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Iran Economy Update
Issue 95/2017 TUESDAY NOVEMBER 7TH
Iran and Russia seek emboldening “strategic” ties in energy sector
During the visit of Russian president to Tehran last week, a $30 billion agreement was signed between Iran and six Russian companies including RussNeft and Gazprom, the daily Donyay-e Eghtesad wrote on Saturday. Petroleum Minister Deputy for International and Commercial Affairs Amir-Hossein Zamani-Nia has explained that the “transitory” agreements were six
“strategic” cooperation agreements1 in the energy sector. NIOC Managing Director Ali Kardor has told Donyay-e Eghtesad that the Russian companies have shown interest in making $30 billion investment in Iran’s energy sector but it is still not certain if they are financially capable to make such huge investment. “Experts believe that although Russia is the biggest oil producer of crude oil in the world and enjoys appropriate production technology in this regard, from technical, management and technology transfer vantage points, this country cannot compete with the European firms,” wrote Donyay-e Eghtesad.
Details of the agreement signed last week between Iran and the six Russian companies have not been disclosed. NIOC Managing Director Ali Kardor has explained that part of this agreement is about a number of untapped southern Iranian gas fields. He said that Iran has so far mostly focused on the South Pars gas field, shared with Qatar and hence, less attention has been paid to other gas fields in which Russian companies recently showed interest.
Japan to extend $10bn line of credit for joint projects in Iran
The deputy minister of Energy in Electricity & Energy Affairs announced that the government of Japan will allocate a $10 billion line of credit for the Japanese companies that are going to carry out joint projects with Iran, Mehr news reported. Houshang Falahatian said Japan’s Ambassador to Tehran announced this news during the Iran-Japan joint cooperation seminar held on the sidelines of the 17th Int’l Electricity Exhibition of Iran (4-7 Nov). Falahatian said Japan is interested in investment in Iranian thermal and renewable power plants as well as power sector equipment. During this seminar, said Falahatian, the two countries’ private sectors will hold B- 2-B meetings to look for the investment areas they are interested in for cooperation.
Since August, a string of LCs have been extended by foreign govt. for Iran including a €8billion LC extended by Korean EximBank, followed by a $10billion LC by China, and frameworks of agreement signed with Austria’s Oberbank and Danish Danske Bank and an agreement CBI signed with the Export Insurance Agency of Russia (EXIAR) for financing joint projects.
1The term “strategic” is what you frequently hear from the Iranian officials when they describe the type of Iran’s relations with Russia. When this term is used by the senior Iranian officials, they intend to emphasize that such ties are more than just seeking short term economic benefits and rather, the two sides seek securing their long term political interests as well. It’s been in line with such “strategic” ties that the two countries will soon launch an oil- for-goods deal under which Tehran supplies 100,000 bpd of crude oil to oil-rich Russia in exchange for receiving Russian equipment.
2 Iran seeks $50 billion in mining investment for five-year plan - deputy minister
Reuters - Iran is seeking $50 billion in investment for its mining industries out to 2022 and has signed agreements with several European and Asian banks in the past few months, the country’s deputy mining minister said on Wednesday. “We are in need of $50 billion for investment in the mining and mining industries of Iran,” Mehdi Karbasian told Reuters, speaking on the sidelines of the Imarc mining conference in Melbourne. “In the past two months we have had agreements with South Korea, with Austria, with Denmark and it’s on the way for other countries like Germany,” Karbasian said, without identifying investors. He said the plan was to attract capital across five years, but declined to say how much Iran had raised so far.
Iran says Seoul in willing to trade Iranian Islamic Treasury bonds in Korean markets
In a speech delivered at the Kish INVEX 2017 Exhibition, Shapour Mohammadi, head of the Iranian Securities & Exchange Organization (SEO) announced that South Korea has shown interest in trading Iranian Islamic Treasury bonds in the Korean markets, the daily Donyay-e Eghtesad wrote last Wednesday. Mohammadi said that in this Persian year, Iran will issue an equivalent of $5 billion worth of Islamic Treasury bonds. In a related development, Jahan-e Sanat newspaper wrote on Sunday that according to the officials of the ministry of Economic Affairs & Finance, Netherlands, Britain and China are going to invest more than €140 million in total in the Iranian stock exchange. The Economy ministry official has explained that the needed license for these companies have been issued for selling and buying stocks as well as investment in four wind and solar renewable energy resources.
FATF calls on Iran to proceed swiftly to ensure full implementation of Action Plan
The Iranian Cabinet of ministers approved this week the executive regulations of countering money laundering and financing terrorism that was prepared upon a joint proposal made by the Judiciary, the Ministry of Economic Affairs & Finance, the Ministry of Justice, and the Ministry of Intelligence and in line with implementing the law of countering financing terrorism approved in 2015, Tasnim news reported. The approval of this bylaw by the cabinet takes place just one day after in a public statement released by the Financial Act Task Force (FATF), Iran was cautioned that the action plan expires n January 31, 2018 , and Iran was urged to proceed swiftly in the reform path to ensure full and accurate implementation of the Action Plan.
A Swiss delegation met with OIETAI officials
Phillippe Leuba, the minister of Economic Affairs & Sport of Canton of Vaud in Switzerland led a banking and economic delegation in his visit to Tehran this week to meet with Iranian officials, Mehr reported on Sunday. After meeting with the delegation, OIETAI President Mohammad Khazaie said they discussed cooperation in biotechnology, IT, and exchanging technologies in medical, agriculture, and transport sectors. Khazaie said as a result of such talks, “appropriate opening” were created in banking relations between Iran and Switzerland, without giving more details. He also said their negotiations on financing Iranian projects and their insurance coverage were “promising”. Mehr quoted the Swedish minister as saying that “very good”
sessions were held with Iranian companies for developing economic/industrial cooperation.
3 In a separate development, a Belgian delegation headed by President of the Federation of Belgian Chambers of Commerce Rene Branders visited Tehran this week and met with the ICCIMA Chairman Gholam-Hossein Shafeie, Financial Tribune wrote on Monday. The Belgian delegation is scheduled to stay in Iran for four days to visit Tehran and Isfahan.
Asian imports of Iranian oil hit highest in six months
According to a report released by Reuters on October 31st, China, India, South Korea and Japan imported slightly more than 1.9 million barrels per day (bpd) in September, up 5.1 percent from a year earlier. Chinese imports from Iran in September rose nearly 60 percent from a year ago to about 784,000 bpd, down from August when China imported the highest monthly amount since 2006, according to Reuters. South Korea’s imports rose by nearly a quarter to just over 504,000 bpd, a five-month high. India’s imports fell by a third to 415,400 bpd. Imports to Japan, which announced official figures on Tuesday, were down by more than 30 percent at a bit less than 216,000 bpd. In the following table, Iran’s supply of crude oil to the six Asian customers have been presented, and you can compare how the figures have changed since Janaury 2017.
September 2017
August2 2017
July 2017
June 2017
Jan-June 2017 China 784,000 786,720 568,719 516,119 586,576 Korea 504,000 407,323 368,935 310,167 421,972 Japan 216,000 107,357 167,505 134,831 166,652 India 415,400 335,400 414,900 495,900 539,500 Total 1,919,000 1,640,000 1,520,000 1,457,017 1,714,700
September 2016
July 2016 China 549,889 566,191 Korea 289,739 291,097 Japan 221,922 256,651 India 602,546 523,100 Total 1,664,096 1,445,826
Iran to hold seminar titled “Discover Iran Again!”
A forum on “Iran investment and economic opportunities” for attracting $35 billion investment will be held in Iran, Jahan-e Sanat newspaper reported on Sunday. The secretary of the forum has announced that so far, 100 global economic organizations have been invited to attend this event of which 60% have confirmed their participation. The seminar will be held in cooperation with Femoza3, UNIDO, UNCTAD, the World Bank, the European Investment Bank (EIB), the Asia Development Bank, and WAIPA (World Forum for Foreign Direct Investment) from 25-28 November in Tehran, with the motto “Discover Iran Again!”
2 Source: Reuters, Reuters, Reuters and Platts
3 Fédération Mondiale des Zones Franches
