Iran's oil and gas sector is currently experiencing conditions that remind us of what happened in Iraq during the Saddam Hussein years, when the sector was destroyed by sanctions and successive wars, a process of destruction culminating with the American-led invasion. Iraq's oil sector has yet to recover from the impact of this experience and Iraq will require years of efforts and investments to regain its previous productive capacity. Iraq has the second-largest reserves of crude oil among the countries of OPEC, after Saudi Arabia. Today, the oil and gas sector of Iran, which is OPEC's third-largest producer, is deteriorating, although it has the world's second- or third-largest reserves of natural gas. The squandering of the resources of the Iranian and Iraqi peoples is painful. How is the Iranian President Mahmoud Ahmadinejad failing to read recent history and see that his regime is helping the destruction of its oil industry and natural gas wealth for years to come, in pursuit of a nuclear bomb that will only increase poverty and economic deterioration in a country rich in its resources, its people and its heritage? Iran is yet to feel the impact of the new American and European sanctions on the oil and gas industry. However, Iran's oil production has been affected for years by sanctions on banking, finance and spare parts, and the low level of foreign investments to develop this sector, as a result of the Iranian regime's policies. Iran's production currently stands at its maximum level, namely more than 3.5 million barrels a day. However, Iran is depleting the capacity of its oil fields, which are not seeing any investments to develop them and to compensate for the quantities that have been extracted. Recent OPEC studies indicate that during 2009 and 2010, there has been a huge drop in gas reinjection in these oil fields and hence, in developing them. This level has dropped by 32 percent compared to 2008. While Iran has the second- or third-largest reserves of gas in the world, it is now importing more gas from Turkmenistan than it exports to Turkey. Because of the Iranian regime's demagoguery, the Iranian authorities have begun to subsidize gas and gasoline, to the point that domestic consumption has begun to require huge import levels of these items in parallel. Now, and ever since a number of international firms have stopped selling gasoline to Iran because of the American, and now the European, sanctions, Iran will suffer from a large shortfall. This might oblige it to depend more on smuggled items, with high prices affecting the Iranian people as well as the regime, even if the needed supplies are secured. Several companies, including Dutch Shell, Spain's Repsol, France's Total and Austria's OMV, began bids to develop the giant Pars field, so that Iran can become a chief exporter of natural gas. However, they have pulled out, for political or commercial reasons, which prevented an agreement on economically satisfying contracts. Iran wants to develop a nuclear bomb, even though it is totally dependent on the outside world in its oil and gas sector. How will it secure the needs of the Iranian people for gas and gasoline then, under the sanctions? How will it explain to its people that a leading OPEC country suffers from electricity shortages during the hot summer? How will the Iranian leadership fund all of the plans it wishes to launch in the sector, which will suffer from banking and financial sanctions? President Ahmadinejad has announced a plan to develop the oil and gas sector for the coming years, worth $43 billion. How will he procure such an amount, with all of the banking complications that have resulted from the sanctions? Iran is following in the footsteps of Iraq under Saddam Hussein, as it prefers to squander the oil and gas resources of its people, instead of providing them with a dignified and comfortable life, which they require.
