Call for Restoring Past Petrochemical Status

Call for Restoring Past Petrochemical Status
Call for Restoring Past Petrochemical Status

A deputy oil minister criticized the disorganized and parallel export operations of petrochemical companies and said the companies should unite to launch a new round of rivalry with Saudi Arabia’s petrochemical giant SABIC.

“Prior to the privatization of Petrochemical Commercial Company, Iran had a key role in the sale of petrochemical products in the region,” Marzieh Shahdaei was also quoted as saying by Mehr News Agency.

She added that Iran’s past reputation in the sector's commercial activities indicates that SABIC, which is currently Iran’s rival, had embarked on joint projects with the country.

Founded in 1976, SABIC—or Saudi Arabia Basic Industries Corporation—which is a diversified manufacturing company active in chemicals and intermediates, industrial polymers, fertilizers and metals, has operations in over 50 countries with a global workforce of over 40,000.

It is the largest public company in Saudi Arabia, but the Saudi government still owns 70% of its shares.

Shahdaei said that according to international rating institutes, by exporting 50 million tons of products, SABIC is the fifth largest petrochemical company in the world.

"When Iranian petrochemical companies, which are active in the export of products, become united, Iran can easily be ranked high on the list of the world’s largest petrochemical exporters, thanks to the vast potential in the Persian Gulf country’s petrochemical industry," she said.

The official, who is also managing director of National Petrochemical Company, stressed that NPC is seriously seeking cohesion in the commercial section of the industry in the current Iranian year (started March 20). She added that with the implementation of the scheduled plans, Iran’s annual petrochemical production will reach 160 million tons in the next 10 years.

To achieve this ambitious goal, Tehran hopes to raise $70 billion in petrochemical investment over the 10-year period.

With a nominal production capacity of 60 million tons, Iran’s petrochemical output reached 44 million tons in the last Iranian year.

Iran sits on one of the world’s largest oil and natural gas reserves, holding 158 billion barrels of proven oil reserves and 34 trillion cubic meters of gas reserves.

  Negative Competition

Shahdaei noted that competition for gaining a bigger share will only benefit consumer countries, saying China is currently importing Iranian petrochemicals at low prices.

“This is while Iran has incurred much costs and investment for manufacturing the products. In other words, with our investment, other countries are increasing their marginal profits,” she said.

Shahdaei stressed that Iran’s disorganized presence in international markets cannot lead to a brand name for any Iranian petrochemical producer.

According to the NPC chief, Iran needs domestic or foreign trade companies in the target countries to preserve its market share.