German Company Ready for Billion-Dollar Investment in Iran's Petrochemical Industry

The CEO of the National Petrochemical Company of Iran announced that the German company BASF is ready to invest four billion dollars in Iran's petrochemical industry. The government of Hassan Rouhani is attempting to modernize Iran's petrochemical industry following the lifting of international sanctions. According to Shana, the oil and energy information network in Iran, on Saturday, February 13, Marzieh Shahdaei, Deputy Minister of Oil for Petrochemical Affairs, stated in a meeting of industry managers that BASF is prepared to invest four billion dollars in the Parsian Special Economic Zone for the establishment of petrochemical industries. Shana introduced BASF as one of the largest petrochemical companies in the world. According to Shana, the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) has established the Parsian Energy-Intensive Industries Special Economic Zone with the aim of developing steel, aluminum, petrochemical industries, etc., and is trying to attract domestic and foreign investors by providing infrastructure such as docks. This area is located in the west of Hormozgan province, near Assaluyeh, and has access to open waters, docks, customs, roads, and other facilities. Adel Nejad Salim, a member of the IMIDRO board and CEO of the Persian Gulf Holding, also mentioned in the meeting that BASF intends to invest four billion dollars in this project with a 60% share, while 40% will be provided by the Iranian side. He stated that the German company plans to invest more in this sector in the second phase. Like the oil and gas sectors, Iran's petrochemical industry has been severely damaged due to sanctions related to Iran's nuclear program in recent years. Following the unsuccessful negotiations between Iran and the P5+1 countries during Mahmoud Ahmadinejad's presidency in November 2011, the U.S. intensified pressure on the Islamic Republic and sanctioned Iran's petrochemical industry. Subsequently, the European Union also imposed sanctions on the import of crude oil and petrochemical products from Iran in July 2012, effectively sanctioning Iran's petrochemical industry. Now, with the implementation of the JCPOA (nuclear agreement) and the lifting of EU sanctions against Iran, Hassan Rouhani's government is hopeful of attracting foreign investments into this industry. Bijan Zangeneh, Iran's Minister of Oil, has repeatedly announced the government's intention to rapidly increase crude oil and petrochemical production and exports following the lifting of sanctions, and the Ministry of Oil is trying to encourage major international companies to invest in these areas by offering incentives such as new oil contracts and facilities in special industrial zones. Meanwhile, according to Shana, citing the Hydrocarbon Resources Planning and Supervision Office of the Ministry of Oil, Iran's petrochemical production in the first nine months of 2015 was about 35 million tons, of which about ten million tons were sold domestically and approximately 14.3 million tons were exported. According to this report, the production capacity of petrochemical products at the end of September 2015 was equivalent to 61.4 million tons. The report also stated that the production of petrochemical products in 2014 was equivalent to 44.5 million tons and in 2013 was 40.6 million tons. IMIDRO officials also mentioned in their meeting that BASF has established six petrochemical parks in various countries and plans to launch the seventh park in Iran in the Parsian area.