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Oil Show Reflects on
Failing Sanctions |
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Managing director of Total E&P Iran Co. believes that Iran sanctions will
damage global economy in the long run.
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An
overall analysis will prove that Iran sanctions have failed and the taboo has
been shattered. Of course, their possible threats and structural weaknesses of
the Iranian oil industry should not be overlooked. Although Iranian statesmen
have clearly indicated that they are serious in negotiations to attract
foreign investment to Iranian oil industry, negotiations have not been
generally successful and, perhaps, a reason for that failure is weak
performance of Iran's oil diplomacy. The following is a summary of viewpoints
provided by foreign guests and participants in the 16th
International Oil, Gas, and Petrochemicals Exhibition in Tehran.
Managing
director of Total E&P Iran Co. believes that Iran sanctions will damage global
economy in the long run. Bernard Sudreau, managing director of Total E&P Iran
Co., added that Iran enjoys an important position in the world because of its
huge oil and gas reserves. He added that if investment in the Iranian oil and
gas industry stopped right now, its impact on the global economy would be
evident in 5-6 years.
Managing
director of OMV in Tehran noted that his company has taken part in the oil
exhibition to indicate its interest in continued cooperation with the Iranian
oil companies. He said that OMV has been a regular presence in the exhibition
throughout the past 10 years to present its capabilities. Thomas McCulloch
stated that annual presence of his company in oil and gas exhibitions in
Tehran proved that the company did not care for Western countries' sanctions
against Iran.
Manager
of a Chinese company also noted that sanctions imposed on Iran by the United
States and the West have not barred China's CNLC company from cooperating with
Iranian oil companies and its officials were bent on developing good relations
with the Iranian oil industry.
Po Ming
Chuan, deputy director of CNLC, which is affiliated to China National
Petroleum Company (CNPC), added that rich oil and gas reserves in addition to
the existing potentials for developing the country's oil and gas industry will
help Iran promote its status in global energy markets. He said Iran was a safe
place for investment, emphasizing that there are many opportunities for the
expansion of bilateral cooperation between Iranian and Chinese oil companies.
Po Ming
also stated that Iranian specialists in oil industry can exchange their
experiences and technical know-how with foreign companies in order to achieve
self-sufficiency in manufacturing oil industry equipment and compete with
foreign rivals.
Meanwhile, managing director of a Dutch company noted that he saw bright
outlooks for cooperation with the Iranian oil industry. He added that Western
sanctions have not affected cooperation between Iranian companies and Krohen
Company which was determined to continue cooperation with Iran for the
procurement of equipment needed for implementation of oil projects.
Managing
director of Rongsheng Machinery Co. from China stated that rich oil and gas
reserves in Iran have increased enthusiasm of international oil majors to
invest in the Iranian oil industry. Gohyuan added that Iran was a good market
for selling oil equipment manufactured by Rongsheng Machinery Co. and due to
its rich oil and gas reserves, the Iranian oil industry was a very attractive
investment opportunity for foreign companies.
Managing director of South Korean Metal Korea Co. stressed that sanctions have
been ineffective and Korean oil companies continued to work with Iran. James
Han added that given the increasing number of oil, gas and petrochemicals
projects in Iran, Metal Korea Co. could closely cooperate with the Iranian
counterparts for procurement of oil industry equipment. He emphasized that
there are good relations between Iran and South Korea and Korean companies
cooperated with
Iran
in various fields regardless of the Western sanctions. They had no problem
with financing transactions with Iran. The manager of the Korean company also
pointed to huge oil and gas reserves of Iran and added that many oil consuming
countries including South Korea had to cooperate with Iran and this issue will
raise Iran's importance in international markets. James Han also stated that
the interest Iranian specialists show in achieving self-sufficiency in
technical know-how and manufacturing equipment, promised a bright future for
the Iranian energy industry.
An
official of a Russian oil company stated that there is high enthusiasm for
cooperation with Iran
in upstream and downstream oil projects. Official in charge of the
international section of Zarubezhneft Co., a state-run oil company, stated
that his company was fully ready to work with Iran in all upstream and
downstream projects. He added that the company was opening a Tehran office in
order to work in oil exploration and drilling as well as designing and
building refineries. He said in negotiations with the Iranian delegates,
solutions have been found to thwart Western sanctions and provide necessary
parts and funds for Iran by the Russian companies.
Representative of the state-run Qatar Petroleum Co. opined that Iran will turn
into the biggest exporter of petrochemicals in the Middle East. Abdurrahman
Ali Abdullah, director of trade and business section of Qatar Petroleum, added
that western sanctions against the Iranian oil and gas sector have been
ineffective and despite intensification of pressures form the west, activities
in various oil, gas and petrochemical projects are going on in Iran. Referring
to Iran's petrochemical projects to increase the country's share of the world
markets, he noted that when the underway projects are finished, Iran will be
among the biggest producers and exporters of petrochemicals in the Middle
East.
Hassan
Kazemi, member of the Society of Iranian Petroleum Industries Equipment
Manufacturers, pointed to capacities of the Iranian private sector in oil
industry, saying that during 2010, members of the Society procured 6 billion
dollars of equipment. "However, if the figure is compared with production
growth in automobile industry and achievements of Society of Iranian Car
Exporters, it will seem small."
He added
that sanctions provided Iranian statesmen with a new opportunity to attach
more importance to quality and quantity of domestic products.
"However,
we can always complain that when officials can buy a commodity from abroad,
they ignore domestic industry and products. When there are sanctions, they
turn around and focus on domestic production and industry and this is a major
weakness for the Iranian industries," he added.
Kazemi
stated that to reduce impact of sanctions, they have proposed to the Ministry
of Petroleum to let the Iranian private sector manufacture and procure those
commodities which can be produced inside the country due to availability of
technology and manpower.
"This can
be done by establishing domestic consortiums and concluding contracts with the
private sector," he added.
The
official noted that out of about 30 billion dollars of equipment needed for
the implementation of the Fifth Economic Development Plan, more than 15
billion dollars of equipment can be manufactured in the country, but at
present, only 6 billion dollars of equipment are made in the country.
He added
that support for domestic production was a major challenge facing the Iranian
oil industry.
Kazemi
stated that the most important problem troubling domestic manufacturers was
the absence of a large-scale strategy for development of domestic industry.
"We have made many efforts to formulate that strategy, but domestic
manufacturers are not properly supported in our country. On the other hand,
Chinese companies have entered our market in the past 2-3 years and have
caused us suffer heavy losses," he added. |
