A major goal of the American-led sanctions effort has been to crimp investment in Iran, especially in the oil sector. It has been obvious this has been happening, but Iran has never admitted it until now. The regime regularly makes announcements boasting of a huge volume of foreign investment it says it is attracting.
But, according to the Iranian Students News Agency, Deputy Oil Minister Ahmad Qalebani, who is the managing director of the National Iranian Oil Co. (NIOC), said Monday, “Compared to last year, there was an insignificant drop in our crude production due to the lack of investment in developing oilfields.”
In recent days, several oil officials have been quoted as saying that Iranian oil production is currently 3.5 million barrels a day. Previously, it was normal for officials to claim production was over 4 million barrels a day.
The 3.5 million figure is even lower than foreign estimates. For example, Platts, a respected industry newsletter, estimated Iran’s November production at 3.58 million barrels day, down from 3.67 million just five months earlier in June. According to Platts, Iranian production is down about 5 percent over the last two years, not an “insignificant” amount, to use Qalebani’s term.
Deputy Economy Minister Behruz Alishiri told the Iranian Labor News Agency last week that Iran needs up to $300 billion in foreign direct investment (FDI) to meet the objectives of its fifth five-year development plan (2010-2015), and reach 8 percent economic growth rate.
“Totally, the country needs around $1 trillion investment by the end of the fifth development plan,” Alishiri said. This is both foreign and domestic capital and in both the oil and non-oil sectors.
He said some $15 billion in foreign direct investment was attracted in the last Persian year, which ended March 20, 2011. That figure is not credible, however. According to United Nations Conference on Trade and Development (UNCTAD) statistics, Iran attracted only $3.6 billion in foreign direct investment in 2010.
Alishiri claimed in October that in terms of the growth of foreign direct investment, Iran is ranked among the world’s top countries. Despite the global economic sanctions, he said more than 400 foreign companies are now directly investing in Iran in different sectors.
