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Iran Economy Update
Issue 21/2017
WEDNESDAY FEBRUARY 15TH
Iran ready to supply gas to all neighboring country: deputy minister The Petroleum minister’s deputy for international affairs said that Iran is ready to provide national gas for all the neighboring countries. Shell, Total and Mitsubishi have put forward proposals in the form of a consortium for building a pipeline carrying Iran’s gas to Oman, Amir-Hossein Zamani- Nia told ILNA. Zamani-Nia made the comment on Tuesday, one day before the trip of President Rouhani to Oman and Kuwait. Mehr news on Wednesday quoted him as saying that exporting gas to the neighboring countries is one of the priorities of the Islamic Republic. “Exporting natural gas to the neighbors, India and China is even of higher importance than supplying gas to Europe,” he said. He also said Iran is ready to export gas to Kuwait. On 19 Dec 2016, NIGC Managing Director Hamidreza Araghi had told Fars news that Iran and Kuwait are in serious talks on gas supply.
In January 2016, Petroleum Minister Bijan Zangeneh had visited Muscat to move negotiations on a $60-billion-worth 25-year gas export forward. The deal signed in March 2012 during President Rouhani’s visit of Muscat but its implementation was postponed to the post-sanctions era when restrictions for building pipeline and money transfer are lifted.
In his trip to the two Persian Gulf nations, President Rouhani is accompanied by a high-ranking delegation and his trip is at the invitation of Oman’s king for closed-door talks on regional and trade issues. Just before departing for Oman and Kuwait, Rouhani said that the latter had recently sent a message to Iran on behalf of the 6
GCC countries on their intent to resolve misunderstandings through dialogue.
Eghtesad News, a Persian language Iranian economic news website wrote today that in his trip to these two regional countries, Mr.
Rouhani pursues three purposes:
developing bilateral relations and using their potentials to play the role of mediation for improving Iran’s relations with the GCC members, delivering the message of Iran to Saudi Arabia and other regional nations on the Islamic Republic’s desire to hold serious and direct talks, and emphasizing on the necessity of pursuing “regionalism and Iran’s multilateralism in the Trump era.”
Eghtesad news also discusses that Rouhani is likely to raise the two issues of Iranian gas exports to these countries as well as the issue of Iran’s frozen money parked in Oman. “During the nuclear negotiations time, about $5 billion worth of Iran’s money were released under several occasions and were transferred to Oman but since then, such money has been blocked there and the Omanis say they are not able to repay the sums,” wrote Eghtesad News.
Minister of Road & Urban Development to be impeached by Majles on Sunday Parliament Speaker Ali Larijani confirmed on Tuesday that the Majles session to impeach minister of Road & Urban Development Abbas Akhundi will be held next Sunday. On 12 Dec 2016, Tasnim news agency had published 12 reasons the 80 signatory lawmakers have given for Akhundi’s impeachment which include:
1. The occurrence of two fatal accidents in the country’s railway system in the past two years,
2 2. the minister’s decision to re-employ a
retired manager who committed economic offences after resuming his work at the ministry,
3. The minster’s economic activities and his own involvement in construction business, and also the role he has given to his son in clinching deals
4. Calling the Mass House Construction program (initiated by the former president Ahmadinejad) absurd (ridiculous) without introducing an alternative mass house building program
5. Conducting clandestine negotiations for buying airplane and refusing to inform the Majles’ relevant commissions about details of deal
6. Pursuing political goals and launching political parties instead of doing his ministerial duties
7. Lack of transparency in the airport sector contracts
8. Halting investigations on the reasons for the crash of an Antonov airplane (occurred in August 2014)
9. Occurrence of four air and rail crashes during his ministerial term
10. His responsibility for the death of 19 soldiers in bus accident in Fars Province (occurred in June 2016)
11. His decision to prevent resignation of the then president of Civil Aviation Organization who was recognized as responsible for the crash of the Antonov passenger plane (in August 2014) 12. The international corridors that could
have passed across Iran have run through alternative routes, due to the procrastination behavior of the ministry.
Total says will wait for sanctions waiver before finalizing $2.2bn deal with Iran On February 9, media quoted a French Total official as saying that this company is waiting for an extension of the waiver on US sanctions against Iran before it makes final decision on a $2.2 billion investment in a gas project in the country. Total’s Chief Executive Patrick Pouyanne told media in Paris that the waiver, first introduced by
President Obama, should be renewed before this summer and should last for another 18 months.
Such remarks elicited reaction from Petroleum Minister Bijan Zangeneh who in a TV interview aired on Tuesday said “[before implementation], the agreement with Total need to enter into contract that will take place in two months. Negotiations continue.
Total has recently taken some considerations into account and said that it will pursue the EU policies if Trump imposes sanctions against Iran. It is not justifiable to me why they have pressed the issue.
Currently, the agreement is at the technical and commercial stage.” Zangeneh said his ministry has raised this issue with the ministry of Foreign Affairs and Mr. Zarif has conveyed the issue to Ms. Mogherini.
MEED Iran news coverage
Iran Air to receive second Airbus jet MEED - 13 Feb 2017
France’s Airbus is due to deliver the second of 106 commercial jets on order from Iran Air soon, according to local media reports citing François Sénémaud, France’s ambassador to Iran. This follows the release of $100m in down payment for two planes, the reports said. The first plane, an A321, was delivered on 12 January. It joined the fleet of flag carrier Iran Air catering to domestic flights. Airbus’ publicly viewable database of plane orders and deliveries as of 31 January showed a total of 106 commercial aircraft on order from Iran Air.
Iran Air Airbus Fleet Status
order delivered operations
A320ceo 6 6
A320neo 32
A321ceo 8 1 1
A300 8 8 11
A310 2
A330-200 8 A330-900 28 A350-100 16
Total 106 9 20
Source: Meed.com
3 The original announcement made in 2016 indicated that the order was for 118 planes estimated to cost $25bn at list price. The type and number of aircraft to be purchased have since been scaled down. The latest order excludes the superjumbo A380 planes, which is understood to have halved the original order value. The contract to purchase 80 planes from the US’
Boeing was signed in December last year.
However, it is understood that the first deliveries will commence only in April 2018.
The Iranian government has said it needs up to 90 planes annually over the next few years to reinvigorate its aviation sector.
Years of sanctions have left the country with old and poorly maintained aircraft, which have resulted in multiple fatal accidents in recent years.
MEED Iran news coverage
Iran-Malaysian sign preliminary agreement to study oil/gas fields
MEED – 12 Feb
NIOC has signed a preliminary agreement to carry out studies on two southern Iranian fields with a private sector Malaysian firm.
Bukhary International Ventures (BIV) signed a MoU with NIOC to study the Golshan and Ferdowsi fields in the south of Iran. The Malaysian firm first signed a buy-back service contract with NIOC in 2007. Both fields are recent discoveries and are estimated to hold significant reserves of oil/gas. The agreement with BIV is the second agreement signed between NIOC and a Malaysian firm since sanctions lifted over Iran in January 2016.
Iran airport record significant growth MEED – 12 Feb
The resumption of foreign airlines’ flights into Iran has resulted in a significant increase in the country’s airport passenger traffic in the first 10 months of the current fiscal year, which ends in March. Overall passenger traffic in the country’s 54 airports operated by the Iran Airports Company increased 18% to reach more than 48 million, according to local media citing data
from the airport operator. Aircraft movement also rose 16 per cent while cargo volume increased by 12%. A total of 319,137 international flights flew over Iran’s airspace, some 11% higher compared to the corresponding period in the previous fiscal year. Mehrabad International in the capital Tehran remains the busiest airport, accounting for close to 29% of overall passenger and aircraft movements in the country. Several international airlines have resumed their flights into Iran following the lifting of international nuclear-related sanctions in 2016.
They include Air France KLM, which now operates four return flights a week between Amsterdam and Tehran, and between Paris and Tehran. British Airways also began operating six direct flights a week between Heathrow airport and Tehran in September last year. Germany’s Lufthansa has resumed daily direct flights between Munich and Tehran in July 2016. Other international airlines that have resumed flights into Iran are Thai Airways (Thailand), Air Astana (Kazakhstan) and Air Asia (Malaysia). In August, Dubai-based Emirates Airline introduced a five-times-a-week flight to Mashhad International, the country’ second busiest airport, in addition to four daily flights to Imam Khomeini International airport.
