressurizing the price of oil, the Shah of Iran clearly said that the Western nations increased the price of wheat by 300%, and they buy Iranian crude oil and sell it back as petrochemicals at a hundred times the price paid to us, so oil too will rise now!
• Iranian Revolution 1979: Following the Revolution, the NIOC took control of Iran’s petroleum industry and canceled Iran’s international oil agreements. In 1980 the exploration, production, sale, and export of oil were delegated to the Ministry of Petroleum.
• Statistics: Total oil production reached a peak level of 6.6 Mbbl/d (1,050,000 m3/d) in 1976. By 1978, Iran had become the second-largest OPEC producer and exporter of crude oil and the fourth-largest producer in the world. In 2008 Iran produced 3.9-million-barrels (620,000 m3) per day (bpd) and exported 2.4 Mbbl/d (380,000 m3/d). Accounting for 5 percent of world production, it returned to its previous position as OPEC’s second-largest producer.
• Estimates: According to the Iranian government, Iran has enough reserves to produce oil for the next 100 years while oil reserves of other Middle Eastern countries will be depleted in the next 60 years and most other oil-rich countries will lose their reserves within the next 30 years.

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