10-01-07 The United States is quietly gaining ground in little-publicized attempts to block international cooperation with Iran in developing its oilfields, a report wrote.
Citing unnamed analysts, the report said the US campaign to dry up financing for oil and natural gas development poses a threat to Iran’s ability to continue exporting oil over the next two decades. The campaign comes at a moment of unique vulnerability for Iran’s oil industry, which also faces challenges from rising domestic energy consumption, international isolation, a populist spending spree by President Mahmoud Ahmadinejad and trouble closing contracts with foreign oil companies, the report said.

Control
“If the government does not control the consumption of oil products in Iran... and at the same time, if the projects for increasing the capacity of the oil and protection of the oil wells will not happen, within 10 years, there will not be any oil for export,” Mohammed Hadi Nejad-Hosseinian, Iran’s deputy oil minister for international affairs, told.
If Iran were to suddenly stop exporting its 2.6 mm barrels of oil a day, such as in the event of a military strike, world oil prices would probably skyrocket.

But a gradual decline could probably be offset by other OPEC members, particularly as Iraq increases its oil production and Saudi Arabia carries out plans for significant increases in its production capacity, according to the report. The efforts by the United States and its allies to persuade international banks and oil companies to pull out of Iran threaten dozens of oil and gas projects, including plans for development of Iran’s two massive new oilfields that stand to expand oil output by 800,000 bpd over the next four years.
“Many European banks which had accepted financing some oil industries projects have recently cancelled them,” Nejad-Hosseinian said.

In addition, banks are no longer granting letters of credit for delivery of some supplies, the report pointed out. Nejad-Hosseinian said Iran has recognized the gravity of the threat and has launched steps to head it off, including new “smart” rationing cards scheduled for distribution in March to check skyrocketing sales of cheap gasoline and an overhaul of Iran’s historically stingy contract terms in an attempt to lure big oil companies into skirting the US roadblocks.
Iran is also hoping to turn to China and Russia for help. But US officials have already warned that they will seek to hold China accountable under Washington’s unilateral sanctions laws if it proceeds with a $ 16-bn project to develop Iran’s North Pars gasfield.