Leading European and Japanese companies are back to negotiate purchasing Iran’s petrochemicals as western sanctions over Tehran’s nuclear program are loosening, Mahdi Sharifi, managing director of Iran Petrochemical Commercial Company (PCC) told reporters on Sunday.
The companies had left Iran over escalating western sanctions, but now have come back to the negotiating table with Iranian suppliers and are more likely to conclude contracts. However, some companies are still confused as US warnings linger.
“We have had constructive negotiations with several representatives of foreign companies which participated in the 9th International Exhibition of Plastic, Rubber, Equipment and Machinery. We hope the negotiations bear fruit before the end of the fair on Sep. 29,” SHANA quoted Sharifi as saying.
The PCC with 25 sales agencies is exporting Iranian petrochemicals to over 30 countries across the globe, as the company after the National Iranian Oil Company, is the largest exporter in Iran, Sharifi said.
Over 35 percent of the country’s petrochemicals were exported through the PCC in 2013. However, as the western sanctions over this category have been suspended, it is estimated that export of petrochemicals may surge in the current year.
At the end of November 2013, the P5+1 (United States, United Kingdom, France, Russia, China plus Germany) reached an agreement with Iran over its nuclear energy program. The suspension applied for an initial period of six months.
Iran and the P5+1 have agreed to extend negotiations to reach a final comprehensive agreement on by November 24, 2014
Sharifi went on to talk about the 48th European Petrochemical Association (EPCA) annual meeting to be held in October 4-8 in Vienna -- where major petrochemical companies will be present, saying “we hope to sign long-term contracts with potential customers on the sidelines of the event.”
EPCA’s annual meeting is a world-class business event for the chemical business community, welcoming top international speakers, CEOs, business leaders and service providers from around the world.
“The prospect of Iran exporting petrochemicals seems bright compared to last year’s gloomy atmosphere. Given the suspension of banking and insurance restrictions, we will initiate to export directly to the EU,” Sharifi said.
Once sanctions are lifted, European companies will be able to open letter of credits to invest in petrochemical development plans.
Sharifi told reporters that China, India as well as Mediterranean states are the primary customers of the PCC, announcing that over 1.4 million tons of polyethylene was exported to China in 2013, of which, 30 percent were handled through the PCC.
EU sanctions prohibiting European insurers and reinsurers from covering tankers carrying Iranian petrochemicals came into effect on May 1, 2012. Around 90 percent of the world’s tanker fleet, including those operated by Iran’s Petrochemical Transportation Company, is covered by western-based protection and indemnity (P&I) clubs, which insure against personal injury and environmental clean-up claims, according to Reuters.
Given the suspended sanctions, there is no impediment to transfer money and technology to the petrochemical sector. However, US politicians keep saying sanctions are still in effect, which makes those who wish to cooperate with Iran hesitant.
