Iran Already Making Shipping and Oil Deals


By The Maritime Executive 2015-07-24 18:45:25

Iran has outlined plans to rebuild its main industries and trade relationships following its nuclear agreement with world powers. 

According to the agreement, all economic and financial sanctions against Iran will be removed and all bans on Iran’s Central Bank, shipping, oil industry and many other companies will be lifted.

Container Shipping

An Iranian official has already indicated that the French shipping company CMA CGM is arranging to start calling at the southern Iranian port Shahid Rajaei, reports Iran Daily.

Ebrahim Idani, director general of Hormozgan Ports and Maritime Department, indicated that CMA CGM’s Andromeda will be the first container ship to berth at the port as a result of the lift in sanctions. It is anticipated to arrive in early August with 11,500 teu of containers.

Idani stated that the Andromeda has already started its journey from the Far East and is bound for the Persian Gulf. He also said that recent developments at Shahid Rajaei port mean it is suitable for large container vessels. The port is equipped with 18 gantry cranes and 41 docks, making it the biggest and most modern container port in Iran.

Oil and Gas

Iran is also targeting oil and gas projects worth $185 billion by 2020.

Iran's Minister of Industry, Mines and Trade Mohammad Reza Nematzadeh said the Islamic Republic would focus on its oil and gas, metals and car industries with an eye to exporting to Europe after sanctions have been lifted, rather than simply importing Western technology.

"We are looking for a two-way trade as well as cooperation in development, design and engineering," Nematzadeh told a conference in Vienna.

"We are no longer interested in a unidirectional importation of goods and machinery from Europe," he said.

Global Interest

Many European companies have already shown interest in reestablishing business in Iran, with Germany sending its economy minister Sigmar Gabriel on the first top level government visit to Tehran in 13 years together with a delegation of leading business figures.

Iran's deputy oil minister for commerce and international affairs, Hossein Zamaninia, said Tehran had identified nearly 50 oil and gas projects worth $185 billion that it hoped to sign by 2020. OPEC-member Iran has the world's largest gas reserves and is fourth on the global list of top oil reserves holders.

In preparation for negotiations with possible foreign partners, Zamaninia said Iran had defined a new model contract which it calls its integrated petroleum contract (IPC).

"This model contract addresses some of the deficiencies of the old buyback contract and it further aligns the short- and long-term interests of parties involved," he said.

He said the deals would last 20-25 years - much longer than the previously less popular buybacks, which effectively were fee paying deals with global oil majors such as France's Total for services they performed on Iranian oil fields.

He said Iran would introduce the projects it has identified and the new contract model within 2-3 months.

Projects Approved

Deputy Economy Minister Mohammad Khazaei said Iran had already completed negotiations with some European companies wanting to invest in the country.

"We are recently witnessing the return of European investors to the country. Some of these negotiations have concluded, and we have approved and granted them the foreign investment licences and protections," Khazaei told the conference.

"Even in the past couple of weeks we have approved more than $2 billion of projects in Iran by European companies," he said, without naming the firms or providing further details.

Most European oil majors and oil service companies have so far expressed caution about the prospects of a windfall of deals in Iran, saying their compliance departments will want to first see sanctions being fully removed before any meaningful work can start on projects.

Looking for Joint Ventures

Beyond oil, Nematzadeh said Iran was looking to move away from state ownership in many sectors, creating joint ventures for auto parts manufacturers with the aim to produce 3 million vehicles by 2025, of which a third would be exported.

Central bank deputy governor Akbar Komijani said Iran's financial sector was offering opportunities for cooperation between domestic banks and foreign investors.

Nematzadeh said Iran aimed to join the World Trade Organization once political obstacles were removed and would be interested in trade deals with Europe and central Asian countries.