Qatar and the UAE, have adopted best practices to keep their energy sector rolling; something Iran must do after years of sanctions.
This was stated by Carlos Guevara, a member of ShiftIN Partners’ leadership team, in an interview with Financial Tribune in Tehran. He recommended that Iran should prepare a draft plan for its industry, instead of following the developed countries.
ShiftIN Partners is a global strategy management consulting firm that provides services to companies operating in financial, oil and gas, utilities and government sectors. It was founded in 2011 and has offices in Lisbon, Riyadh, Abu Dhabi and Dubai.
“Iran has a lot of advantages, by which it can compete with global rivals and even win the game: it sits on rich hydrocarbon resources, it is located in a strategic geographical region, and most importantly, it boasts a large pool of young, educated and talented workforce,” he said.
Guevara noted that Iran has to adjust itself with the outside world after some international sanctions against it were lifted on Jan. 16.
“The world has changed a lot compared to that of pre-sanctions period. Markets are further globalized now. The speed of business is faster than before. And companies and markets are connected like never before. These three factors make a very complex scenario for Iran in this era,” he said. The expert announced that the ShiftIN’s Iran office has recently been opened and the firm started operations in the Persian Gulf country.
“We are happy to have clients from Iran’s petrochemical industry. We are working with Arya Sasol Polymer Company and Bandar Imam Petrochemical Company, to name a few. Outside Iran, we have experience of cooperation with many oil and gas giants, including Shell and BP.”
Middle East Potential
Referring to the firm’s history of operations in the Middle East, Guevara said it has been cooperating with Middle Eastern countries since 10 years ago, seeing them fast developing “from nothing”, as they are quickly connecting to the global economy by employing technology. “They [Middle East nations] do not have to follow the path of European countries. What Europe used to do in 50 years, they can do in five years,” he said.
"For instance, SABIC, one of the five largest petrochemical groups in the world, was just a local petrochemical group in Saudi Arabia but today it is a global company. They have done this in 10 years. They took advantage of the crisis in the US and Europe, and bought GE Plastics in the US. Thus, instead of developing the US market, they bought the company."
He noted that to develop as fast as possible, one should devise a new model and purchase technology. Guevara stressed that after the acquisition of the model, it should be adapted with the country’s unique conditions to prevent a cultural backlash.
The international consultant also pointed to one of the main problems of Iran in returning to the global economy now that sanctions are lifted by regaining the lost markets.
“Iran should make new partnerships with international firms that have already established their position in a certain market. Thus, Iran does not need to establish a market by its own from scratch. There are many foreign companies keen to be Iran’s partner,” he said.
Challenges and Priorities
Asked whether Iranian managers are serious about revamping Iran’s industry, Guevara said, “Yes, I believe the Iranian government has showed the will to change, but it should be cascaded down to all managerial levels. Iran has realized the importance of being connected to the global economy.”
Another challenge facing Iranian industry is the complexity of projects, especially in oil and gas sector, which is normally not simplified in Iran. The expert proposed that “to simplify the managerial processes, mid-ranking managers should be empowered through allowing them to take major decisions”.
“In addition, perfection is the enemy of execution. So, when a company aims at implementing a far-fetched plan, it may take years of thinking and planning, but no execution takes place. Execution is about quickly testing your idea, even if it is not perfect.”
Asked about investment priorities Iran should set now that many Iranian oil wells are aged and the country intends to return to the global arena in a short time, Guevara noted that it is a strategic decision that should be made by Iran, but there is a global trend toward downstream projects.
