Sunday, March 9, 2014

The Petroleum Ministry

Gloomy, imposing, inaccessible. And, obviously, forbidden to photograph. In a way, and with all due differences, the Iranian Ministry of Petroleum reminds Star Wars’ Death Star…

The last century’s history of Iran is very much linked to the history of oil in Iran.

Oil was discovered in Iran in 1908 by the British. The discovery of oil led to the formation of the Anglo-Persian company, but by purchasing a majority of the company' shares in 1914, the British government gained direct control of the Iranian oil industry. In 1933 a 60-year agreement was signed between Iran and Britain establishing a flat payment to Iran for every ton of crude oil exported, and denying Iran any right to control oil exports. But in 1950, the at that time Prime Minister Mohammad Mossadegh decided to nationalize the petroleum industry, and formed the National Iranian Oil Company. Two years later, in 1953, the British and the US governments organized a coup d’├ętat which brought back to power Reza Pahlavi, the Shah, as absolute monarch. The rest is recent history, with the Islamic Revolution of 1978-79, the war with Iraq, and, most recently, the US and UN sanctions…

Today, with approximately 150 billion barrels proven oil reserves (about 10% of world’s total proven petroleum reserves), and 4 million barrels daily oil production, Iran ranks at the third and fourth place worldwide as far as proven reserves and oil production is concerned. And just to give you an idea of how important is oil in Iran, oil proceeds represented about one fifth of the Iranian GDP, and accounts for about 60% of total national budget and 80% of the total annual value of both exports and foreign currency revenues.

If these numbers do not make much more sense for you, just do know that - if I well made the currency conversion - a litre of fuel here costs about US$ 0.33 cents!

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