1
Iran Economy Update
Issue 49/2017 SUNDAY APRIL23RD
Iran’s frozen assets
CBI Governor says Iran’s money in Oman is not frozen
CBI Governor Valiollah Seif rebuffed the assertions made by some conservative figures that part of the country’s released assets are still frozen in accounts in Oman, Mehr news agency reported on Saturday.
“We have whatsoever nor amount of frozen assets in Oman and rather, our money has been deposited in this Persian Gulf country that are gradually and based on our requirements withdrawn,” said Seif. Rostam Ghassemi, the former Khatam-ol-Anbia commander and the minister of Petroleum under the hardline Mahmoud Ahmadinejad presidency had claimed on March 30 that
“We should ask the government how much money you managed to enter the country under the tough conditions?” Ghassemi claimed that some $5 billion worth of Iranian assets released in the wake of the Lausanne Agreement in 2015 is still blocked in Oman.”
Home appliance market
Iran in talks with European home appliance makers for joint production Head of the Iranian Home Appliance Association said renowned Italian and French home appliance manufacturers will make washing machine, dishwasher, and water heater in Iran jointly with Iranian producers, Mehr news wrote on Friday.
Mohammad Tahanpour also said that negotiations are being held with a German brand for joint production according to which, 30% of the products will be slated for domestic use and the rest for exports.
Without giving more information about the name of European brands, Tahanpour said that in the next two years, Iran will turn into the region’s hub for exporting European home appliance brands.
Project finance
Iran in talks with foreign banks to finance infrastructure projects
The managing director of the San’t-va- Ma’dan (Industry and Mine) Bank said negotiations are being held with the Chinese, European and Russian banks to obtain long-term lines of credit for financing Iranian national and infrastructure projects, the daily Jahan-e Sanat wrote on Sunday.
Ali Ashraf-Afkhami made the comments during a meeting with the Indian ambassador to Tehran.
Of note, the Iranian Industry & Mine Bank was identified as the agent bank for the agreement signed in May 2016 between the Iranian Port & Marine Organization (PMO) and the Indian Export Development Fund to develop the strategic port of Chabahar.
According to the deal, India will invest $500 million in phase-1, including $150 million line of credit from Exim Bank to the Iran’s PMO for making jetties and berths at Chabahar.
China provides $2bn in finance for electrifying Tehran-Mashhad railway Saeed Mohammad-Zadeh, the deputy minister of Road & Urban Development said that Chinese government will provide funds for electrifying the Tehran-Mashhad railways, Mehr news agency reported on Sunday. Mohammad-Zadeh who is also the managing director of the Islamic Republic of Iran Railways expressed hope that negotiations to provide $2 billion Chinese credit for this project will be finalized next week. According to ISNA, Mohammad- Zadeh said the train wagons will be purchased from German Siemens
International Petroleum Forum
Iran’s installed petrochemical capacity reached 62 million tons last year
2 Speaking at the inauguration ceremony of the 13th Intl Petrochemical Forum in Tehran on Saturday, NPC Managing Director Ms.
Marzieh Shah-Daie briefed the audiences about the achievements accomplished in this industry in Iran last year. According to Jahan-e Sanat newspaper, she said 11 projects worth 3.4 billion was launched last year which enhanced the country’s installed petrochemical production capacity to 62 million tonnes. She added that with the launch of seven additional projects worth $9 billion, the country’s annual petrochemical production capacity will increase to 72 million tonnes. She said that the volume and value of Iranian petrochemical exports in 1395 reached 21 million tonnes and $9.4 billion, respectively. The NPC Managing Director said that last year, agreements were reached with foreign companies for implementing four petrochemical plans, and explained that the values of the agreements are yet to be finalized as one of the companies has agreed to invest $4-6 billion and another one pledged $2.5 billion. She said Iran’s petrochemical sector needs $40 billion in investment and that the projects that use natural gas as feedstock are of higher priority.
Petroleum Minister Bijan Zangeneh was the first speaker at the forum’s inauguration ceremony on Saturday. He said that in the wake of the nuclear deal, the Iranian petrochemical sector has witnessed emergence of a different atmosphere in terms of the willingness of foreign companies to participate in the projects, and concluded that the future of this industry in Iran is “bright”. “Last year, and with providing more feedstock we managed to increase the value of our petrochemical exports by 10%,” boasted Zangeneh. The minister claimed that there is no country like Iran that can provide sufficient feedstock for its petrochemical units. He referred to the Siraf refinery complex which once come online, will be able to process 480,000 bpd of [sour] condensates and produce 11 million tonnes of sweet oil. For this petrochemical complex, said Zangeneh,
NGL, propane and Bhutan will be provided as feedstock and discounts will be available if proper demands are made by the domestic and foreign investors.
Without going into details, the petroleum minister said six [petrochemical] plans worth
$40 billion have been defined which will require both domestic and foreign resources. He recommended all the potential investors that are willing to invest in Iran’s petrochemical industry to visit the Assalouyeh and the Port of Mahshahr.
“Long-term tax exemption is among the advantages of investment in Iran’s petrochemical industry,” he added, according to Mehr news.
Speaking to reporters on the sidelines of the event, Zangeneh also talked about the time schedule of holding the first tender for Iranian oil and gas projects. “A limited tender with the participation of five or six foreign companies will be held. The companies will then submit their technical and financial proposals.”
On if any progress has been achieved in talks with Indians for developing the Farzad B gas field, the minister said “We have spent a long time on negotiations with them but little has been achieved. Though I still don’t say the negotiations have failed, and the results will depend on the decision of the other side.” According to ISNA, Zangeneh said Russian Gazprom has shown interest on developing Farzad A and B fields.
Zangeneh also said problems still exist in banking transactions, partly due to psychological issues and partly due to the prudence of foreign banks. “The result of the upcoming presidential elections will influence this issue. The people’s turnout is important for the future of Iran. I urge the people to go to the polls...People on May 19 will decide whether IOCs come and invest or escape [from investment in Iran]”
3 Talks with IOCs
Iran and Total to finalize South Pars Phase 11 deal in a month
Petroleum Minister’s Deputy for International Affairs Amir-Hossein Zamani- Nia said that the contracts with France Total for developing South Pars phase 11 will be signed in less than a month, ISNA reported on Sunday. On the exact time of contract conclusion, he said “It depends on how much we are prepared and how long the drafting will take. I think it should not take more than one month.”
The Heads of Agreement on developing South Pars phase 11 was signed on November 8th between NIOC and Total. The French company’s official website has stated that it has a 50.1% interest, alongside Petropars1 19.9%, and the Chinese state-owned oil company CNPC will own a 30% interest in the project.
Iran in Foreign media
Troubled Taiwan shipping line Yang Ming cuts Iran service: Reuters
Reuters – April 21
Taiwan's troubled Yang Ming Marine Transport Corp is halting its container service to Iran, becoming the first foreign shipping line to abandon the route a year after international sanctions on Tehran were lifted, according to a company source. An executive with Keelung-headquartered Yang Ming said the firm had "ceased direct services to Iran on concerns of rising tensions there".
Reuters was unable to confirm independently whether the cancellation of the route was due to new concern over Iran, or to changes at the Taiwanese company which is trying to slash costs after it posted a loss of $62 million in the last quarter of 2016. Yang Ming announced on Thursday in a regulatory filing it had suspended its share trading until May 4 in an effort to reduce losses from a global downturn in shipping. The executive said Yang Ming had
1 a 100-percent subsidiary of NIOC
also adjusted some of its routes in Asia as a result of the downturn, but that ceasing direct service to Iran was mainly because of geopolitical issues rather than the cost cutting drive. The cancellation of the Iran route is likely to be seen in the shipping industry as a further sign that business has not picked up as quickly as Tehran had hoped since sanctions were lifted.
Iran's crude exports set to fall in May to 14-month low: Reuters
Reuters – April 21
Iran's crude oil exports are set to hit a 14- month low in May, a person with knowledge of the country's tanker loading schedule said, suggesting the country is struggling to raise exports after clearing out stocks stored on tankers. Part of the drop may also be attributable to a decline in demand, as loadings bound for India are set to slump to a one-year low after a dispute over the award of a contract for a gas field and Japan's orders fall by more than half from April. Crude oil loadings from Iran are expected to total nearly 1.7 million barrels per day (bpd) in May, with almost 100,000 bpd being put into storage on tankers, according to the source. Loading figures for condensate, an ultra-light crude, were not available for May. In April, the country is expected to export 1.8 million bpd of crude and a little over 370,000 bpd of condensate, down sharply from a six-year high of nearly 2.9 million bpd reached in February for both forms of oil.
