The Oil and Gas Sector CEO of General Electric Company (NYSE: GE) has paid a visit in Tehran, Iran in order to find fresh business opportunities in the region.
After the US sanctions on Iran were lifted, General Electric sees attractive opportunities to make investments in Iran. Just recently, the CEO of the Oil and Gas division of General Electric Mr. Lorenzo Simonelli has visited Tehran in order to get in talks about these good business opportunities. There are still specific sanctions in place. One of these sanctions on Iran involves the ban on US dollar transactions with the country. Yet, these sanctions are anticipated to be lifted in the next months.
The efforts of Iran to boost its crude oil production have also enticed several other companies in the United States. The International Energy Agency has recently revealed how Iran fell short of its 3.6 million oil barrels per day capacity in the month of January, generating an output of nearly 3 million barrels a day. According to some analysts, they believe that American companies will take advantage of this opportunity.
Based on a press release, the Spokesman of General Electric has stated, “In line with the easing of sanctions, we have begun looking at potential business opportunities in Iran, while fully complying with the rules laid out by the U.S. government. Mr. Simonelli’s visit…was part of our efforts to that end.”
The Asian country also looks ahead to the boosted crude oil exports, making tremendous efforts in order to boost the economy. Yet, with the current low oil price environment, General Electric anticipates a further decline of between 10 percent to 15 percent in terms of revenues from the Oil and Gas segment in fiscal year 2016. This is partly what investors are concerned about.
General Electric is making efforts to reduce its presence in the financial segment. This move is helped by the company’s sale of the assets of its GE Capital. In addition, the US firm is also striving to grow its industrial business. Yet, with the ongoing downturn in the prices of crude oil, it appears like the revenues of the business are negatively affected.
Aside from this, the credit rating of General Electric was at stake when the company has tried to attain its long-term objective of heightened debt financing in order for its industrial operations to be supported. Yet, the corporation has not yet disclosed a major deal to grow General Electric’s industrial business segment. It is anticipated that GE will strike a deal with Iran, in line with this strategy.
General Electric Company has been working really hard in order to set foot in the market of Iran, as the conglomerate’s team in Dubai and Florence has already been evaluating every little detail of compliance with the US sanctions imposed on the country. Yet, regardless of these significant efforts, General Electric has registered a substantial decline in revenues of over $2 billion from the corporation’s Oil and Gas segment during the fiscal year 2014.