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Team Fuji

Foreign policy of Iran N atural resources and development of nuclear energy : what impacts ?. Team Fuji. Summary. A) Natural resources B) Role of Nuclear C) Impact on international relationships Current crisis with Occident (USA, West Europe) Strong relationships with Russia

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Team Fuji

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  1. Foreignpolicy of Iran Natural resources and development of nuclearenergy : what impacts ? Team Fuji

  2. Summary • A) Natural resources • B) Role of Nuclear • C) Impact on international relationships • Current crisis with Occident (USA, West Europe) • Strong relationships with Russia • Complex relationships with China

  3. A) Natural resources(1/5) • Main natural resources • Low agricultural activity (cereals, rice, fruits, cotton) but very active fishing in spite of the droughts. • food self-sufficiency • Exportation of few other products (flowers, dattes, caviar). • The most important resources remain mineral (iron, copper, bauxite, brown coal) but also energetic ones (natural gas, oil).

  4. A) Natural resources(2/5) • Oil Industry • Iran is a member of the Organization of the Petroleum Exporting Countries (OPEC). • among the world’s top 3 holders of both oil and natural gas reserves • OPEC’s second-largest producer and exporter after Saudi Arabia • fourth-largest exporter of crude oil globally after Saudi Arabia, Russia, and Norway.

  5. A) Natural resources(3/5) • Oil Industry • Tensions in Iran reintroduce an element of geopolitical risk in the oil price. • Iran plans to increase oil production capacity to over 4.5 million bbl/d by 2010 and 5 million bbl/d after 2015, but foreign assistance will likely be necessary. • Foreign investment in Iran’s energy sector has been tempered by international unease related to US economic sanctions. • Today Iran has contracts with companies such as Norsk Hydro from Norway, Lukoil from Russia, OMW from Austria, Impex from Japan and CNPC from China, and even Total.

  6. A) Natural resources(4/5) • Gas Industry • According to Oil and Gas Journal, Iran’s 2008 estimated proven natural gas reserves stand at 948 trillion cubic feet (tcf) : second after Russia. • Roughly two-thirds of Iranian natural gas reserves are located in non-associated fields, and have not been developed. • Natural gas consumption is expected to grow around 7 percent annually for the next decade because Iran does not currently have sufficient refining capacity to meets its domestic gasoline and other light fuel needs. • Due to the poor investment climate, some international oil companies including Repsol, Shell, and Total have divested from Iran’s natural gas sector. In response, Iran has looked toward eastern firms, like state-owned Indian Oil Corp. China Petroleum & Chemical Corporation, and Russia’s Gazprom to take an increased role in Iranian natural gas upstream development • Under Iran's buy-back scheme, foreign firms hand over operations of fields to the National Iranian Oil Company (NIOC), and after development they receive payment from natural gas production to cover their investment.

  7. A) Natural resources(5/5) Distribution of the hydrocarbon resources

  8. B) Role of Nuclear(1/4) Develops its nuclear program to generate electricity to meet Iran’s future consumption needs

  9. B) Role of Nuclear(2/4) The UN and various other interested parties are keenly monitoring Iran’s use of nuclear fuel and technology. First nuclear power plant of 1,000 MW to be built at Bushehr with Russian assistance. operations planned to begin in 2010. Russia providing fuel under an agreement signed in early 2005. Iran plans to develop 7,000 MW of nuclear-generated electricity by 2020. Construction of 10 more enrichment plant as big as its current facility at Natanz, which has 8,000 centrifuges running and plans to increase the number to 50,000.

  10. B) Role of Nuclear(3/4) • Major burning issues between Iran and Western countries There is a consensus that Iran has a right to peaceful nuclear technology. Western intelligence attributes weapons activities and motives to current policy. Limited the International Atomic Energy Agency’s (IAEA) inspectors’activities. Threatened to withdraw from the Nuclear Non- Proliferation Treaty. Most Iranians dislike the hectoring and arrogant tone adopted by the US between 2003 and 2008. Ahmadinejad’s provocative behaviour

  11. B) Role of Nuclear(4/4) Undermined Tehran’s claims to have peaceful intent ? Discovery of a new enrichment site near Qom early October 2009 :talks breakthrough in Geneva meeting between Iran and the P5+1 Agreement to send a significant quantity of its stockpile of low-enriched uranium (LEU) for further enriching and processing in Russia and France Defused the international tension December 2009 : «  Iran will produce 20 per cent fuel and anything else it needs  », Ahmadinejad 12/16/2009 : provocative Iran's test-firing of an upgraded version of its most advanced missile, said to be able of hitting parts of Europe

  12. C) Impact on international relationships • Current crisis with Occident (USA, West Europe) (1/3) • Enrichment of Iranian uranium • The international community fears that Tehran is seeking to produce usable fuel for military purposes. • 2009/12/16: new (successful) test of the iranian ballistic missile Sejil-2. Iran can hit Israel (2000 km range).HOW DO THE WESTERN COUNTRIES REACT ?

  13. C) Impact on international relationships • Current crisiswith Occident (USA, West Europe) (2/3) • Suspicion : 2009/11: the International Atomic Energy Agency (IAEA) condemns Iran threat of new international sanctions for concealing the construction of a second plant to enrich uranium. • A helping hand: Agreement Project of the IAEA: Iran would get its low-enriched uranium enriched by another country's and get in return fuel for its research reactor (objective : visibility of Iranian enrichment capability). Tehran refuses • Confession: 2009/12: Iran confirms enrichment goes on 5 resolutions referred by the Security Council of UN, 3 accompanied by sanctions

  14. C) Impact on international relationships • Current crisiswith Occident (USA, West Europe) (3/3) • Challenge: 2010/01/02: Proposal to exchange its 400 kg of 3.5% enriched uranium with nuclear fuel for its research reactor (Kish Island). • Ultimatum and ultimate degradation of relations with Occident : 2010/01/03 : « The Islamic Republic has decided to produce the fuel it needs for its Tehran reactor if it doesn’t obtain it" (from outside). ManouchehrMottaki A deadline is set at the end of January to reach an agreement on exchange of nuclear fuel with the Group 5 +1 (U.S., Russia, China, France, Britain and Germany). "If the international community is not decided before that deadline "Tehran enrich uranium to a higher level. This is an ultimatum. «  2010/01/04: French Minister of Foreign Affairs Bernard Kouchner : "No, we can’t do this. "

  15. C) Impact on international relationships StrongrelationshipswithRussia (1/2) • A recentpartnership • Persian empire continuallyinvaded by Russiaduring the 19th century • In the reign of Shah : Iran is a strongally of the USA against the USSR • During the 80’s : USSR sellsweapons to Irak for the Irak-Iran war End of USSR : Russianowsellsweapons to Iran throughout the 90’s • A mutual struggle against the USA • Ensure a new global multilateralism • ReinforceRussian and Iranian influences within the Middle-East • Termination of the June 30th 1995 contract Russianmonopoly of the Iranian weaponmarket Russianweapons American weapons American weapons

  16. C) Impact on international relationships StrongrelationshipswithRussia (2/2) • OtherRussianinterests • Obtain an Iranianneutralityconcerning the Chechnyaconflict • Fightagainst international Sunnite terrorism and muslimterrorism in Russia • Help to redefine the Russian national identity (15% of muslims) • Solve national security issues • AllowRussia to becomeagain a major international nuclearplayer • After the OPEC, the creation of an « OGEC » ? • Russiaisfightingagainst Nabucco project • Head for a gasmonopolywithin EU • Iran-Russiapartnership for the gasmarket • Gazprom builds a gas pipeline for • Iran, connectingit to Pakistan • and India • Iran abandons the EU gasmarket

  17. C) Impact on international relationships Complexrelationshipswith China (1/2) • Rebalancing the global order ? • Iran has become an observer of the Shanghai cooperation organisation willbecomeprobablysoon a member • Iran could help China’s goals to restrict the American monopoly and the highpoliticalinstability in the Middle-East • China stronglyfears the consequences of an American militaryin Iran Shanghai cooperation organisation

  18. C) Impact on international relationships Complexrelationshipswith China (2/2) • Mutual commercial interests • Development of transport infrastructures in Central Asia, built by China since 2000 • A future Iranianmarket of 90 millions of consumers • Iran isChina’s 4th oil supplier, but these imports stagnatetoday Yadavanoilfield : Sinopec and CNPC are investing • Some main difficulties for a strongpartnership • Israel : second weapons supplier to China afterRussia ! • 60% of China’soil imports come from PersiangulfArab countries • Iranian exports : lack of highquality industrial infrastructures in Iran • Russiaismanipulating the wholeAsian gasmarket favourRussian or Iraniangas ?

  19. Team Fuji Thank you! Your questions are welcome

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