UpstreamOnline: Sanctions no threat to Iran play

By Upstream staff

Iran’s Oil Minister Kazem Vaziri-Hamaneh has insisted that tougher United Nations sanctions would fail to choke development of Iran’s oil and gas industry.

US, UK , French, German, Russian and Chinese diplomats at the UN have reached a tentative deal on imposing fresh sanctions on Iran and hope to introduce the measure at the Security Council today, providing their governments agree.

Vaziri-Hamaneh brushed off reporters’ suggestions that Iran’s energy industry would suffer as a result.

“For the past 25 years we have witnessed unilateral sanctions by the US but have developed our oil industry with the help of internal resources and the help of other countries,” Hamaneh told Reuters.

“We have been able to maintain our production. We don’t have any worry about that.”

The text of the deal, obtained by Reuters, includes a ban on Iranian arms exports, an assets freeze on individuals and companies involved in Tehran’s nuclear and ballistic missile programs and a call to nations and institutions to bar new grants or loans.

It aims to penalise Iran for refusing to suspend uranium enrichment, which can produce fuel for use either in nuclear bombs or civilian power stations.

Iranian President Mahmoud Ahmadinejad has dismissed any new UN sanctions resolution as “a torn piece of paper” that would not stop Tehran’s nuclear work, a local news agency reported.

China, which sits on the UN Security Council, is one of the biggest investors in Iran’s energy sector. European players Shell, Total and Eni have also invested heavily and buy Iranian oil.

Industry analysts have said Iran is in danger of slipping down the rankings of energy exporters, however, because it is not attracting enough money to compensate for steep decline rates from oilfields and meet rising domestic demand.

“The short story is that every aspect of the oil infrastructure has been starved – drilling, refineries, distribution, even the gas stations in Iran,” academic Roger Stern of US John Hopkins University told Reuters recently.

Hamaneh said Iran would continue to seek payment for its oil in currencies other than the dollar. Iranian oil is priced in dollars – the currency of the world’s energy markets – but customers can make payment in euros, yen or other denominations.

“What we have done is to get the proceeds of oil sold in the currencies the country needs. That is still going on. It is for the time being continuing,” he said.

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