Preparing appropriate grounds for investment in petrochemical industries, projects under implementation, raising the output of refineries, gasoline quota and the issue of an oil bank were among the most important issues discussed at the 8th Iran Petrochemical Forum which was held in Tehran May 17-18, 2008.

Addressing the opening ceremony, Iran's Minister of Petroleum Gholam-Hossein Nozari said according to estimates, the country needed more than $30 billion for launching petrochemical projects in the Fourth and Fifth Development Plans. He said the finance could come through financial participation or financial participation together with technical assistance through domestic and foreign markets.

The minister said the performance of the petrochemical industry over the past year shows an output increase of 9 million tons. "At present the production capacity of this industry has reached 35 million tons while increasing production capacity by 31 million tons is under implementation.

Once part of the projects under implementation goes on stream, the production capacity of petrochemical industries will reach about 47 million tons by the end of the current Iranian year (March 20, 2009), he noted.

Nozari said with materialization of the production plans in the current year, Iran's petrochemical industries production capacity will increase from 25 percent to 29 percent. He also said the general policy of the Petroleum Ministry is designed and executed based on support for developmental and structural activities which impact the nation's economic strength, support for non-oil exports, support for downstream industries within the 20-Year Vision Plan.

Also addressing reporters on the sideline of IPF-8, the minister said the oil market is well supplied and an increase in production by the Organization of Petroleum Exporting Countries (OPEC) would have no impact on the oil price.

Referring to recent remarks by President Mahmoud Ahmadinejad on reducing Iran's oil production, Nozari said his statements were related to selling crude oil and preventing crude sale, which is a general policy.

Managing Director of National Petrochemical Company (NPC) Gholam-Hossein Nejabat said a great leap was made last year when 12 petrochemical complexes with a total nominal capacity of about 9 million tons went on stream.

As a result, he said, the nominal capacity of this sector rose from 26 million tons in the year 1385 (ended March 20, 2007) to 35 million in the year 1386. The figure is expected to reach 47 million tons this year, he said.

Addressing the inaugural ceremony of the 8th Iran Petrochemical Forum, the deputy petroleum minister also said a tough competition has been created due to the ever-increasing demand for energy in the world especially by the industrial states. Increase in crude oil prices and its impact on petrochemical industries feedstock are among the most important challenges of the petrochemical industry, he said, adding because more than 90 percent of naphta is priced on the basis of crude oil price. He said petrochemical complexes were under pressure due to the high price of feedstock and energy last year and the increase in the price of final products hardly makes up for the benefit margins.

Thus producers in the Middle East, especially Iran, are in a unique position due to their access to abundant gas feed for petrochemical industries and for this reason the development process of petrochemical industries in the Middle East has not slowed down despite issues such as shortage of skilled manpower, shortage of contractor companies and considerable increase in manufacture expenses and petrochemical projects are still beneficial and rewarding in the Middle East.

The most important concern today is the impact of the current wave of increase in new capacities of crackers compared to the demand especially the coincidence of utilization of many of these units with increase in capacity in China and other regions.

He said according to Article 44 of the Constitution, the National Petrochemical Industries Organization is obliged to implement privatization. With implementation of this article, the share of NPC will reduce to 20 percent in the affiliated companies and it will take over the role of policy making in Iran's petrochemical industry. He said 22 petrochemical companies were listed for privatization three of which have already been given to the private sector.

Governor of the Central Bank of Iran said the Islamic Republic of Iran is planning to offer new and better ways for investment in the country.