Iran energy official writes off China firms

The Iranian Petroleum Ministry’s ties with Chinese companies appear seriously on the rocks, with one senior energy official saying he prefers Japanese, European and even American investors to the Chinese. 

Deputy Petroleum Minister Abbas She’ri-Moqaddam says China’s restrictions on financing energy projects in Iran have prompted the country’s officials to look for new investors elsewhere.

For funding petrochemical projects, Beijing has put many preconditions, including the requirement that 50% of the finance must be sourced from the Chinese market.

Moreover, China limits the use of local industries and “hence, we prefer Japanese, European and American investors”.

She’ri-Moqaddam said many companies from Germany, France, Spain, Italy, the Netherlands, South Korea, Japan and even the US had indicated their readiness to participate in Iran’s petrochemical projects.

“Negotiations have been held with many of the companies and they are impatiently awaiting the remaining stages of the nuclear accord to be implemented in order to enter Iran for investment.”

Iran’s petrochemical sector requires $70-80 billion of investment over the next decade, She’ri-Moqaddam said.

“There is need for $7-8 billion per year in Iran’s petrochemical industries. This volume of investment is not a figure which we could provide by using the National Development Fund or the Chinese finance which they are reluctant to give,” he added.

China reportedly finances projects by using Iran’s oil money held in escrow accounts in that country because the Islamic Republic cannot easily repatriate it due to the sanctions.

Last week, former central bank governor and economy minister Tahmasb Mazaheri said Iran often faces a myriad of problems to access its own funds in China even as they are not frozen under the sanctions.

Chinese companies are said to have accelerated their projects in Iran, fearing they might be undercut by international energy giants for new projects in the resource-rich country.

Almost all projects awarded to Chinese firms are beset by either repeated delays or other contractual problems, resulting in huge losses for Iran.

By Press TV