Iran admits oil production hit by falling investments

Iran_oil

Iran says its crude production has dropped due to a lack of investments in its oilfields.

"Compared to last year there was an insignificant drop in our crude production due to lack of investment in developing oil fields," Deputy Oil Minister Ahmad Qalebani was quoted as saying by the ISNA news agency. Qalebani did not provide a figure for the fall in output.

Iran has not previously attributed falling output to a lack of investment. Most foreign oil companies are avoiding Iran's energy sector because of sanctions.

Iran, the world's fifth-largest crude exporter, currently produces 3.5mn bpd, but hopes to boost its output to 5.1mn bpd by 2015.

European concerns

Concerns over the OPEC producer's nuclear program have increased since a group of students stormed the British embassy in Tehran. Britain closed its embassy and expelled all Iranian diplomats from London.

Several other countries recalled their envoys, including France, Germany, Italy, Spain and the Netherlands.

The European Union is considering a ban - already in place in the US - on imports of Iranian oil, although diplomats and traders say awareness is growing in the EU that a ban could potentially damage the bloc's economy without doing much to undercut Iran's oil revenues.

Iranian warning

Iran has warned any move to block its oil exports would more than double crude prices.

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