Economy, Domestic Economy

Falling Oil Prices: a Blessing in Disguise

Falling Oil Prices: a Blessing in DisguiseFalling Oil Prices: a Blessing in Disguise

The managing director of Petrochemical Commercial Company and a member of Iran Management Consultants Association, Mehdi Sharifi Niknafas believes the decline in global oil prices and the consequent reduction in the country’s oil revenues can be viewed by Iran as a golden opportunity to develop the upstream, midstream and downstream oil industries and create more value added to replace the lost revenues from crude oil sale.

 “We can gain a stronger foothold in the regional and international markets by producing unique petroleum products of certain grades. Iran is connected to at least 15 neighboring countries (by land and maritime borders) and should target these countries’ markets,” said Niknafas, reported.

To achieve this objective, the official suggested that a government authority should be appointed to oversee the developments in the oil and gas sector. Underlining the important role of the government as well as the managers of petrochemical industries’ in boosting the sector’s production level “from one million metric tons to 60 million metric tons over the past decades,” through designing comprehensive national plans and finance strategies, he called on the government to take similar measures to develop the oil industries.

“The private sector should also be motivated to draft comprehensive production plans for the downstream and midstream industries and to obtain the necessary permits in line with this goal.  In fact, the government authority should only assume a supervisory role to draw the outlines of the comprehensive plan and prevent any discrepancies, while the private sector should undertake the investments and implementation of projects,” he added.  According to the expert, the government role in the petrochemical sector “has already been reduced to that of a regulator.”

“I expect that the private sector will show interest in investing in this area in light of the previous successful experiences. This is the best time to extend the value chain in the petrochemical sector which would in turn create more employments and generate higher revenues.”