Iran to partially privatise oil sector
By Mehrdad Balali
TEHRAN, April 23 (Reuters) - Iran plans to privatise major segments
of its oil and petrochemical sectors as part of a drive to modernise the
ageing industries, Oil Minister Bijan Zangeneh said on Sunday.
``Our goal is to bring the energy industry up to date and increase productivity,''
Zangeneh said in a speech inaugurating an international exhibition of oil,
gas and petrochemical technologies.
``The industry has historically been facing backwardness, and we should
quickly make up for it and have a modern industry,'' he said of Iran's
90 year old oil industry, the main component of the Iranian economy.
Zangeneh said the government planned to invest $10 billion over the
next five years to streamline its energy industry, including $4 billion
for the petrochemical sector.
``We plan to change the structure of the energy industry and improve
efficiency,'' he said.
The minister said low-technology industries in the oil sector would
be transferred to the private sector, including those producing petroleum
Privatisation would be more extensive in the petrochemical sector, covering
all the refineries, he said.
``We will actively support privatisation as far as the constitution
allows us,'' Zangeneh said.
Iran's constitution, drafted after the 1979 Islamic revolution, places
key economic sectors in state hands.
But the government of President Mohammad Khatami has managed to circumvent
legal hurdles and secure legislative approval for privatisation of big
industries, including oil and petrochemicals.
Khatami launched his five-year plan for economic recovery last month
with promises to end the state's monopoly on the economy and trim government
Iran has heavily invested in petrochemicals in search of greater profits
from exports of derivatives. But crude exports are still the main source
of hard currency.
Petrochemical exports account for nearly a sixth of Iran's non-crude
Officials say petrochemical output has seen a five-fold increase since
the revolution, reaching 13 million tonnes a year now. The industry plans
to raise production to 35 million tonnes in five years.
Zangeneh said $2 billion worth of petrochemical contracts had been signed
with foreign companies in the year to March, and another $2 billion will
be signed this year.