A piercing irony, you will agree

A piercing irony, you will agree

Sergey Savchuk

The executive director of the largest Iranian oil refinery National Petrochemical Company (NPC) addressed Russia in general and its energy companies in particular. Official Tehran offers Moscow and Russian profile players to sharply increase investments in the oil refining complex of Iran, under which the local authorities offer very favorable terms of cooperation, benefits and significant prizes.
Before moving on to details and details, just a few words about the prerequisites.
According to Iranian sources, immediately after the religious revolution of 1979, when the Islamic clergy came to power, having removed the last monarch, the leaders began to think about how to use the natural resources they had inherited with maximum benefit for the state b-udget. And there was something to dispose of: today, recoverable oil reserves in Iran are estimated at 159 billion barrels of oil, and n-atural gas – at 33 trillion cubic meters. Forty years a-go, the resource base was estimated a little more mo-destly, but it was still clear that a real treasure chest was buried in the desert land of the former Persia.
Tehran tried to build a powerful sovereign oil refining industry. The authorities have proclaimed a course towards the production of products with high added value, as well as the conversion of intellectual efforts into budget revenues. It turned out, however, not all. The reason for this was that the new leadership almost immediately entered a geopolitical tailspin, grappling with America. However, Iran’s relations with other neighboring and not so neighboring countries were also, let’s say, rather changeable. The sharp increase in demand for crude oil and fuel, which began in the 1980s, also did a disservice. The boom in the world market made commercial crude oil trading profitable, which brought quite decent incomes to the treasury of the Islamic Republic.
Today, Iran entered with the gas and petrochemical industry in its hands, which is represented by a single company – the NPC mentioned above. This is a state monopoly and the second largest enterprise in the Middle East for the export of secondary hydrocarbon processing products, namely polyethylene, methanol, gasoline, ammonia and other equally useful components.
The appeal to Russia is not accidental.
At the moment, the leading countries in the field of oil refining (quite deservedly) are the United States, Japan, Germany, France, China and the UK. If China is excluded from this list, it will be found that the Iranians have very cool relations with everyone else. Moreover, Tehran has been in a furious clinch with the United States regarding the Iranian nuclear program for many years, and after the States under the leadership of Donald Trump withdrew from the “nuclear deal” (the so-called JCPOA)), the situation reached a dead end. Several thousand sanctions were imposed on Iran, including the seizure of state assets in foreign banks worth tens of billions of dollars, and severe restrictions were imposed on the export of Iranian oil, which paid off, but did not force Tehran to admit its defeat.
Iran was constantly looking for partners and investors and, in continuation of this policy, in 2019 signed a cooperation agreement with China for a period of 25 years, but, judging by current trends, this did not reach the desired level.
It must be said that Russian-Iranian relations in the field of energy have long and strong roots. The domestic presence in the region is extensive and began long before the massive entry into the local market of China.
Back in 2015, the Ministry of Fuel of the Islamic Republic and the Ministry of Energy of Russia signed an agreement stipulating investments in the oil and petrochemical industries in the amount of $50 billion with a further expansion horizon. According to the signed document, leading Russian companies received preferential licenses for exploration and subsoil use of a number of deposits. So, Gazpromneftegaz got the oil fields of Changouleh and Cheshmeh-Khosh, Zarubezhneft got Aban and Paydar Gharb, and Tatneft could work at the Dehloran field. Around the same time, the National Iranian Oil Company (NIOC) signed a memorandum of cooperation with the Russian company Lukoil”, which departed seven oil fields at once, including such large ones as Ab Teymour and Mansouri.
As an interim outcome, Deputy Minister of Fuel Amir-Hossein Zamani-Nia and Deputy Minister of Energy Kirill Molodtsov signed an agreement, the terms of which implied (we quote) “exploration, construction and operation of oil producing and oil refineries, transportation of associated gas, supply of secondary petroleum products, as well as production of on-site necessary equipment and technology transfer to local enterprises”.
The Russians were offered such benefits not for beautiful eyes. At that time, our oilmen were at the peak of their external expa-nsion, for example, Mosc-ow was ready to invest in the construction and mode-rnization of the Nebras pet-rochemical plant in the so-uthern part of Basra provi-nce in Iraq. The deal did not take place then, largely due to the active opposition of our American friends.
Today, Russia confidently holds the world record for the number of sanctions imposed on it, which, of course, could not but affect the work of key industries, including oil refining, where the share of imports is very high. Moreover, the Russians do not particularly notice this, because the sector is gradually getting used to living under eternal pressure and manages to provide for internal needs.
The Iranians are well aware that in Russia there is a whole cluster of enterprises producing secondary products of oil refining. The leading regions in this direction are Tatarstan, Bashkortostan, Samara and Nizhny Novgorod regions. There and in a number of other subjects, unnoticed by the general public, such enterprises as Samarakhimprom, Salavatnefteorgsintez, Bashkiria Chemistry, Uralkali, Ufaorgsintez, Silvinit and others work.
To understand what comes out of their workshops and what interests Iran so much, we add that the petrochemical industry is considered a key one in the system of any state and belongs to heavy industry, that is, it provides industrial stability and large budget revenues. Petrochemists produce all kinds of synthetic materials, such as rubber, rubber, ethylene, polyethylene, active surface and detergents, mineral fertilizers. The Russian chemical industry is over seven thousand enterprises whose products are in demand in engineering, construction, agriculture, non-ferrous metallurgy, textile, leather and footwear, woodworking, furniture, pulp and paper and food industries. Iran really needs Russian specialists and experience, but a lot is being offered in return.
As a main prize, Tehran is offering Russia preferential use of seaports along its entire coastline (5,600 kilometers). The use of the Iranian route will allow Moscow to jump out from under the influence of Western restrictions. The fact is that US sanctions on the trade in petroleum products apply to Iranian ports, but not a single European one. Even in the period 2011-2015, when Washington poured sanctions on the Persians like a cornucopia, Tehran calmly traded in crude oil and a wide range of its processing with China and other Asian countries. In fact, we are offered a southern analogue of the Northern Sea Route, with the only difference that the production will be located in warm Iran, and not in the Russian permafrost zone.
But the most important thing is different.
According to experts, the profitability of trading in processed products is 15 times higher than selling crude oil. In addition, the rate of return reaches 30-35 percent, which is extremely high, ask any financier.
Cooperation in the field of petrochemistry is equally interesting for both Russia and Iran. At the same time, we cannot fail to note that if at least half of what was voiced is implemented, it will turn out that the United States, with its sanctions, has left Moscow and Tehran no other choice but to stop simply trading in oil and finally start processing it, earning much more on it. of money. A piercing irony, you will agree.

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