The value of Iran’s petrochemical products which now stands at an annual of $1.5 billion will top $7.5 billion by late 2005.

Minister of Oil Bijan Namdar Zangeneh was the Forum’s first speaker. His speech was especially significant as it clarified the major policies of the Iranian Oil Ministry in terms of future plans, joint ventures and private investment.

Zangeneh’s speech drew on four topics:

1. Competitive advantages of Iran for the development of the petrochemical sector.

2. Development plans of the Iranian petrochemical industry.

3. Iran’s strategies for the development of the petrochemical industry.

4. Legal and regulatory grounds to launch joint projects financed through joint investment.

His statements on each of the above topics follow in brief:

Iran houses the world’s second largest gas reserves while being one of the top three oil-rich countries. Operations on oil, gas and petrochemicals date back about 90 years in this country. Moreover, Iran is situated close to other vast reserves of oil and gas in the Persian Gulf and the Central Asia. All these facts naturally give Iran the advantage of feedstock at competitive prices for petrochemical plants.

At the same time, the Iranian population of 60 million creates a growing market for petrochemicals. As the country has long been active in oil, gas and petrochemical industries, there are skilled human resources to handle implementation, commissioning and maintenance of plants. Qualified engineering companies as well as efficient manufacturers exist in Iran who are reliable contractors for the construction of petrochemical plants based on international standards. For its development, Iranian petrochemical industry also boasts other advantages including access to regional and international markets, technical capabilities and utilities in the two special economic zones of Bandar Imam and Assaluyeh and proper legal and regulatory grounds to absorb foreign investment.

Having left the war behind, Iran resumed rapid development of petrochemical plants 10 of which are now under construction within the Second Development Plan. Aiming to have a number of plants commissioned by 2005, investments to be made in the petrochemical projects ahead are expected to reach a total of $7.2 billion 50% of which should be spent abroad on importing equipment and engineering services. As a result, the value of Iran’s petrochemical products which now stands at an annual of $1.5 billion will top $7.5 billion by late 2005 when the country will export $5 billion worth of petrochemicals.

Technical capabilities in the two special economic zones of Bandar Imam and Assaluyeh provide proper grounds to absorb foreign investment.

Of great significance is the supply and guarantee of feedstock for the plants to be established.

Serving the purpose, development of the existing oil and gas fields is on agenda. Here, mention can be made of the vast South pars Gas Field which holds over 10 trillion cubic meters of natural gas.

Operations have started on three phases of this field to produce 7.5 million cubic million of natural gas and 120,000 barrels of liquid gas condensate per day. Meanwhile, negotiations are underway to finalize five more phases of the South Pars Project.

The Iranian Oil Ministry is committed to supplying feedstock –including natural gas, condensates, naphtha and NGL– required by petrochemical plants. In addition, major plans have been devised for the supply of feedstock to olefin plants through exploitation of ethane from natural gas.

This should give investors the kind of confidence they need.

The competitive advantage of Iran in petrochemical sector and particularly, huge hydrocarbon resources as well as oil and gas schemes guarantee the sustained supply of feedstock for petrochemical plants. Skilled human resources, engineering companies and factories all pave the way for utilization of modern facilities. In general, our policy is to make use of existing advantages through joint ventures with international companies thereby promoting the Iranian petrochemical industry in the region as well as the international market.

To facilitate implementation of development projects in the petrochemical industry, Iranian government has to provide suitable grounds. For this purpose, regulations have been ratified to absorb investment, offer facilities in free trade and special economic zones, offer exemption from tax and customs duties for both imports and exports. Formalities have been minimized in special economic zones –Bandar Imam and Assaluyeh– while vast facilities and state warranties have been provided to encourage investors.