NIOC MD: Petrochemicals export revenues plunge by falling oil prices

TEHRAN, Feb. 11 (MNA) – NIOC Head Shah-Daei has reported on reduced income of petrochemical exports due to the decline in crude prices in the market. Managing Director of the National Petrochemical Company (NPC) Marzieh Shah-Daei said actual output of Iran’s petrochemical products will climb to about 51 million tons saying “moreover, it is estimated that by mid-March, nearly 20.2 million tons of Iranian petrochemicals worth approximately $9.5 billion will have been exported.” Deputy Iranian oil minister pointed to the influence of falling oil prices on global petchem markets asserting “in the current situation, several new petrochemical projects are ready for operation while some have officially come on stream.” NIOC managing director enumerated the most important new projects underway in the country’s petrochemical industry including development of Karun, Kurdistan, Persepolis, third phase of Pardis, Entekhab, Bushehr and Kaveh petrochemical complexes. The official also referred to implementation of 50 petrochemical projects in the country with a production capacity of about 41.3 million tons; “upon completion and operation of these projects, 32 million tons of petrochemical products will be manufactured per year.” She also referred to the plan to build 25 new petrochemical projects with a production capacity of 49 million tons within the framework of the Sixth National Development Plan; “construction and operation of the 25 projects requires about $ 31.3 billion of investment.” Shah-Daei highlighted complete abolition of sanctions on Iran's petrochemical exports to European countries and even South America saying “no limitations exist now to maritime transport or insurance of petrochemical cargos.” Deputy Oil Minister said negotiations had already been held companies like Britain’s Shell, Total of France, Germany’s Linde and BASF, Spain’s SERCOBE in addition to Japanese and South Korean firms for joint venture in petrochemical industry. “Talks with BASF of Germany for inking a 4 to 4.6 million dollars of direct investment in the Iranian petchem industry are underway and economic aspects are being investigated. NPC managing director also touched upon the criticisms raised by petrochemical companies about high costs and pricing of feedstock explaining “feed pricing mechanisms have been developed in consultation with private sector companies who are usually pursuing profit and maximum profit margins.” The official, while stating that petrochemical companies can have at least 25 to 30 percent of profit margin with current prices of gas feed, said “in collaboration with a specialized committee of the Iranian Parliament, new amendments are being applied to the pricing formula for liquid feed of petrochemical plants.” Shah-Daei stated that the output capacity of Iran’s petrochemical industry has risen by 16 per cent in the current year as compared with the previous year; “in the meantime, exports volume petrochemical products in terms of tonnage and production increased by 32 and 24 percent, respectively. On imposition of anti-dumping actions against Iran's petrochemical exports in some countries like India and Turkey, the official said “given that companies directly enter retail market of petroleum products and a sales competition has begun among Iranian companies in the global petrochemical market, countries will certainly apply anti-dumping regulations against Iran's petrochemical products. Deputy oil minister said that so far negotiations with different countries to repeal anti-dumping legislation against Iran's petrochemical products had yielded no results concluding “we are concerned that anti-dumping regulations will be also applied in other countries who are customers of Iranian petrochemicals.”