IRAN - Overseas Refining Interests.

Iran under the Pahlavi regime was the first OPEC member to invest in overseas oil refining. Shortly after the Islamic regime came to power in early 1979, Tehran decided against investing abroad. But in recent years that decision was reversed. With pressure built up on Iran from the US, NIOC has negotiated downstream partnerships in China, India, Indonesia, Malaysia, Pakistan, Vietnam, etc. But no deal has emerged.

NIOC has kept its holdings in India, involving a 130,000 b/d refinery in Madras. The JV was set up in 1971 between NIOC, Madras Refineries Ltd. (MRL) and Chevron Chemical Co. of the US. Initially NIOC held a 13.5% stake, worth $2.3m, in the venture. In 1985, it increased the stake to 20% by investing $15m. But later NIOC's stake was reduced to 16% In the early 1970s, NIOC took a 17.5% stake in South Africa's Sasol refinery in Sasolburg (Orange Free State). The deal involved a 20-year agreement under which NIOC was to supply 70% of the refinery's crude needs. NIOC revived the South African partnership after Nelson Mandela came to power. Currently, South African companies buy Iranian crudes. A deal for NIOC to store oil at the Saldhana Bay tank farm was signed on Aug. 31, 1995.

In the early 1980s NIOC sold its 50% stake in a refining venture at Onsan, South Korea, where the Korea-Iran Petroleum Co. (KIPC) was set up in 1974. Construction of a 60,000 b/d refinery was completed three years later.

Pakistan and Iran signed an accord on Aug. 19, 1996, to build a $1.1 bn, 120,000 b/d refinery at Bin Qasim Port, 50 km south-east of Karachi. But since then there has been no progress.

Iran Daily on April 5 reported NIOC Managing Director Mehdi Mir-Moezzi as saying the state company was planning to operate internationally through subsidiaries, namely Niko, Petropars and PetroIran (PEDCO). The paper quoted him as saying: "Overseas activities of such companies would help strengthen the financial backbone of NIOC and consequently the government". He said NIOC was planning to seek advice from international consulting firms to improve productivity in recovery projects.