29 Mar 2024
Thursday 9 April 2015 - 11:02
Story Code : 159168

Iranian companies try to buy Swiss refinery ahead of sanctions lifting

Iranian companies are trying to buy a Swiss petroleum refinery, according to people familiar with the deal, as Tehran seeks outlets for oil that may return if western sanctions are lifted later this year.

Petro Farhang, the oil-investment subsidiary of Irans teacher pension fund, and Ghadir Investment, a conglomerate with petrochemical businesses which is controlled by Iranian pension funds, have registered a formal expression of interest to buy a refinery in Collombey, Switzerland, controlled by Libyan firm Tamoil Suisse, according to people familiar with the move.

Stephane Trachsler, general secretary of Tamoil Suisse, said the company had rejected all potential bidders so far. He declined to confirm the approach by the Iranian companies but he said one potential bidder had been refused because it came from a sanctioned country, without specifying which one.

Ghadir and Petro Farhang didnt return a request for comment.

Under international transit agreements, Iranian crude could reach the refinery through a pipeline that starts in the port of Genoa in Italy, as well as leverage on an existing exemption that has already enabled Eni SpA to bring oil to Italy, the person familiar with the deal said. The Italian oil giant has been allowed to import Iranian crude to Italy as repayment for past works under an exemption to the European Unions oil embargo on the Islamic Republic.

The approach came before Iran and six world powers last week reached a tentative agreement that could end a decade-long fight over Tehrans nuclear program and enable a boost in Iran oil exports.

But, in a sign that Iran is continuing to search for outlets for its oil, Petro Farhang and Ghadir Investment havent given up on making a bid for the refinery, the people familiar with the matter said. Other options include buying an equity stake in the refinery or leasing the refinery without owning it.

Crippled by years of limitations on oil exports and foreign investment, the Islamic Republic is facing a struggle to regain its lost customers even if sanctions are lifted.

In the case of the Tamoil Suisse refinery, the plant can refine 63,000 barrels a day and covers 20% of Switzerlands inland oil-product sales. It was first put up for sale last year after posting losses amid a slump in the European refining sector.

The two Iranian funds were planning to use some of the 300,000 barrels of oil a day allocated by the state-run National Iranian Oil Co. to supply the refinery, another person familiar with the approach said. Other Iranian companies are also considering other acquisitions of refineries in Europe, a move that will become easier once sanctions are lifted, the person said.

Switzerland isnt part of the European Union, which has sanctions against Iran, and is allowed to import Iranian oil.

The National Iranian Oil Co. itself wasnt part of the approach but has been kept informed of the talks and had supported them, said people familiar with the matter.

A Swiss regional government spokesman said a Middle Eastern oil producer had made a preliminary approach to buy the refinery but declined to comment further.

International sanctions currently cap Irans oil exports at 1 million barrels a day. But it has said it could double the shipments if the restrictions were lifted.

By The Wall Street Journal
https://theiranproject.com/vdcjmhevouqeivz.92fu.html
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