Post-JCPOA Petchem Achievements in Iran
Iran's petrochemical sector has definitely been a beneficiary of the country's 2015 landmark nuclear deal with six world powers, known as the Joint Comprehensive Plan of Action (JCPOA). Among achievements in this sector are increased production, many rounds of talks with top international companies and their show of interest for investment in Iran.
JCPOA has had mid and long-term effects on the petrochemical industry in Iran. The possibility for foreign companies to invest in Iran, transfer technical knowhow, supply of equipment, catalysts and chemicals directly to Iranian companies at lower costs and within shorter periods of time, possibility of renewed presence in Europe's markets, effective presence in the global trading of petrochemicals and subsequently increased revenue from exports, facilitation of transport conditions and insurance cover for Iran's petrochemical products in world markets, and acceleration of development projects due to sufficient financing, equipment supply and availability of technological savvy are among these effects.
Furthermore, implementation of infrastructure projects with Iran's unfrozen money through reliance on domestic capabilities, reduction in the cost price of petrochemicals, higher profitability, access to technical savvy, particularly MTP (methanol-to-propylene conversion) and the possibility of commercialization of newly developed technical knowhow in cooperation with top international companies were achieved following the implementation of the JCPOA early last year.
The JCPOA effects are not limited to the aforementioned points. Some other effects are as follows: getting access to updated data about market and basic, middle and final products, improvement in the arrangement of letters of credit, easier financial transactions and transfer of money in exchange for exporting petrochemicals (reduced costs thanks to SWIFT), completion and implementation of petrochemical industry projects through benefiting from unfrozen assets, financing, joint venture and foreign direct investment, enhancing the output in production units to the rated capacity, strengthening the structure of investment management to facilitate the process of investment in petrochemical projects, more transparency in policies related to petrochemical industry including feedstock pricing, further coordination in petrochemical exports in collaboration with top petrochemical holdings in the country with a view to growing presence in regional and global markets, and drawing up new policies in order to establish strong commercial ties with European countries.
Among the most important activities of Iran's National Petrochemical Company (NPC) following the entry into force of the JCPOA are management of the petrochemical industry's international interactions, undertaking efforts to facilitate financing, supply of technical knowhow and equipment needed for the development of petrochemical industry. In this regard, specialized meetings have been regularly held, international seminars and exhibitions have been organized to invite leading international companies.
Another field of activity by NPC after the removal of sanctions has been the management of domestic interaction between petrochemical companies in Iran with a view to laying the groundwork for active presence under new circumstances and arranging further coordination between petrochemical companies and upstream feedstock suppliers in a bid to make maximum benefit from installed capacities and subsequently enhance the productivity and competitiveness of Iranian petrochemical companies in regional and global markets.
Another measure taken by the NPC to take maximum benefit from the post-JCPOA conditions has been its efforts to facilitate domestic and foreign investment with focus on foreign direct investment and making planning in order to provide necessary infrastructure in new petrochemical hubs.
Negotiations with Foreign Firms
Since petrochemical industry is capital-intensive and knowledge-based and owes its survival to revenue from exports and international interactions, the NPC has severely concentrated on financing, acquisition of technical knowhow and supply of equipment needed for the development of petrochemical industry through cooperation with leading international companies. This approach has been focused on the quality development of petrochemical industry and strong presence in global markets. In all stages