Corridor Chats

The 1^st Iran Oil Refining Forum was held on February 17-18 2007, in Tehran. The Forum brought together leaders of the Iranian industry, representatives from foreign countries, and representatives from domestic and foreign oil companies. The two-day event provided the opportunity for participants to attend sessions covering issues such as investment, capacity-building, technology development, and refinery improvement.

Iran International was able to carry out informal chats with the main speakers at these sessions in between the different breaks provided throughout the two days. Our conversation covered three main issues: the potential benefits of holding such a forum given the international environment and questions surrounding Iran’s nuclear dossier, whether such a forum will lead to future investments in the refining sector, and the overall assessment of the forum by the participants.

Olivier Appert, Chairman and CEO of the French Institute of Petroleum (IFP) since 2003, stated that it is important to get a precise view about Iran’s oil refining industry and to see what are the main challenges and opportunities within the future of this industry. He said there is interest from companies and institutes outside of Iran to understand the internal situation of the refining industry in the country and to have a better view of the different opportunities this industry can provide. This forum is in line with previous initiatives undertaken by Nematzadeh in his previous position as the head of the petrochemicals industry. It provides a platform for specialists and actors in the field to exchange information and to share their comments.

Asked to assess the conference he stated that "I think it has gone well and has allowed the participants to get a closer look. The exchanges between the panelists and the other participants are important and I would say that the forum has succeeded in providing the basic platform needed for moving forward."

Peter Close, co-Founder and former Chief Executive Officer of KBC, U.K. believed that "the purpose of the conference was laid out very clearly in the beginning which was to promote the Iranian oil industry and investment opportunities associated with that. I think that objective has been achieved." Certainly, according to Mr. Close, the conference has sent out a strong message that Iran is open to working with foreign companies in the refinery sector and that it will welcome the participation of suppliers of technology and services to help with the progression of the industry. So I think the conference has achieved that objective." The other point he noted was that "the quality of the presentations here, compared to other industry forums that I have been to, have been really good. There was a lot of willingness to really show all the technical details and technological aspects of products that were being discussed. There has been good communication both at the commercial and business level and at and the competitive level in terms of boosting the Iranian oil refining industry. In both cases it has been a success." He also believed that the companies presented were from a wide range of possibilities in the sector. "The forum covered as well as it can, given time limits, the spectrum of available technical and commercial options," he added. The companies that were selected "represent very much the options any refining industry needs. I think credit needs to go to Mr. Nematzadeh for setting this up. He is from the petrochemical industry in Iran where he organized similar forums. Now, he has brought new ideas to the refining industries."

He also said his company is active within the refining forum and will continue being active in the future. "We have just started a profit improvement program (PIP) at the Abadan and Shiraz refineries with two more programs at two other refineries being undertaken in the coming months. These are programs that will analyze the performance of the refineries and to assess how they can make more money without spending public money. Also the analysis we will do, which will include a detailed simulation, will provide a base case that will show how steady capital investment will optimize the projects discussed here today."

In the end he mentioned that the forum was "very positive and has exceeded my own personal expectations. I think there is a lot of excitement and willingness on the part of the different companies to see what are the opportunities presented by the NIORDC and how they can move forward together. So, I think it has been a successful forum."

Such a forum is "almost like a lifeline and it’s an excellent idea for the Iranian people in the refinery sector to get all these people together in once place and have them exchange information," stated Tony Hagan, Technical Services Manager for Europe, Middle East and Africa at Criterion Catalysts & Technologies, UK. He added the forum is "an extremely positive step." He also commented on the possibility of future investments. "It is difficult for me to comment from where I am seated. But I think it will do no harm and might be able to do some good. As far as Shell goes, and Criterion belongs to Shell, it is evident that it is considering active participation in the South Pars gas field." He believes that it is good for Shell to be considering such an investment. Yet, he mentioned that "I also think they are worried of repercussions with our North American friends in terms of strains that are put on Shell, with penalties and threats at this moment. So, I think the people involved with making decisions regarding investment are taking those issues into consideration as well."

Overall he assed the forum positively and stated "you are going to find there is a lot of good feeling at the end of the conference and people will be going away having renewed their contacts and foreign people outside of Iran will feel more comfortable talking with industry leaders. I guess it can only be an improvement on not having the conference."

Franz Ehrhardt, Chief Executive Officer and Principal Consultant at CASCA Consulting L.L.C., USA, also spoke to Iran International. "Whatever we do to initiate and continue dialogue is much better than resorting to fiery rhetoric," he said. Moreover, "from the oil industry’s point of view, this is an excellent step. I have been in Iran several times before and have given many speeches, and I have always pointed out that Iran is a very important anchor point and pivotal center for the energy industry in the entire region. Therefore, I think the initiative of his Excellency the Deputy Minister of Petroleum, Mr. Nematzadeh, is outstanding to bring about a forum like this and I think the organizers have done a great job at bringing good speakers and participants together." He also said that "I don’t think the forum itself will bring about future investments; rather the steps that Mr. Nematzadeh has initiated are the factors that will bring about such investments. There is suddenly a thrust on refining." Impressed by the depth of discussions he said: "I have never heard such specific technical issues like processing heavy crude being discussed at such lengths and depth. These are all the very sensible things that a successful refiner does. I am terribly impressed."

He also mentioned that "I know many of the speakers that have spoken here and if they come here that means that they consider this a very important conference."

Jean Sentenac, Chief Executive Officer of Axens France since 2002, stated that "I think given the plan for the development of the Iranian refining industry which requires $60 billion U.S dollars in the next ten years, certainly this kind of forum is very beneficial in attracting partners and the private sector. The NIORDC wants to do some of these projects with foreign partners, so it’s giving a good presentation on all the projects." As a CEO he was asked to comment on future investments in the country and mentioned that "well as you know there is already investment from abroad under study right now."

He also emphasized that "it has been clearly stated by both the Minister of Petroleum and the Minister of Finance and Economic Affairs that not only they will welcome investment, but also there will be laws put in place to ensure the security of investment is a good message to outside companies." He called this a positive happening and said that "Our company has been working in Iran for a long time, mostly in the field of petrochemicals, and we have a strong personal relationship with Mr. Nematzadeh. We are a company which develops processors and catalysts and are involved in technical services in the industry. So, hopefully we can continue that participation in the future." He assed the forum positively as well and mentioned that "I have been participating in forums that his Excellency Nematzadeh organized when he was in charge of the petrochemicals industry and I think such forums have helped him to move forward a lot of projects. This forum is a step in that direction for the refining sector."