Iranian manufacturers of equipment and parts used in the petrochemical industry should be backed by the government and domestic banks, the managing director of Tamin Petroleum and Petrochemical Investment Company said.
“The banking system should increase its financial support for domestic petrochemical plans to help reach the envisioned economic goals,” Mohammad Hassan Peyvandi was also quoted as saying by NIPNA, the National Petrochemical Company’s news agency, last week.
According to Peyvandi, Iranian manufacturers boast an acceptable quality and know-how, and have had a significant role in the petrochemical industry’s development in the past few years.
“Iranian banks, I believe, should change their approach about supporting domestic industries and follow in the footsteps of developed countries in this regard,” he said.
"Although officials insist on using equipment and parts produced domestically, in some industries, including the petrochemicals, this does not happen in practice."
Peyvandi stressed that providing affordable banking facilities is vital for domestic industries, especially petrochemicals that have high added value and can create a lot of jobs.
“Along with efforts for attracting new investments and the presence of international renowned companies, Iranian banks should also finance petrochemical projects to reach their production phase as soon as possible,” he said.
Using domestically produced equipment in the newly development ventures in the energy sector has been a key issue since the lifting of international sanctions early 2016.
According to one of the requirements of the new Iran Petroleum Contract model that has been designed to attract foreign investment in energy projects, whatever equipment that can be manufactured domestically should not be imported by foreign contractors, otherwise that would be a violation of IPC and they (foreign companies) will be fined.
Officials say IPC is the first Iranian oil contract that clearly stipulates a role for domestic oil and gas equipment manufacturers.
Tehran said its new petrochemical ventures require over $70 billion in investments that should mostly come from foreign sources.
Petrochemical is Iran’s most important industry after oil and gas. NPC hopes to lift nominal output capacity to more than 120 million tons per annum by 2022, the end of Iran’s Sixth Five-Year Economic Development Plan.
The country holds some of the world’s largest crude oil and natural gas reserves, but its petrochemical industry is underdeveloped in comparison.
The government of President Hassan Rouhani is on a mission to make better use of the massive hydrocarbon deposits by expanding petrochemical plants, which would significantly increase Iran’s revenues compared to income from crude and gas exports that have no added value.
