Iran will help Venezuela restore its petrochemical production capacity, Oil Minister Javad Owji said during a visit to the Venezuelan capital Caracas on Tuesday.
“Venezuela’s petrochemical complexes, with a total production capacity of 12 million tons per year, had come to a standstill due to sanctions. Now with the help of Iranian companies’ expertise in technical, engineering and catalyst sectors, the Latin American country can produce petrochemicals like ammonia, urea and polyethylene, and market them internationally,” Owji was quoted as saying by the Oil Ministry’s news service Shana.
According to the contract signed between the two countries, an Iranian company will carry out repair works on sections of a petrochemical plant in Venezuela and in return get a share in the sale of products.
Owji said only 2 million tons of Venezuela’s petrochemical production capacity is active and the rest has become idle due to the US sanctions.
The Iranian Oil Ministry estimates that domestic companies’ involvement in revitalization of Venezuelan petrochemical plants could account for a third of the country’s total petrochemical output.
The minister said the petrochemical offer came after the Oil Ministry started overhauling and developing Venezuela’s refineries and exporting oil and gas condensates to the Latin American country.
Refining Projects
Iranian companies have already contributed to repair and renovation projects at Venezuelan refineries under contracts that allow Iran to process its crude oil in those refineries and sell the products in regional markets.
“Having a refining capacity of 1.4 million barrels per day, the four refineries of Venezuela had been abandoned due to sanctions and foreign experts’ withdrawal from projects,” recalled the minister, adding that Iran has promoted energy diplomacy and held talks with Venezuela in the past two years.
“Iran has so far exported 2.8 million components and equipment to Venezuela to operate its oil refineries at full capacity. A considerable part of the Latin American country’s refining capacity has been restored,” he said.
Tehran and Caracas on Monday signed several documents and contracts to cooperate in the downstream and upstream sectors of the oil and gas industry.
Owji and his Venezuelan counterpart signed the contracts to develop oilfields and terminals, and restore refining and petrochemical capacities.
Relations between the two countries entered a new phase last year, when they signed a 20-year cooperation plan in Tehran last year, pledging partnership on oil, defense and other issues.
That deal includes repairs to oil refineries in Venezuela, which has the world's largest crude reserves but has struggled to produce enough gasoline and diesel, leading to intermittent shortages that have forced drivers to queue for hours.
Iran has provided fuel and diluents to convert Venezuela's extra-heavy crude into exportable varieties and since 2020 has supplied parts for repairs to the refining plant.
Iran and Venezuela hold about 40% of the world’s oil reserves and both countries’ oil sectors have been hit by US unilateral sanctions.
In spite of sanctions, Iran has managed to make 85% of equipment needed by the oil industry, not only meeting domestic needs with homegrown equipment, but also exporting its technical and engineering services to regional countries and other oil-rich states, including Venezuela.
Owji on Monday began a tour of Latin America. Accompanying President Ebrahim Raisi, the minister is heading a delegation to cement Iran’s relations with Venezuela, Nicaragua and Cuba in the upstream and downstream sectors of the energy industry.
Iran and the three Latin American states will hold talks on cooperation in the fields of oil, gas, petrochemical, refinery, technical and engineering services, technology, exports and human resources, and sign contracts and memorandums of understanding.
