{"id":15877,"date":"2025-10-28T03:29:59","date_gmt":"2025-10-28T03:29:59","guid":{"rendered":"https:\/\/roydadnaft.ir\/English\/?p=15877"},"modified":"2025-10-28T03:29:59","modified_gmt":"2025-10-28T03:29:59","slug":"only-15-of-irans-petchem-investments-come-from-genuine-private-sector-players","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/15877\/","title":{"rendered":"Only 15% of Iran\u2019s petchem investments come from genuine private sector players"},"content":{"rendered":"

RoydadNaft – <\/a><\/span>\u00a0The National Petrochemical Company\u2019s managing director said the industry is focusing on attracting investment from genuine private sector players, noting that only about 15% of the $92 billion invested in Iran\u2019s petrochemical sector so far has come from real private investors.<\/p>\n

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Hassan Abbaszadeh made the remarks Monday at the International Conference on Investment and Financing in the Oil, Gas and Petrochemical Industries. He said Iran\u2019s installed petrochemical capacity now stands at roughly 100 million tons, calling the industry a vital link in creating added value for the oil sector.<\/p>\n

\u201cTo move beyond crude sales, we must prioritize completing the value chain in the petrochemical sector and producing end products in downstream industries,\u201d Abbaszadeh said.<\/p>\n

He added that under the Seventh Development Plan, the government and the oil minister have emphasized achieving the program\u2019s full objectives, which call for raising petrochemical capacity to 131 million tons. \u201cThe main focus is on completing specific value chains that have been neglected or remain unfinished,\u201d he said.<\/p>\n

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\u00a0<\/strong>Preventing $2b in Imports<\/strong><\/p>\n

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The deputy oil minister noted that about $2 billion worth of petrochemical products are imported annually, often causing supply issues for downstream industries. \u201cThe goal is to produce these products domestically during the Seventh and partly the Eighth Development Plans,\u201d he said.<\/p>\n

Of the 66 projects targeted under the current plan, an estimated $26 billion in investment is needed, Abbaszadeh said. \u201cThese projects did not start under this plan; on average, they have about 60% physical progress. So far, $13 billion has been invested, and good progress has been made during the first two years.\u201d<\/p>\n

He said sustainable feedstock supply, adequate investment, and stable markets are essential for continued development, adding that a stable and predictable business environment is also vital for attracting investors.<\/p>\n

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\u00a046 <\/strong>Projects Ready for Investment<\/strong><\/p>\n

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According to Abbaszadeh, 46 new petrochemical projects are ready for investment and are expected to go into operation by 2033 under the Eighth Development Plan. \u201cThese projects, requiring $44 billion in total investment, already have environmental permits, land-use approvals, safety plans, and project managers in place,\u201d he said. \u201cEach project has a clear presentation prepared for potential investors.\u201d<\/p>\n

He stressed that the industry\u2019s focus is on real private sector investment, noting that of the roughly $90 billion invested so far, only 15% came from genuine private entities. \u201cWe aim to increase that share because private companies are more agile, deliver projects faster, and make smarter investment choices,\u201d Abbaszadeh said.<\/p>\n

He added that Iran has drifted from genuine privatization in recent years. \u201cA comparison between real private ownership and quasi-state or pension fund holdings shows that while private investment is typically half as large, it results in much lower costs and faster implementation,\u201d he said. \u201cIn contrast, quasi-state projects often face delays because returns must go to pension shareholders.\u201d<\/p>\n

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\u00a0<\/strong>Retaining 40% of Annual Profits for Development<\/strong><\/p>\n

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Abbaszadeh pointed to a provision in the Seventh Development Plan requiring companies to retain 40% of annual profits for reinvestment in development projects. \u201cProper implementation of this single clause could unlock significant new investment,\u201d he said.<\/p>\n

He noted that the petrochemical sector earns about $24 billion annually, but most profits are distributed to pension funds rather than reinvested. \u201cEven in the best years, annual investment has not exceeded $4.5 billion,\u201d he said.<\/p>\n

While foreign investment once covered much of the industry\u2019s funding needs, Abbaszadeh said current investment stands at $2.5 to $3 billion annually, mostly from domestic sources. \u201cThe domestic capacity for investment is still very strong,\u201d he added.<\/p>\n

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\u00a0<\/strong>Attracting Private Capital<\/strong><\/p>\n

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Abbaszadeh identified several key factors for boosting private investment in the industry. \u201cFirst, we must simplify administrative processes and shorten the licensing path. Many private investors are discouraged by lengthy procedures and instead turn to sectors like construction, where returns come faster,\u201d he said.<\/p>\n

He also emphasized the need for stable regulations. \u201cFrequent policy changes undermine investor confidence. We must ensure a predictable legal environment so investors know the rules won\u2019t change midstream,\u201d he said, citing the removal of tax exemptions on petrochemical exports and their replacement with export duties as an example of such shifts.<\/p>\n

Abbaszadeh added that the industry\u2019s financial instruments need modernization. \u201cWe can no longer rely solely on traditional financing methods,\u201d he said. \u201cConferences and universities can help design new tools such as project-based investment funds and innovative domestic financing mechanisms to attract more capital locally.\u201d<\/p>\n<\/div>\n<\/div>\n

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