Competent companies can and must play their role in developing oil and gas projects, the head of the Society of Iranian Petroleum Industries Equipment Manufacturers said.
"Now that foreign manufactures are unwilling (or unable) to collaborate with Iran's energy sector due to the US sanctions, we need to create the conditions for domestic firms to make maximum use of their ability in handling major projects," Reza Khayyamian told ILNA.
It is obvious that domestic companies must comply with certain standards to be able to have a role in local markets, he said.
"The oil and gas industry is not a place for trial and error…a minor miscalculation can lead to irreparable damage," he asserted. By the same token, not trusting domestic producers will add to the dole queues as a many firms are closer to bankruptcy because of the trend in importing cheap Chinese products instead of using domestically-made machinery and equipment, he warned.
Trade between Iran and China has been to a large extent influenced by the sanctions imposed by the United States. Based on available data, the balance of trade between the two countries has always been in Beijing’s favor because Chinese exports to Iran far exceed its imports.
The official said instead of trumpeting that French energy major Total has refused to help develop the South Pars Gas Field's Phase 11, oil officials should focus on the ability of domestic oil/gas to deliver.
Total officially left Iran after the US reimposed tough new sanctions on companies that do business with and in Iran.
According to Khayyamian, mega projects like South Pars Phase 11 can be tendered locally with the help of small foreign firms if they are offered as smaller contracts.
"We Have Been Here Before"
Bypassing the unjust US restrictions to acquire advanced oil and gas equipment and materials is “no big deal for private companies simply because they have dealt with similar situations in the past.”
Underscoring the abundance of raw materials for catalyst production inside the country, he said a kilo of catalyst that was imported costing $240 is now produced locally at a much lower cost ($40).
"Foreign currency rates have almost quadrupled since March when several agreements were signed with domestic manufactures," he said, noting that most producers will be insolvent unless prices are modified based on the new foreign exchange rates that have long entered prohibitive territory and are hurting the manufacturing sector as a whole.
Oil Minister Bijan Namdar Zanganeh has said making optimum use of Iranian manufactures is a top priority.
"The ministry has purchased over a million tons of petrochemicals and concluded deals worth €550 million with producers of seamless pipes," Zanganeh said.
This is while the law calls for €100 million worth of deals with local manufacturers, he has been quoted as saying.
Reiterating the government’s bid to prioritize domestic products over imported goods, the minister said only goods not produced domestically should be imported. He also put special emphasis on the quality of goods made by domestic companies and their ability to compete.
