Iran to miss OPEC oil production target

Al Jazeera has an interesting article today regarding Iran’s oil production. From Al Jazeera.

“Iran is set to miss its production target of 500,000 million barrels of crude oil by 2010 due to a lack of investment in ageing oilfields.”

Quoting Gholam Hossein Nozari of Iranian National Oil,

"We are not close to the 5 million bpd target of the fourth plan. More than 80% of the current total oil output is being provided from aged oilfields that need serious investment to increase production,"

Al Jazeera goes on to state,

“Major development plans of oilfields that need substantial foreign investment have been held up by protracted negotiations between Iran and foreign investors over disputes on the rising costs of operations.”

This is all interesting given the following:

1. Iran has not been investing in it own oilfields.

2. 80% of Iran’s oil output is from aged fields that need development to extract more oil.

3. Development of these fields needs foreign investment.

4. Foreign investors are wary of rising development costs in Iran.

This sounds eerily familiar to Venezuela since Chavez took power.

It is interesting how a country that needs foreign capital and technology to develop its oil sector can have income to expend on nuclear technology (which in Iran's case will cost 27% more than using its own oil) and Hezbollah militants in Lebanon.

It is also interesting how a leader of a country that needs western technology can be so adamant against the very people he needs to help upgrade his oil fields.

Since Chavez took power in 1998, Venezuela production has decreased by 50%. Expect Iran’s production to decrease in the future also. This does not bode well for future gas prices.

However, these destructive regimes will implode soon enough. Both have growing unrest in their respective countries. These are two regimes that only need a budge to implode.