According to a recent report by the US National Academy of Sciences, 70% of Iran’s budget is derived from its oil industry, but they’ve invested nothing to improve or even maintain this key revenue source.
I don’t know about you, but that really bothers me.
Iran's oil dependence
Not that uncommon when a major industry is run by the government, for the government. At least Big Oil is willing to invest in keeping the golden egg-laying goose fairly healthy, while in government hands the funds often get siphoned off for political purposes – to fund current social programs or military spending.
I can see something similar happening in Venezuela if Chavez stays in power.
And yes, this bothers me – especially given the antipathy of the Iranians as regards the USofA, and the apparent willingness of some of the more radical elements there to sacrifice themselves (or to motivate others to sacrifice themselves) in suicide attacks.
~EdT.
I’m curious to know why Polimom finds this disturbing? Having worked oil field all my life I can tell you that this isn’t particularly surprising, and yes, I’d not be surprised to see Venzuela follow the same path. Iran’s oil production dates back to the 1920’s if not before and was originally developed by British Petroleum, point being, their fields are long past their prime and “old” field require ever increasing capital expenditures to flatten out what we call the decline curve. (story for another day). As well, both downhole and well head facilities, valves, heater treaters, seperators, compressors, and pipeline infrastructures wear out over time and become ever more costly to repair and maintain. The company I work for is famous for being able to not only keep old fields alive, but taking them to new production levels while dramatically reducing lifting costs. It’s an art, and it’s an art dependent upon retention of key employees, many of whom make re-manufacturing of ancient equipment a hobby practiced in their spare time. (They actually show this stuff off in the company magazine-which just goes to show theirs a nut for every squirrel).
Back to the point, this may actually be good news. I’d heard a fascinating report on NPR about the fact that once a Middle Eastern country finds itself running out of oil, there is a much greater propensity to democratise, enjoy economic and social reforms, etc. Weird, but it seems that the “oil” addiction is as bad for the supplier as it is for the junkie.
Hi Glide,
What’s bothering me here is that Iran is dependent upon this revenue, but hasn’t invested / maintained… but I’m sure they have no intention of letting the regime collapse, or of opening their society to democracy.
I think this will make them desperate, and unpredictable.
The mullahs are bribing the people by keeping oil and gas cheap. Iran is a house of cards and the only question is will it fall before they get a chance go nuclear.
Another reason we went in to Iraq is to stress out Iran and their puppet Syria.