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Friday, December 12, 2008

Iran crisis: Aging oil infrastructure could cripple its economy

LONDON — Iran has invested heavily in the development of strategic weapons but faces a looming crisis that could force a sharp cut in the crude oil production upon which its economy depends.

A report said Iran, the second largest producer in OPEC, could reduce oil production by 25 percent and suspend exports by 2015.

The report by the Singapore-based Facts Global Energy said Teheran has been plagued by aging fields and lack of infrastructure, Middle East Newsline reported.

"Without a major change in policy and investment climate in Iran, crude oil production and exports are projected to decline drastically in the future," the report said.

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In 2007, Iran produced 4.02 million barrels of oil per day. But the report said that without infrastructure modernization, Iranian production could drop to three million barrels per day by 2015.

The report said the envisioned production rate would not allow for exports.

"The incremental supply that Iran is promising to the world will simply not be available," the report said.

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