| Fossil Fuel
Relying on single source of revenue such as oil, was a wrong policy
from day one. Iran is a big country, with good productive lands
and enough water sources (if it is used properly).
It has been estimated that Iran is sitting on 83 -85 Billion (thousand
millions) barrels oil. It means one eleventh (1/11) of world oil.
Iran's oil has been abused over years in particular over last
21 years, through wrong agreements and wrong handling of oil wells.
(to read more about typical
agreement go to foot
An oil well requires to be pumped (injected) by gas so that a
comprehensive and total production is achieved. Over last 21 years
due to Iran-Iraq war and lack of knowledgeable technicians
(most migrated to other
countries) most oil wells inside
plateau of Iran have died or are about to die.
This wrongdoing reduced the reserved capacity to 42 Billion barrels.
Iran is the second producer of gas (natural gas). This product requires
planning and pipeline.
While Iran was busy in war and struggling with its interior turmoil,
the U.S.A. in collaboration with Turkey signed an important agreement
with separated states of Russia, at north of Caspian Sea (Mazandaran
Sea), which are the most richest oil territories. It is notable
that most of oil in this region is located on Iranian shores.
First oil well reached production in 1908 in Masjed Soleyman (Iran).
Until 1953 the total revenue in Iranian hands was almost $360,000,000.
Whereas England received 12 times of this amount reaching ($360,000,000
X 12 = $4,320,000,000), which is a lot of money for England!
Iran's revenue through sales of oil between 1953-1979 is estimated
at $35 Billions. Estimated revenue between 1979-1999 is $290 Billions.
As you have noticed I have based the starting point at 1953
(People uprising against Mossadegh, returning Shah = 28 A'mordad).
This uprising set the starting point of
so called revolution at 1979.
The growth that Iran experienced between 1953 - 1979 amounting
to $35 Billions is enormous if it is compared to the growth that
was experienced during 1979-2000 of $290 Billions.
Who do you think benefited from this
big chunk of money?
Most part of this National Revenue have been abused by "Mullas"
to purchase guns and ammunition during Iraq-Iran war or have been
used through different arrangements!
Iran must change it's strategies and should produce more of farm
products. Once Mohammad Mossadegh (Prime Minister prior
to 1953 uprising) tried and failed reducing the nation's debt to a minimal without
using the oil revenue. During period which the miss-management of
the Mossadegh regime forced the country stepping into recession.
Shifting from dependency on oil income will not be an easy task.
Technology, expertise, professionalism and comprehensive strategic
planning are required.
Iran has many other resources. If appropriate and modern irrigation
technique is used, the farming alone can easily replace big part
of the oil revenue.
Relieving Iran from single source of
Relieving Iran from its single-product economy is a posing challenge.
Iran's economy very much anchors on oil, since it is the major source
of National Revenue. The income from this Natural Resource has also
become the source of much dependency for the nation.
Iran have lost level of production of crude oil both at offshore
and onshore this adversely affected its income. This is due to a
delay in the implementation of oil projects, in simple word;
due to wrongful and insufficient investments in oil infrastructure
Iran's internal current economic situation has not kept pace with
the global economic developments. International market has changed
its strategy in usage of fossil fuel. Nowadays, the optimal utilization
is the main issue.
Since Nationalization of the Oil Industry (1951) no major amendment
has been made to Iran's oil research, development, export and employee
training. Although, Iran relies heavily and rigidly on oil
revenue, no major planning has taken to consideration, in particular
during the years 1979-2000.
Iran was a major player in OPEC. Its domestic mismanagement has
converted the oil into a single source of income. Members of OPEC
were forced to give up on the price and to increase the uncontrolled
Because of certain kinds of turmoil in structure of Iran's government
since 1979, they have not been able to respond to the rapid developments
in the regional and international oil industry. Consequently, Iran's
oil wells have lost the production almost 30-50%. In order
to meet its real export level in OPEC, Iran needs to make a dramatic
change in the management of its oil policy.
An immediate plan to train new experts and develop engineering
systems are an absolute necessity to fully mobilize the present
resources. Iran's oil and gas export, revenue and management figures
do not appear to be realistic.
Presently, most revenues from oil are used to purchase unnecessary
items or lost to un-explained expenses within various levels of
government such as National Iranian Oil Company (NIOC), ministry
of finance and ministry of oil. Not to mention the major conflicts
among levels of the existing theocratic government. Whereas
the crude oil price is dropping substantially. Iran's dependency
on oil is increasing dramatically. At this level Iran is unable
to produce by-products and invest in other industries to liberate
the nation from one source of income.
Nowadays it has become necessary to undertake a comprehensive
study and series of planning to liberate Iranian revenue from single
source of income.
If nation wide irrigation is modernized,
modern technical cultivation and farming is developed, by-products
to oil industry is expanded, petrochemical industries are developed,
production of hydro energy is increased, utilization of natural
gas is expanded, development and export of other resources are added
to Iran's trade, soon dependency in one source will be achieved.
Consequently, motivation of foreign nations who have been
interfering in Iran's internal affairs
(Foot note 2)
will be diminished.
Such a shake-up will firstly lead to competition amongst affiliated
investors and certainly would create incentives for better performances.
Secondly, the by-products of oil, farming and other resources will
contribute to the nation's revenue and will liberate Iran from keeping
its eggs in one basket.
We must have learned our lesson from past, in particular the very
expensive lessons that Nation learned in the period of 1979-2000.
US sanctions against companies investing in Iran, fast shifting
of industrial world to replace oil by another source of energy,
loss of income and increase of dependency is enough to wake-up the
policy makers of the country.
Unfortunately heavy investments in Iran's petrochemical sector,
nuclear power and other projects, which started well before 1979,
have not yet flourished. Apparently, it will take years for the
investments to yield profits.
Iran has the capacity to produce its own farming products If supported
by central government, independent investors will be motivated,
and certainly are capable to contribute to the economy. It is provident
that any government, including mismanaged Islamic government cannot
be a good investor and business body, therefore will not be able
to handle projects efficiently and profitably.
If this is not taken into immediate consideration, soon Iran will
face a gradual decline. As predicted, shall drop to the bottom of
list of liveable countries. Iran must pay proper attention to non-oil
exports. It is necessary for all sectors to enhance their share
in the country's non-oil revenues. This requires rational planning,
investments and sustained regulations.
The nation has proved that it has capacity and potentials to achieve
a remarkable growth; not only in politic, but in invention, industry
and most importantly towards liberating the country from dependency
on the oil.
There is a high rate of visible investors in non- oil industries
and non-oil who are capable of adopting of pragmatic approaches.