Oil pipelines in Iran
Oil pipelines in Iran
The rise in the prices of crude oil and energy is causing much concern to the world economies. The majority of the export revenue of Iran is extracted out of this crude oil only. If the records are to be believed, than an approximate estimation states that 85% of Iran's foreign revenue is derived from crude oil.
Estimation states that 40 to 50% of Iran government's budget and 10 to 20% of Gross Domestic Product of GDP of Iran is contributed by the oil pipelines. However the current statistics records the oil reserves of Iran at about 90 billion barrels. To put it in other words, the calculation reflects as much as 9% of the total accumulated by the globe.
Most of the oil pipelines of Iran are situated in the south-western province of Khuzestan which is located at a close proximity from the border between Iraq and Iran. The government of Iran always counts on the domain of foreign investment to record a boost in the production of oil.
The foreign investments which contribute to the gas and oil operations of Iran are recorded at $12 billion and it was expected to rise more by the year 2005, which happened to be true. The major share of the oil produced in Iran is exported to the Asian continent. This is done by the Japan National Oil Company as well as by its subsidiaries. They also possess the contract to develop some of the most significant oil fields of Iran.
In the year 1995, the president of United States, Bill Clinton signed executive orders, which stated the prohibition of the companies in US as well as their foreign subsidiaries from carrying out any sort of business in the nation of Iran. The contract specifically mentioned that any sort of financial help would not be provided for the petroleum resources development in Iran.
Even according to the 1996 Iran-Libya Sanctions Act, discretionary and mandatory sanctions have been imposed on non-US companies to invest more than $20 million in Iranian oil and gas on an annual basis. It is due to this reason that the oil giant Conoco which was based in US has abrogated a $550 million contract for the development of 2 offshore oil and gas fields. This in turn left the doors open for the Total oil company of France as well as the Petronas oil company of Malaysia.
Again in 1997, reaffirmation was made by the Executive Order 13059 regarding the prohibition of US citizens from participating in any sort of trade and investment in Iran. The year 2001, however saw a new turn and for five more years, the US Congress voted overwhelmingly for the renewal of Congress.
In 2004, the US led occupation authorities in Iraq have however backed plans to construct an oil pipeline to Iran to help the process of speeding of the oil flow out of the country. It is evident from the above facts that oil production is very much vital for the economic stability of Iran.