Talks are underway to buy shares in refineries of other countries to help the country secure its international oil market share, National Iranian Oil Company's managing director said.
"Buying stakes in foreign refineries, especially in India and China, will not only help guarantee long-term demand for Iranian oil to produce value-added products namely gasoline, but will also underpin our bargaining power for long-term oil export contracts," Ali Kardor was quoted by ISNA as saying.
To do so the Oil Ministry must first acquire authorization from the government and the parliament.
"Buying 50% shares of a foreign oil refinery will help secure Iranian oil market share," he said, reiterating his call on both the Majlis and government to approve such measures in Europe and Asia. US sanctions on Iran’s oil sector will take effect on November 4
Kardor noted that purchasing a refining plant that is equipped with modern equipment that can process 50,000 barrels per day would cost an estimated $1 billion.
He said buying shares in Chinese and Indian refining companies will be more economically viable for the NIOC as demand for crude in the two countries is growing rapidly.
"There is an intense competition among Iran, Qatar and Saudi Arabia in this regard," he said without elaboration.
According to Wall Street Journal in July 2012, Tadbir Energy Development Group had unsuccessfully bid for the Petit-Couronne refinery in France.
Another WSJ report in the same year suggested that Iran’s Ghadir Investment Company was trying to buy a refinery controlled by the Swiss oil company Tamoil Suisse based in Libya.
Acquiring such strategic assets in other countries gives the government valuable “leverage to keep Iranian oil flowing at reasonable prices,” the NIOC boss said.
The NIOC has been in negotiations to buy the stakes of a refinery owned by India’s Essar Oil as part of a long-term supply deal since 2015, yet it has yielded no results.
In the past Iran owned shares in several refineries in India, South Korea and South Africa, but over the past few years it sold all its assets, with the exception of a small refinery in India. The official did not say why the assets were sold.
Kardor opined that oil and gas development ventures in Iran are attractive to foreign companies because of the relatively lower cost of production and exploration.
A barrel of Iranian crude costs $4 to produce, making Iran one of the world's most attractive places for exploration and production besides Saudi Arabia, Iraq and the UAE.
According to published data UK oil is the world's most expensive crude to produce, costing roughly $44 a barrel.
Oil production in Brazil, Nigeria, Venezuela and Canada is costlier than in the US, data show, as drillers in the US use advanced and more efficient technologies.
