Iranian Oil Equipment Firms Need to Explore Regional Export Markets

 Iranian Oil Equipment Firms Need to Explore Regional Export Markets Iranian Oil Equipment Firms Need to Explore Regional Export Markets

Oil Minister Bijan Namdar Zanganeh on Monday urged domestic producers of oil equipment to double their efforts and tap into regional markets.

“Iranian oil equipment manufacturers should look beyond domestic markets and keep an eye on exports to neighboring countries,” Zanganeh said in a meeting with local authorities of the oil province of Khuzestan in south Iran, Mehr News Agency reported.

The minister referred to Iraq as a market with huge potential and recalled the lifting of punitive economic sanctions as a great opportunity.

Iran was deprived of much-needed equipment and technology to develop its oil and gas sector after the toughening of international restrictions in 2011 and 2012 that ostensibly targeted Tehran’s nuclear program but significantly undermined its foreign trade and banking relations.

Tehran started to gain access to billions of dollars in frozen oil revenues and equipment after the sanctions were scaled back in mid-January following a landmark deal with the six world powers in July last year on placing time-bound limits on its nuclear program.

Zanganeh added that the Oil Ministry has a mandate to support Iranian producers of oil equipment and create a list of top manufacturers to compete in oil and gas tenders.

In 2014 the ministry set up a committee to pursue the production of 10 major categories of equipment for oil and gas industries, including turbines, compressors and drilling bits.

“Boosting the production of these 10 categories, which comprises thousands of equipment, has created many jobs. Local firms in Khuzestan can produce all parts and equipment for refineries except some machinery.”

However, officials say domestic manufacturers face stumbling blocks when it comes to penetrating the huge export market.

According to Mohammad Hassan Didevar, member of the board of Iranian Petroleum Industry Equipment Manufacturers, Iran’s opaque regulations in the financial and banking sectors and the government-dominated economy create big loopholes making way for rent-seeking and leave little room for private companies to boost exports.

The government has recently asserted that it will create the conditions for both Iranian and foreign producers of oil/gas equipment to compete on an equal footing.

Earlier this year, an official at the Oil Ministry said foreign companies are offering attractive proposals to take part in Iran’s energy sector, namely exploring and developing oil/gas fields, building power plants and promoting green energy industries.