Iran to attract foreign investment for expansion of downstream oil industry

Jul 12, 2000 02:00 AM

Iran is planning a five-year project to expand its downstream oil industry by attracting direct foreign investment, Mohammad Aghaie, Iran's Deputy Minister of Petroleum and Managing Director of the National Iranian Product Refining and Distribution Company (NIORDC) said. He said that investment in the downstream sector would not be within the framework of the buy-back system used for the upstream sector.
"Our main policy is to attract direct foreign investment for downstream projects that do not come under governmental responsibility," Aghaie said. "They will not be part of the buy-back scheme." Aghaie outlined several projects for potential foreign investment, such as the two new refineries to be built in Neka and Babol in the north of Iran with a capacity of 100,000 bpd each.

NIORDC is also planning the construction of a 50,000-bpd hydro-desulphurisation unit a the Bandarabbas refinery, as well as the refinery's debottlenecking, Aghaie said. "We are also looking to build isomerisation units in most existing refineries to improve the quality of gasoline and a feasibility study to build hydro-desulphurisation units at all the refineries," Aghaie said. "As well as the renovation and modernisation of all pipelines in the country."
Aghaie said that all refinery improvements would involve direct foreign investment. The refining capacity at Iran's nine existing oil refineries is 1.342 mm bpd.
Buy-back agreements are a type of service contract where the companies involved are paid in oil, since the petroleum laws do not permit foreign companies to hold equity in oil reserves.

Source: Bridge News via Newspage
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