BASF Says Iran Investment in Limbo

BASF Says Iran Investment in LimboBASF Says Iran Investment in Limbo

Germany's BASF, the world's largest chemical company, said it was in talks with Iran over a possible investment of its oil and gas division in the country but no decision was on the cards because of uncertainty over the status of economic sanctions.

"We can't see that the lifting of sanctions is being implemented at the speed that was initially expected," BASF Chief Executive Kurt Bock told a news conference after the release of 2016 earnings, Reuters reported.

"We are trying to assess whether it's possible for our oil and gas business to gain a foothold in Iran. We have been invited by the national authorities. The evaluation process is ongoing," he said, adding the outcome was uncertain.

He specified that such talks were limited to investments in oil and gas exploration and production and did not extend to downstream petrochemical processing plants. According to published reports, BASF has proposed to invest $6 billion in a petrochemical plant in the southern regions. 

The CEO also said he still saw no necessity for the chemicals group overall to pursue any "transformational" takeover deals, even as peers Bayer and Monsanto as well as Dow and DuPont are merging.

The growing tensions between Tehran and Washington under new US President Donald Trump's administration has cast a shadow on the future of Iran's trade ties with European companies who seek investment opportunities in the country's economic and energy sectors after international sanctions against Tehran were lifted last year.

Earlier this month, Patrick Pouyanne, the chief executive of French energy major Total S.A., said a final investment decision on a $2 billion gas project in Iran hinges on the renewal of US sanctions waivers.

"There are two executive orders that are supposed to be renewed before summer. So, either the waivers are renewed and as such, Iran's nuclear deal will be respected, which will allow us to execute the contract and we'll do so, or they (the US) decide to tear up the Iran nuclear agreement. In that case, we'll not be able to work in Iran," Pouyanne said.

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