EghtesadOnline: Many outdated Iranian oil and gas refineries are posting losses or hardly operating at breakeven point, but a new wave of foreign investments will help the aging facilities significantly bump up their profit, a top oil official said.
Abbas Kazemi, managing director of the National Iranian Oil Refining and Distribution Company, said agreements with foreign investors in Iran's downstream sector will help upgrade aging refineries and create new jobs, IRNA reported on Saturday.
“For many oil and gas processing facilities, it is not profitable to continue their operations. But agreements on rehabilitating these units will increase their production of fuels with higher value-added and boost their profit,” he added. The official pointed to a $3 billion deal signed with Chinese companies in March to renovate Abadan Oil Refinery in Khuzestan Province.
Iran's oldest crude oil processing facility and once the world's largest oil refinery will be reconstructed by a consortium, which includes the China Petroleum and Chemical Corporation (Sinopec), at an estimated cost of €2.7 billion ($2.87 billion) mostly through Chinese finance and the know-how of Italian, French and Danish companies, Financial Tribune reported.
About 45% of Abadan refinery's output are mazut, which is barely worth one-third of crude oil. Asked about the $2.2 billion agreement with South Korea’s Daelim Corporation last year to renovate and expand Esfahan Oil Refinery in Isfahan province, Kazemi said the deal is yet to be finalized.
A South Korean-Japanese consortium signed a preliminary agreement, worth $3 billion, this month to develop Siraf Refining Park, a major downstream project in the southern Bushehr Province. The agreement was signed between executives of Siraf Refining Park and South Korea’s Hyundai and Daelim Corporation as well as Japan’s Chiyoda Corporation at Daelim’s headquarters in Seoul.
It entails the funding and construction of eight new petroleum processing facilities in Siraf by the East Asian consortium. According to IRNA, Iran is in need of $15 billion in investment to upgrade its dilapidated refineries.