x Abu Dhabi, UAEFriday 19 January 2018

Iran seeks new foreign refinery companies

Search comes as the country dumps western oil companies from its biggest gas project.

MANAMA // Iran is seeking foreign investment in its refining sector even as it dumps western and, reportedly, Turkish oil companies from its biggest gas project. "We are asking investors and joint ventures to invest in new refineries," Shahnazi Zadeh, the Iranian deputy oil minister, told an oil conference on Monday in Manama, Bahrain. "We have introduced new rules to make projects attractive."

The incentives included "government assurance" that Tehran would buy products from foreign-owned Iranian refineries at international market prices, discounts on feedstock supplies and tax breaks, said Mr Zadeh, who is also the managing director of the state-owned National Iranian Oil Products Refining and Distribution Company. But Tehran's push to attract foreign financing for its ambitious programme to expand Iranian refining capacity coincides with a major upheaval of its gas development plans.

On Sunday, Iran's oil ministry cancelled a deal with Royal Dutch Shell and Spain's Repsol to develop phases 13 and 14 of the South Pars gas development, according to the semi-official news agency Mehr. They were replaced by a consortium led by Khatam al Anbiya, the engineering and construction company owned by the Iranian Revolutionary Guards, Mehr said. Earlier, Iranian media reported Turkey's state-owned Turkish Petroleum Corporation had been replaced by another all-Iranian consortium led by Khatam al Anbiya as the developer of phases 22-24 of South Pars.

But Ahmet Davutoglu, the Turkish foreign minister, rejected the initial reports in Tehran on Tuesday last week with his Iranian counterpart Manouchehr Mottaki. Mr Davutoglu called for extended co-operation on energy between the two countries. Iran is the second-biggest OPEC oil exporter and also has the world's second largest proved gas reserves. The giant South Pars gas and condensate field is part of the world's largest known gas deposit, which Iran shares with Qatar.