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I I r r a a n n E E c c o o n n o o m m y y U U p p d d a a t t e e
Issue 106/2016 – Tuesday October 4th
Content
Iran’s oil & gas income this year less than $50 billion
Russia provides $250 mm in funds for Iran’s deepwater exploration operations
Despite disputes over puzzled regional politics, Germany and Iran are resolve to develop economic ties
IMF releases preliminary report on Iran economy
Iran’s oil & gas income this year less than $50 billion The chief executive board of the Iranian National Development Fund (NDF) said in the most optimistic scenario, Iran’s oil and gas export revenues will reach $50 billion this Persian year (ending 20 March 2017), according to semi- state Mehr News Agency.
Ahmad Doust-Hosseini who was speaking at the 2016 Oil
Conference held at ICCIM on October 1st also confirmed that part of the Iranian assets is kept in Chinese banks as collateral to secure financing projects in Iran, and added that Beijing has recently set a condition for financing projects in Iran
according to which 60 percent of the required goods and equipment for the projects should be
procured from China.
Beijing says it finances Iranian projects if 60% of equipment is provided from Chinese sources
Speaking at the same conference, NIOC Director for International Affairs Mohsen Ghamsari said on Saturday that the country’s oil and gas condensate export volume has reached 2.5 million bpd which includes 2 million bpd of oil and 500,000 bpd of condensates and that the country’s oil export price has been $40 a barrel on average since March. (A simple calculation leads one to conclude that Iran’s average oil revenue during the first six months of 1395 has been
$18 million and the coutnry’s total oil exports in 1395 would be $36 billion).
Iran’s oil income in 1395 will be about $36 billion The NIOC official also told Mehr News on Sunday that Iran’s crude oil exports will increase by
150,000 bpd in the next few months and added that the company aims to increase the volume of crude exports to the pre-sanctions level of 2.35 million bpd. He said Iran currently exports 600,000 to 650,000 bpd of crude to the European countries.
Europe’s intake of Iran’s oil surged to 650 k bpd from zero under sanctions
Russia provides $250 mm in funds for Iran’s deepwater exploration operations The deputy Energy minister said Iran has started a $250 million deepwater exploration project in tandem with Russia, Mehr News Agency wrote on Saturday. Rahim Meidani said that using a line of credit extended by the Russian side, the two sides have started carrying out deepwater
exploration operations in Iranian waters that will be followed by conducting geophysics studies and drilling exploration wells. He said this is as part of a $5 billion line of credit extended by Russian banks.
On August 24th, Mehr News had reported that the parliament officially endorsed the
government’s agreement with Russia to receive $5 billion in loan for carrying out infrastructure projects with priority being given to renewable energy, energy,
2 highway, dams, irrigation systems,
and water transfer plans.
Despite disputes over puzzled regional politics, Germany and Iran are resolved to develop economic ties
German Federal Minister of Economic Affairs and Energy Sigmar Gabriel who is
accompanied by a 120-strong economic delegation attended that 5th Iran-Germany Joint
Economic Cooperation Forum that was held after a 15-year
suspension on Monday and said his country is determined to develop business cooperation with the Islamic Republic, according to IRNA. He said Germany supports Iran’s accession to WTO and underscored that it will take time to see the positive results of reviving bilateral relations, thought the ordinary people are not patient enough in this respect.
Sigmar said according to the agreements signed, the two sides will develop “extensive”
cooperation in the fields of oil &
gas, environment, urban
development, investment, trade, and renovating energy
infrastructures. He also said inter- banking activities are among important segments of negotiations and agreements between Iran and Germany.
According to Mehr News Agency, the two-day visit of the German minister led to the signing of ten agreements totally worth €2.5 billion and the German minister promised to remind the US its
commitments to effectively remove sanctions against Iran.
Iran-Germany signed 10 MoUs worth €2.5 billion
According to IRNA, about 20 German business delegations have visited Iran since summer 2015 and about 10 other delegations are scheduled to visit Iran by the end of 2016. Mehr News Agency wrote on Tuesday that Gabriel
A statement by Sigmar before heading to Tehran raised ire among Iranian leadership
On the eve of his trip to Tehran, the German minister was under pressure to raise political and human right issues during his meeting with senior Iranian officials and according to Reuters, he noted on Friday that to
normalize relations, Tehran should accept Israel’s right to exist and stop its “decisive role in the Syrian war.” On the same day, Juergen Hardt, foreign policy spokesman for Merkel's conservatives had called on Sigmar to raise issues such as Germany's concerns about Iran's support for what he termed as the "terror regime" of Syrian President, its "unspeakable" anti- Israeli rhetoric, and human rights issues.
Such statements seem to have caused some political expenses for the German minister as
conservative Mehr News Agency
wrote on Tuesday that Iran’s Minister of Foreign Affairs Javad Zarif declined meeting with Sigmar for his alleged “interventionist statements”. Zarif had earlier said
“nobody can set conditions for Iran and Iran is an independent
country.” Sigmar’s remarks also drew ire of Iran’s Head of Judiciary Sadegh Larijani who said if he were the government, he would not allow a minister who has
“disregarded political etiquette”
enters the Islamic Republic. “In an inaccurate, illogical, and incorrect statement, the German minister has asked Iran to recognize Israel if it wants business relations. It seems that he is in a deep sleep because he doesn’t know that Iran has endured many pressures and difficulties in the past three decades and half to resist such demands,” said Larijani.
Iran’s Foreign Minister declined meeting Sigmar
On Sunday, Bahram Ghassemi, the Iranian MOFA spokesman had called the German minister’s pre- conditions for relations with Iran unacceptable. "The Islamic Republic considers defending the rights of the Palestinians as inseparable part of its foreign policy and will not relinquish supporting the Palestinian ideals under any circumstances,”
Ghassemi was quoted as saying by IRNA. The MOFA official had also rejected discussing human right issues saying “The Islamic Republic
3 will not allow any country to
intervene in its internal affairs.”
Donyay-e Eghtesad wrote on Sunday that Germany’s exports to Iran reached €1.13 billion in the first half of 2016, indicating a 15%
growth compared to the similar period in 2015, and is expected to reach €4 billion in total in 2016.
The daily wrote on Tuesday that OIETAI President Mohammad Khazaie, ICCIM President Gholam- Hossein Shafeie, and Gabriel Sigmar were the senior Iranian and German officials that chaired the join economic forum held on Monday.
Speaking at the forum, Sigmar said an agreement has been signed between the two countries’
central bank without giving details, and underscored that German companies don’t merely pursue profit in their dealing with Iran and rather, are going to transfer technology, use the potentials and capabilities in the region, establishing a new market base, value added creation and so on.
He emphasized on the importance of vocational training of the Iranian youth that can be carried out in Iran by German instructors.
Modernization of Iranian
industries was another area that the German minister expressed desire to develop cooperation in future. He admitted that banking problems in Iran’s relations with Germany have remained
unresolved and said on September 22nd, representative s of Iranian and German banks held
negotiations and discussed the issue.
In an article published on the Tuesday edition of the daily Donyay-e Eghtesad, Omid Yaraghi, the head of the Iran-German Chamber of Commerce said the German minister has underscored during his recent trip that he is looking for “appropriate” solutions for the banking issues and that the agreement signed between the two central banks was in line with this objective. This agreement, explains Yaraghi, would also help modernization of the Iranian banking system. Yaraghi argues that the presence of strong number of German delegation indicates that they consider Iran as a safe country for investment and are determined to develop their ties.
In an address to the Iran-Germany joint economic forum, OIETAI President Mohammad Khazaie said in spite of sanctions, the two countries’ trade volume in 2014 and 2015 was about €2.5 billion which is “very significant”. He said that by investment, the German companies are expected to increase Iran’s exports to the regional countries. Khazaie said the two countries may have different opinions in regards to the regional issues such as Israel and Syria but won’t allow such
differences affect their cultural and economic cooperation.
OIETAI president says disputes in political issues wouldn’t hinder developing economic ties
Meanwhile, Ali Majedi, Iran’s ambassador to Germany who was speaking to the country’s national TV declared on Saturday said that six German banks will form a consortium to realize more than
€3 billion worth business
agreements and investment that would be signed during the visit of the German delegation to Tehran.
Six German banks to form consortium to finance projects in Iran
Majedi said Iran and Germany are to pursue the so-called “fast- track” plans including some power plant plans such as a project to be carried out jointly by Iranian MAPNA Group and German Siemens for transferring F-class gas turbines. Among other plans that German companies will implement in Iran, Majedi referred to four plans in rail transport including a project for
manufacturing and technology transfer of 70 electric and 50 diesel locomotives, railway signaling for the Tehran-Isfahan and Tehran-Mashhad railways, as well as manufacturing train wagons in Iran. He said Iran and Germany have planned expanding
4 cooperation in petrochemical and
renewable sectors for generating 5,000 MW of electricity and some agreements have been signed in this respect.
In a related development, the vice minister of Industry, Mine & Trade and head of Trade Promotion Organization (TPO) said on Saturday that the Iranian private sector has held negotiations with Siemens for building train wagons and said if Iran manages to
cooperate with foreign companies including the European ones, the domestically-manufactured wagons can replace imports of railway equipment from Russia.
IMP releases preliminary report on Iran economy The International Monetary Fund (IMF) released a report on
October 3rd describing the
preliminary findings of the fund’s staff at the end of their recent official visit to Tehran. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision. This brief
preliminary report consists of the following expressions each being followed by a paragraph of explanation:
Economic conditions are improving substantially in 2016/17
The government is
implementing far-reaching, ambitious, reforms to
support a sustained acceleration in growth
Vulnerabilities are
emerging that could erode Iran’s economic
achievements.
Enhancing the ability of the central bank to safeguard price stability
Reducing fiscal dominance and creating space for bank recapitalization and public investment needs
Clearing government payment arrears and developing local debt markets
Fundamental overhaul of the banking system is needed to help unleash higher growth in the private sector
The proposed banking bill strengthens supervisory powers
Implementation of the FATF plan will bolster Iran’s AML/CFT framework and facilitate re-integration of domestic banks into the global financial system To read more about the IMF preliminary report, click here.
