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Domestic Economy
Thu, Apr 24, 2008

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$500b Needed
For Hydrocarbon Sector
Kenya Keen on
Tractor Assembly Plant
Chabahar Important for Afghan Economy
Sanctions Can Wait
Compiled by Ghanbar Naderi
Samsami Outlines Priorities
Dam Tender Due
ICCIM Chief in Saudi Arabia
Handwoven Carpet Festival Underway

$500b Needed
For Hydrocarbon Sector
Oil Minister Gholamhossein Nozari says attracting finance would be the most important challenge facing the oil industry in the coming years.
Oil Minister Gholamhossein Nozari said Iran plans to invest $500 billion in the oil sector until 2024.
Referring to the need for $500 billion of investments in oil, gas and petrochemical sectors by the Iranian year 1403 (2024), he called for establishing a specialized oil industry development bank with the aim of financing projects, expanding employment and increasing fund allocation.
According to Fars news agency, Nozari was speaking at the 13th International Oil, Gas and Petrochemical Exhibition in Tehran, which was held during April 16-20.
The minister said that attracting finance (investment) would be the most important and the most essential challenge of the oil industry.
“Based on the plan, by 2024 we must invest $500 billion. With a minimum of 60-70 percent of that amount, we would create employment for domestic contractors, consultants and manufacturers,“ he said.
He noted that out of that sum, $121 billion would be used for meeting the targets of the Fourth Five-Year Economic Development Plan (2005-2010), and added, “On the other hand, given that oil and gas sectors have a 28-percent share in the national economy, it seems that the establishment of an oil industry development bank would be necessary to facilitate and expedite the implementation of oil industry projects, attract a large amount of capitals and support the private sector to invest, especially in downstream sectors, in refineries and petrochemical industries.“
Referring to the specialized banks in housing, agricultural, industrial and mineral sectors, which together provide 25 percent of the gross national product, the minister pointed out, “Oil projects require huge investments which domestic banks are incapable of providing. Therefore, a specialized bank can attract some of the needed financial resources from foreign banks. It can also make use of small domestic capital for implementing major projects.“
Underlining the capabilities of domestic companies to participate in oil industry plans and projects, he pointed out, “The participation of more than 800 domestic companies (in the exhibition) demonstrates this fact, and one of the ways of activating them is to support domestic products.“
According to him, “To support domestic products, from now on tenders will be continued for three years. In this way, by making long-term plans and getting long-term orders, manufacturers will be able to invest with greater confidence. Also, another outcome of this decision would be the training of more manufacturers, creating more jobs and raising the confidence for participation and for investment.“
The minister referred to the record set for oil production after the revolution and increasing the capacity beyond the 4.2m barrels per day threshold.
“The early completion of Azadegan project, increasing the capacity of gas production to more than 500 billion cubic feet per year, the plans to construct six new refineries and to upgrade seven refineries were among the successful projects in recent years.“
Referring to the completion of 12 petrochemical projects in the past year and achieving 24.5 million tons of production per year, he concluded that 12 new petrochemical projects will also be commissioned this year.

Kenya Keen on
Tractor Assembly Plant
Kenyan government has asked Iran to set up a tractor assembly plant in the country to boost the industry.
According to ISNA, Iran Tractor Manufacturing Company is a leading producer of some of the most sought after farming tractors.
Kenya’s Foreign Affairs Minister Moses Wetangula said Monday that the government would look for ways to have the company establish an assembly plant in the country. “We invite the government of Iran to set up a tractor assembly here to tap into Comesa’s 350 million people market,“ the minister said.
“This makes business sense, because Kenya is the entrance to this enormous market.“
Wetangula called on Iranians to invest more in the country, adding that business opportunities are plenty. “Under the new coalition government, Kenya is picking up from where we left when we started squabbling,“ he said, after officially opening the Sarzamin Africa showroom at Panari Sky Center, Nairobi.

Chabahar Important for Afghan Economy
Afghan ambassador to Tehran arrived in Chabahar Free Trade Zone on Tuesday at the head of a delegation.
During the visit, Mohammad Yahya Maroofi held talks with Managing Director of Chabahar Free Trade Zone Organization Mohammad Taher Baqerizadeh and a number of provincial officials on issues of mutual interest.
“Chabahar port is of utmost importance to Afghanistan’s economy,“ the ambassador told IRNA.
Maroofi added that Chabahar can play a key role in linking the two countries. Referring to the investment in Chabahar by some Afghan tradesmen, he said, “We are interested in using investment opportunities in this place.“
On the Iranian government’s proposal to Kabul to make use of the capacities of Chabahar Free Trade Zone, the ambassador termed the proposal as a gift for the Afghan government.

Sanctions Can Wait
Compiled by Ghanbar Naderi
The volume of trade exchange between Iran and China exceeded the $20 billion mark in 2007.
Iran’s trade exchanges with the rest of the world have been the best in years.
As maintained by Managing Director of National Iranian Oil Company Seifollah Jashnsaz, the continuation of Iran’s high oil output attests to the ineffectiveness of sanctions.
According to the official, Iran is producing 4.2 million barrels per day of crude oil which provides ample proof that the country is least affected by western sanctions.
The approval of fresh illegal sanctions on Iran (March 3) marked the third time that the self-appointed bully-boy members of the United Nations Security Council tried desperately to stem the Islamic Republic of Iran’s civilian nuclear program.
However, in light of growing trade exchanges between Iran and the rest of the world--save for a few unfriendly countries--the latest round of economic sanctions is unlikely to be any more effective than the first two rounds.
Consider the two earlier UN Security Council resolutions. The December 2006 resolution curbed international assistance to Iran in mastering the nuclear fuel cycle. The March 2007 resolution called for ’vigilance and restraint’ vis-ˆ-vis new grants, financial assistance, or concessional loans.
Neither moved the country’s popular government. Few expect a different outcome from the new sanctions, which authorize international interception of Iranian imports and tightened monitoring of its financial institutions, along with travel restrictions and freeze on the assets of people and companies involved in Iran’s civilian nuclear program.
According to the Global Security Network, the failure of targeted UN sanctions should come as no surprise.
The US has been on the sanctions treadmill for years. Between 2003 and 2007 the US Treasury Department brought litigation against 94 companies for violating the ban against trade and investment in Iran. The US State Department imposed sanctions 111 times against foreign entities engaged in trade activities with Iran.
And both departments have used their power to freeze financial assets or access to the US financial system.
The results amounted to little more than a pinprick. In 1994, Iran exported $37 billion in goods; by 2007, the figure had nearly doubled, to $70 billion. In roughly the same period, Iran’s imports also soared, from $22 billion in 1994 to $45 billion in 2006.
Also based on the latest reports on Wednesday, April 23, the volume of trade exchange between Iran and China exceeded the $20 billion mark in 2007.
Likewise, according to the Minister of Communication and Information Technology Mohammad Reza Soleimani, foreign firms are investing heavily in communication projects.
Evaluating three decades of illegal US sanctions to hinder Iran’s oil industry and trade and curb its nuclear program, the US Congress’ Government Accountability Office recently concluded that the results are ’unclear’, adding with candid obliqueness that ’some evidence, such as foreign firms (Switzerland) signing contracts to invest in Iran’s energy raise questions about the extent of the sanctions’ impact’.
More interesting though, many European countries, tired of Washington’s outdated policies, are expressing their willingness to invest and cooperate in different sectors of the country’s oil industry.
Another proof that anti-Iran sanction resolutions have had no effect on Iran’s energy deals could be the recent 25-year deal between Switzerland’s Elektrizitaetsgesellschaft Laufenburg and National Iranian Gas Export Company (amid US pressures) for the delivery of 5.5 billion cubic meters of gas per year. According to Swiss officials, the deal is ’very important in a long-term perspective for both sides as it will help facilitate Iranian gas exports to Europe and ease Europe’s dependence on Russian gas’.
In brief, all these extensive economic/trade developments translate into the fact that since the 1979 victory of Islamic Revolution, not only have the US-led sanctions failed to isolate the country and/or weaken its international trade, but have also opened up other avenues which are so enormous that they can barely be reported in such a short column.

Samsami Outlines Priorities
Hossein Samsami has been appointed caretaker of the Ministry of Economic Affairs and Finance, replacing Davoud Danesh-Jafari on Tuesday.
Samsami, a former secretary of the cabinet’s Economic Committee holds a doctorate in economics from Tehran’s Shahid Beheshti University, where he is a lecturer at the Faculty of Economics.
He explained the new priorities for banks, insurance companies and organizations affiliated to the ministry.
He recalled that Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei designated the year to March 2009 as the Year of Innovation and Prosperity, adding the ministry will adopt new strategies to improve the economic indices, IRNA wrote.
Samsami noted that the law has amply stipulated the jurisdiction of the Economy Ministry as regulating monetary and financial policies, executing financial schemes as well as regulating and implementing joint investment plans with foreign countries.

Dam Tender Due
A tender for the construction of several new dams in the finance mode will be floated in the coming months, disclosed deputy energy minister for water affairs.
On projects being implemented in the finance mode in the year to March 2009, Rasoul Zargar told MNA that about 10 projects have been identified and introduced by Energy Ministry. Once the bank contracts are specified, their names would be published, he added.
This is while, the number of dams being constructed in the finance mode depends on the ceiling of funds specified for the ministry.
On the construction of Bakhtiari Dam in Lorestan province by a Malaysian team, he said that since the proposed project is to be one of the tallest dams in the world and heavy investment will be required for its construction, negotiations for handing the job to Malaysians or any other foreign firms would take between six and 12 months.
On dams which had been specified for implementation in the finance mode in the year to March 19, the officials said that agreements are being concluded with the Central Bank of Iran on these projects.

ICCIM Chief in Saudi Arabia
Head of Iran’s Chamber of Commerce Industries and Mines Mohammad Nahavandian, heading a commercial and economic delegation, arrived in Jeddah, Saudi Arabia on Tuesday.
According to IRNA, Nahavandian is due to sign an agreement on establishing a business owners union in Tehran and meet the president of Islamic Chamber of Commerce and Industry, a subsidiary of Organization of Islamic Countries (OIC), Sheikh Saleh Kamel.
A number of issues including those pertaining to leading Islamic companies and adopting a unified logo for halal products in Islamic countries will be discussed in meetings to be held between Nahavandian and Sheikh Saleh Kamel and President of Islamic Development Bank Ahmad Mohammad Ali.
Increasing joint investment, expanding commercial cooperation among Islamic countries, boosting trade transaction between private sector and other sections of economy as well as improving the participation of Islamic banks in giant projects are among other topics which will come up for discussion during the visit.

Handwoven Carpet Festival Underway
About 200,000 square meters of handwoven carpets are produced in South Khorasan province, announced head of the provincial Commerce Department, Nader Mirshekar.
Speaking in the First Festival of South Khorasan Handwoven Carpets in Birjand, he noted that 45,000 carpet weavers are active in the province and 50 percent of them have insurance, according to IRNA.
He put the number of carpet looms in the province, at 15,000.
Referring to the age-old history of handwoven carpets in the province, Mirshekar noted that carpet weaving activities are being conducted in both private and state-run sectors.
Head of the province’s Union of Handwoven Carpet Producers and Weavers, Hassan Kamiabi said that 3,107 people were referred to banks for loans.

Banking Facilities for Airlines
Special banking facilities will be extended to domestic airlines for aircraft purchase in the year to March 2009, announced director of Civil Aviation Organization of Islamic Republic of Iran, Hossein Khanlari.

Scientific MoU With Finland
Heads of Iranian and Finnish geological organizations in Tehran on Tuesday inked a memorandum of understanding on scientific cooperation, including data analysis, exploration, petrology and training.

Russia Gas Officials to Visit
Top officials from the Russian oil giant Gazprom will visit Tehran within a month to hold talks on developing Iran’s oil and gas fields, an Iranian energy official said.
According to PIN, Deputy Oil Minister for international affairs, Hossein Noghrekar-Shirazi said so far many rounds of negotiations have been held with Gazprom on developing oil and gas fields and providing bilateral and multilateral services.
“The purpose of this round of talks is the development of phases 19, 20 and 21 of Iran’s giant South Pars (SP) gas field.“ The head of Gazprom, Alexei Miller, met Iranian oil minister last year and they reached agreement on jointly developing two phases of massive SP gas field and establishing a joint gas company. Meanwhile, National Iranian Gas Export Company says South Pars gas field phase 13 will be swapped with other phases in the bid to facilitate the implementation of Parsian LNG Project.
Meanwhile, National Iranian Gas Export Company consultant, Iraj Hamedizad, said Oil Ministry had a meeting with Royal-Dutch Shell and Spanish Repsol companies last month during which they were asked to switch phase 13 with other phases.
Hamedizad added: “For the same reason, Shell has been given one month to reach a decision. Consequently, a meeting was held after the Norouz (Iranian new year) holidays (March 19 to April 2) and Shell and Repsol came up with a new proposal which is still under review.“

Iran-China Trade Soars
Transactions between Iran and four eastern Chinese provinces of Shanghai, Zhejiang, Anhui and Jiangsu, rose by 50 percent to reach $3 billion compared with the figure for the previous year, the Consul General of the Islamic Republic of Iran to Shanghai, Mohammad Reza Nazeri told IRNA.
Referring to an $800-million increase in bilateral trade, Nazeri said that economic relations between Iran and China were growing.
Appraising Tehran-Shanghai economic ties as thriving, he voiced the Iranian consulate’s readiness to boost cooperation between Chinese and Iranian companies.
Important industries such as shipbuilding, automobile manufacturing and aircraft factory as well as steel and electronics industries are located in this region.

Venezuela Ties to Expand
Iran’s Petropars Company and a Venezuelan oil company are to step up cooperation in the near future, deputy manager of Petropars Engineering Department told ISNA.
Mohammad Hassan Mirzaei said that a joint company has been set up to expand ties while the areas of cooperation are currently being finalized.
“Cooperation on developing some blocks in Ayacucho oilfield is also on the agenda,“ he said, adding “At this time, our experts are working in Venezuela to prepare the grounds for future agreements.“
The Iranian government released on Monday the agreement with Venezuela to widen cooperation between the two countries in the oil sector, including the development of some Venezuelan deposits.

Sri Lanka Seeks LPG Concession
The Sri Lankan government has requested Iran to sell liquefied petroleum gas at a concession price.
Sri Lankan Ambassador to Iran M.M. Zuhair told Fars news agency that his government presented a strong case to the Iranian authorities to consider a discount for long-term purchase of LPG.
The Sri Lanka mission in Tehran, in consultation with the Ceylon Petroleum Corporation, had been exploring LPG purchase from Iran, which is in high demand in the Indian Ocean country.
The mission has recommended that it is best to discuss the issue of LPG purchase at the highest level during the upcoming visit of Iran’s President Mahmoud Ahmadinejad to Sri Lanka.
Economic cooperation between the two countries have been growing and Iran has pledged to help implement two projects in Sri Lanka as well as provide an interest0free loan of $2.042 billion to the country for purchasing oil from Iran.
Sri Lanka is seeking to eliminate worries about higher gas prices in the future, especially in the face of talks about the formation of an OPEC-style gas organization, which could lead to a steep price rise for the commodity in the near future.
Iran possesses the second largest gas reserves in the world after Russia and has ready access to South Asia both by land and sea.

Job Security for 1.7m
More than 1.7 million people had job security in the year to March 2008, announced Deputy Minister of Labor and Social Affairs Ebrahim Nazari.
He told IRNA that despite a 22-percent rise in the number of laborers, work complaints dropped by 17 percent during the period compared to the figure for the year to March 2007.
The official noted that currently 5,000 labor arbitration councils are in operation nationwide, adding their activities are very effective in reducing labor disputes.
“Number of labor disputes fell by 20 percent in the last Iranian year (to March 19) compared to the figure for the preceding year,“ he noted. About 17,300 billion rials have been invested in the employment sector since the present administration took office in 2005.

Pakistan Seeks Housing Cooperation
Pakistan Minister for Housing and Works Rehmatullah Kaker has urged Iranian companies to participate in his country’s housing projects.
In a meeting with Iranian Ambassador to Islamabad Mashallah Shakeri, the minister said that the new Pakistan government targets the construction of one million houses over the next eleven months, IRNA reported.
“This is a good opportunity for Iranian companies in the housing sector to participate in the project.“
Highlighting that China, Turkey, South Korea and Spain have also showed willingness to assist in Pakistan’s housing sector, he reiterated that if Iranian companies are interested in the project, they would get the priority.
Kaker also wanted Iranian companies to supply construction materials for the plan.