year 2017 was a tough one for Iran's petrochemical industry. Iran spared no
effort to tempt back foreign investors that had been scared away from investing
in Iran. In this year Iran sought to prove security of foreign investment and
its mutual benefits. Increased petrochemical production and export and
inauguration of new petrochemical projects bear proof to Iranian officials'
assertions about this industry.
Norouzzadeh, CEO of Iran's National Petrochemical Company (NPC), said Iran
sought, in 2017, to encourage foreigners to invest in Iran's petrochemical
attracting foreign investment, we are seeking to use modern technologies in the
development of petrochemical industry," he said.
said foreign investors had been coming to Iran in the wake of signature of
Iran's landmark nuclear deal officially known as the Joint Comprehensive Plan
of Action (JCPOA) with six world powers in 2015.
are in talks with renowned companies for investment," he added.
full compliance with the JCPOA has neutralized US President Donald Trump's
threats to penalize foreign companies willing to invest in Iran.
Iranian officials have indicated, no negative feedback has been seen in the
talks between Iran's petrochemical industry and foreign companies.
have learned to turn threats into opportunities. Startup of numerous projects
in South Pars gas field and inauguration of petrochemical projects during years
of sanctions are cases in point. So far, 11 memorandums of understanding and
agreements have been signed with foreign companies in petrochemical sector.
France's Total, Germany's Linde and BASF, France's Air Liquide, Royal Dutch
Shell, Japan's Sojitz Corporation, South Korea's Hyosung and China's Hui Xiang
have signed MOUs with the NPC. Furthermore, two financing agreements have been
signed with Japan's Itochu and Marubeni.
faces no restrictions in negotiations with foreign companies, but Zionist
regime companies are the only redline in economic talks.
Ali-Morad, director of foreign investment at NPC, said: "We hope that in
the early 2018, we would sign foreign direct investment with [renowned European
an agreement is reached, European companies will participate in a petrochemical
project in Iran.
said the major challenge faced by the NPC in 2017 was to promote Iran's
petrochemical industry in the world, following the removal of sanctions.
sanctions caused foreign companies to leave Iran and remain unaware of
strategies of development in Iran," he added.
sanctions slowed down the trend of development of petrochemical industry, but
this move was never halted.
implementation of the JCPOA opened doors to foreign investment and negotiations
with foreign companies were held in rapid succession. However, the main point
is that many companies were unaware of growth and development of Iran's
petrochemical industry during years of sanctions.
foreign companies wanted us to introduce our strategies for development of
petroleum industry, particularly petrochemical sector, and our development
plans in this sector to them. It took us a long time," said Ali-Morad.
said the NPC had been quite successful in doing so, expressing hope that the
endeavors made in 2017 would come to fruition next year.
hope that in 2018 foreign companies, having got familiar with Iran's
petrochemical sector, would directly invest in Iran's petrochemical industry,
and leading European banks and top international institutes would effectively
contribute to financing projects," he added.
Firms Ready to Invest in Iran
said this year, leading foreign companies like Shell, BASF, Total, Air Liquide
and Linde expressed their readiness for contributing to the development of
Iran's petrochemical industry. "That shows the attractiveness of the
industry for foreign investors," he said.
sixth Five-Year Economic Development Plan stipulates that Iran's petrochemical
industry needs around $40 billion in investment for development. Foreign
financial institutes and European banks are expected to make contribution.
this reason, NPC officials have been attending international seminars in order
to introduce the projects of this industry and promote Iran's petrochemical
hopes to encourage foreign investors to bring cutting edge technologies into
Iran and convince foreign banks to finance petrochemical projects.
and financing of projects are two separate issues. In the financing of
projects, after banking facilities and loans are granted to applicants, the
loans would be reimbursed from revenues of projects. But when investment is at
stake, companies are directly involved in funding or operating projects.
said Chinese companies had expressed willingness to finance Iranian
petrochemical projects due to the profitability of projects and assurances
about the repayment of loans.
the US has yet to respect its obligations under the JCPOA European companies
have shown stellar performance. That is why banking relations between Iran and
foreign countries are growing from day to day."
expressed hope that a consortium of European banks and international financial
institutes would be established in 2018 to finance one petrochemical project.
that comes true, it could be the starting point for the financing of
petrochemical projects in Iran," he said.
for Investment in Iran Petchem
said number of requests for direct investment in Iran's petrochemical industry
to their assurance about the NPC, foreign companies are willing to have this
company as partner in their projects. Meantime, we are willing for Iran's
private sector to be involved in the projects and have a prominent role. That
is why we are witnessing long drawn-out talks between foreign companies and the
private sector," he added.
example, two renowned foreign companies that are willing to invest in
industrial gas production in Assaluyeh and new zones like Qeshm and Parsian
believe that NPC partnership with them would be an advantage that would reduce
risks," said Ali-Morad. "But we still insist that foreign companies negotiate
with Iran's private sector. We are trying to remove barriers and bring these
companies closer to the private sector, and the NPC would make planning and
detect the development of industry. However, foreign companies see the state
sector's presence the key to development."
Far Asia to America
to low-cost feedstock, access to high seas, specialized manpower and low-cost
workforce are among advantages of Iran's petrochemical industry that help
reduce the cost price of petrochemical products in Iran. This advantage has
been taken into consideration by investors.
Ali-Morad said surveys
by the NPC and European companies had found that Iran was the only country in
Asia to have access to proper feedstock. "In light of neighboring
countries, Iran is also faced with a growing market and it can help attract
Courtesy of Iran Petroleum