Iran plans to privatise its oil refining, petrochemicals and oilfield services sectors but it may have problems finding buyers. Under the threat of stiffer sanctions over its nuclear programme, the second-largest OPEC oil producer is seeking to accelerate the sale of state assets to help balance the government’s books and revitalise its troubled economy.
Now, even some parts of Iran’s previously sacrosanct petroleum industry could be up for sale in a reversal of the country’s previous policy of strict nationalisation of oil and gas assets
“The work on ceding [ownership of] oil companies has begun and based on plans, all petrochemical units and refineries will be ceded, including service, drilling and support companies,” the Iranian oil minister Massoud Mirkazemi said on Saturday, according to the semi-official Mehr News Agency.
A senior Iranian privatisation official said this month Tehran was aiming to raise about US$12.5 billion (Dh45.91bn) by selling more than 500 state firms to private-sector investors in the coming year, Reuters reported.
But the long-running standoff over Tehran’s nuclear ambitions has led the US to exert increasing pressure on its allies to shun commercial dealings with Iran.
Tehran may therefore have difficulty finding buyers willing to risk a spat with the US.
Another problem is that the refining and petrochemicals industries face tough times due to the slow pace of global economic recovery.
Already thin petroleum refining margins, which contracted sharply last year as the downturn sapped demand for fuels, will shrink even further this year, the consulting firm Wood Mackenzie predicts.
“Refinery over-expansion from the previous up cycle will be felt while the industry adjusts to shifts in market demand,” the international consulting and publishing firm Hart Energy said in a recent issue of its Global Refining and Fuels Report.