Petchem Talks with Foreign Investors Continue
Hossein Ali-Morad, NPC investment chief, says no company has officially announced quitting cooperation with Iran. “Of course, cooperation has been suspended, but communications between these companies and NPC are still under way,” he added. “Under the current circumstances, foreign companies expect us to facilitate their presence [in Iran], but we have reminded them of the fact that our request is bilateral; if they believe that Iran is the best market for them they had better take steps and urge their own governments to create a better atmosphere for cooperation with Iran,” said Ali-Morad. Iran is determined to push ahead with the development of its petrochemical industry, without or without foreign companies. Iran’s relative advantage in hydrocarbon resources and big investment made in this sector in the past years have accelerated the rate of return on investment in the petrochemical sector. That, along with self-sufficiency in some sectors of this industry, has grown into the undeniable incentives of the petrochemical industry in Iran. Ali-Morad said 15 foreign companies rushed to Iran for negotiations immediately after Iran struck the 2015 deal with the world powers. “13 MOUs were signed by NPC and foreign companies for investment in this industry. Had these talks ended in agreement at least $15 billion in foreign direct investment would have been made in Iran’s petrochemical industry.” “But the US’s unilateral withdrawal from the JCPOA (the official title of the agreement) complicated the conditions for the presence of foreign companies in Iran,” said Ali-Morad. He said: “Asian nations like China and India did not follow the US government’s unilateral policy [of re-imposition of sanctions on Iran] in November and therefore Asian companies have not yet suspended their talks with Iran.” “However, European companies are still waiting for the outcome of their governments’ talks with Iran and are seeking mechanisms like SPV Despite the United States’ withdrawal from Iran’s 2015 nuclear deal with six world powers, negotiations between Iran’s National Petrochemical Company (NPC) and foreign companies are going onEconomic Risk ReductionIran says there are still many incentives for investment in the petrochemical sector despite the US imposition of sanctions. “As far as investment guarantees are concerned, apart from the issue of sanctions which is the political risk of a project, we have to help investors manage their economic risks and contain them. We create economic incentives for them in order to push them to invest in the petrochemical sector,” said Ali-Morad special purpose vehicle) in a bid to remain immune to the impact of US sanctions,” he added. Ali-Morad said some smaller European companies had remained silent under such circumstances and were looking for options to continue cooperation with Iran. The US sanctions waivers to eight countries to buy Iran’s oil would give green light to European companies that have set conditions for cooperation with Iran. “In other words, through their governments they can pressure the US government and win sanctions waiver,” he said.No AdieuAs soon as the US pulled out of the JCPOA, rumors swirled of the end of cooperation between NPC and foreign companies. “None of companies with which we were in talks have officially announced the end of their cooperation with Iran; however, they have either set conditions for their cooperation or suspended their cooperation,” said Ali-Morad. Asked if European companies would terminate
heir talks with Iran, he said: “I don’t think so. I feel that all of them are waiting to see what SPV-style mechanisms would be envisaged by the European governments for cooperation with Iran or privileges they would win or if they would be able to win US sanctions waiver.” “We and our foreign partners are looking for a way to skirt around the sanctions,” said Ali-Morad. He said both Iran and European companies had to make efforts to find facilitating mechanisms. “Some time ago, the manager of a foreign company had travelled to Iran to appoint his new representatives and introduce him to the CEO of NPC. I told him: ‘In our meetings, you constantly tell us you look at Iran’s market and you are trying to export chemicals from Iran to global markets. But how come you are only expecting us to find a way to circumvent the sanctions? You must also benefit from your own tools and negotiate with your own governments and ratchet up pressure on them to find a mechanism to get around the sanctions’.
ncentivesThe projects offered for investment are set to be implemented in areas where domestic and