ENERGY

Foreign firms scramble to fix Iran’s refineries once sanctions end

An Iranian oil worker walks at Tehran's oil refinery south of the capital in Iran. (File photo: AP)

International oil services companies are scrambling to win contracts worth tens of billions to repair and modernize Iran’s oil refineries once sanctions are removed, with officials even laying on bus tours for visiting foreign executives.

Officials from Iran's oil refining company NIORDC, its National Petrochemical Company and the privately owned Persian Oil and Gas are holding talks with services firms to clinch projects to repair Iran's derelict refining and petrochemical sector.

Iran badly needs to complete modernization plans that ground to a halt after sanctions hit the country five years ago over its nuclear program.

The projects are worth at least $100 bln, according to sources close to firms that have held talks in Iran.

The talks accelerated after a nuclear agreement between Tehran and world powers in July paved the way to lifting sanctions.

Sources close to the talks said Iran is moving forward with its pre-sanctions goal to refine more of its own oil and upgrade its petrochemical plants, with a view to boosting earnings.

Iranian officials have already held meetings with a string of international companies to outline their plans, and even organized group bus tours for service companies to visit refineries, according to industry sources.

Business prospects in the sector were also discussed during a string of trade visits from Italy, Germany, Japan and other countries in recent weeks.

'Great potential'

“There is also great potential in the modernization of existing plants for extraction and processing of raw materials and the infrastructure sector,” Wolfgang Büchele, Chief Executive Officer of German gas and engineering company Linde , told Der Spiegel magazine after visiting Tehran as part of a German delegation led by Minister of Economic Affairs Sigmar Gabriel last month.

Oil services companies that had been active in building refineries in Iran prior to the sanctions, including Australia’s WorleyParsons, France’s Technip and Axens, South Korea’s Daelim and China’s Sinopec Engineering were all interested in resuming business in the country, the sources said. The companies declined to discuss whether they are meeting in Iran.

Iranian Petroleum Minister Bijan Zangeneh said last month that the Islamic Republic planned to invest $80 bln over the next 10 years to upgrade and expand its petrochemical sector.

Repairing the country’s 10 oil refineries would likely generate $100 mln in projects for international companies in the short-term, according to industry officials and analysts.

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Last Update: Monday, 17 August 2015 KSA 17:56 - GMT 14:56
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Foreign firms scramble to fix Iran’s refineries once sanctions end
Repairing the country’s 10 oil refineries would likely generate $100 mln in projects for international companies
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