Iranian Rial

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Danske Bank in financing talks with Iran 

Mon Jan 9, 2017 6:23PM

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Denmark's Danske Bank A/S says it has stated talks with the Central Bank of Iran (CBI) on arranging credit to clients with business activities in the country. 

Denmark's Danske Bank A/S says it has stated talks with the Central Bank of Iran (CBI) on arranging credit to clients with business activities in the country.  

"To a limited extent and within the international framework, we are open to supporting our clients with activities in Iran financially," a Danske Bank spokesman said in an email, as quoted by Reuters.

"We are in dialogue with Iran's central bank about this, but no deal has been reached at this point," he said.

On the same front, Reuters quoted a report by Iran's Financial Tribune daily in which a CBI official said that the bank had received $7.2 billion in financing from three foreign banks, including Danske Bank.

Major Western banks have been reluctant to handle Iranian linked transactions, despite hopes that last year's nuclear deal with world powers would enable Iran to re-enter the global financial system.

That lack of banking support has hindered other companies from picking up Iranian business despite it being seen as potentially a major new market for many Western firms, Reuters added. 

Danske Bank announced last April that it had been negotiating with Iranian officials as well as the country’s banks for multiple months after the removal of sanctions in January 2016.  

The bank said this was meant to establish both the internal and the external procedures that are required to be able to handle business with Iranian customers.  

It also said that it was in the process of re-opening SWIFT connections with Iranian banks. Danske Bank also emphasized that it expects the demand for banking services such as clean payments, collections, letter of credits and guarantees involving Iran to rise in the near future.   

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Oman Good Choice for Re-Export of Iranian Goods: Official 

News ID: 1292122 Service: Economy 

 January, 09, 2017 - 14:59 

TEHRAN (Tasnim) – An Iranian official highlighted the ideal opportunity available in Oman for export of products to third countries with which Iran has no trade ties for political reasons. 

Chairman of Iran-Oman Joint Chamber of Commerce Mohsen Zarrabi described Oman as a perfect destination for re-export of Iranian products given the rich history of trade interaction with the sultanate.

Oman’s proximity to Iran, huge investment made in Omani ports in recent years and the sultanate’s bilateral trade agreements with a whole host of countries have made the ports of Oman a good substitute for those in other Persian Gulf countries, he noted.

Zarrabi also unveiled plans to turn Iran’s southeastern port city of Chabahar and Oman’s coastal city of Sohar into the region’s foodstuff hubs, in which Iranian food products will be processed and exported to other countries.

In November 2016, Iran and Oman launched the first direct passenger shipping line between Chabahar and Oman’s capital of Muscat.

The two countries had launched a shipping line for trade vessels in February that year, between port of Shahid Rajaee and Sohar.

The route was opened to facilitate the transport of agricultural products and perishable goods between the two countries.

Iran and Oman share age-old and close diplomatic, economic, military and tourism ties.

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Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei underscored the necessity of creating a buoyant economy driven by domestic production to help boost the Islamic Republic's clout.

"Making economic progress and solving people's problems are among factors that contribute to building national might," Ayatollah Khamenei was quoted as saying by his official website.

He made the statement during a meeting with people from the central holy city of Qom in Tehran on Sunday.

The Leader called for measures to effectively address economic problems of the country, noting that "sanctions were primarily aimed at creating economic woes and putting pressure on the people to alienate them from the establishment."

International sanctions against the Islamic Republic were lifted under the 2015 nuclear deal with major powers in return for temporary curbs on its nuclear program.

But much to Iran's frustration, foreign investors and bankers have held back from its economy, citing the remaining non-nuclear US restrictions. As a result, few deals have gone through since the historic pact took effect a year ago.

Residual US restrictions prohibit international firms and banks from using the US financial system to process dollar-denominated transactions involving Iranians.

They have learned a lesson from what some of their counterparts went through in the past over a breach of the bans, even though unwittingly, by suffering hefty US fines and this has made them unwilling to approach Iranians for trade.

"Even in removing the sanctions, they act in a way that ensures that the problems persist," the Leader said.

"As I have repeatedly said, the antidote that would help thwart such hostile plots is Resistance Economy."

Resistance Economy is an economic concept outlined by Ayatollah Khamenei to bolster national production and limit the country's dependence on oil revenues.

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Iran's tourism authority is preparing a brief guide on key regulations to familiarize foreign visitors with the country's laws before they travel to Iran.

During a meeting of the Tourists' Security Commission on Saturday, Morteza Rahmani Movahed, deputy for tourism at Iran's Cultural Heritage, Handicrafts and Tourism Organization, said, "The guide will be made available on the websites of the Foreign Ministry and Iran's diplomatic missions, as well as all ports of entry into the country."

The official said the publication of the guide will help ensure the safety of foreign nationals and keep Iran's tourism secure, the organization's official website, Ichto.ir, reported.

Years of animosity between Tehran and the international community—due to western-backed economic sanctions, which were lifted in January 2016—allowed foreign media with vested interests to smear Iran and paint a bleak picture of life in the Mideast country.

As a result, foreign tourists who ignore misplaced warnings and travel to Iran are pleasantly surprised by what they see. However, to encourage more tourists to come, it is integral to clear Iran's name, which can be achieved by smart marketing and distributing information on the country's laws, which can help avoid misunderstandings.

-- Security Sells

Iranian officials and advocates of developing the tourism industry tout the country's security, especially when compared to its neighbors, as a selling point.

Local officials in various cities have taken measures to ensure the safety of foreign tourists.

For instance, in Tehran and Isfahan, a tourist police unit has been formed to help foreign visitors resolve any grievances.

According to Rajabali Khosroabadi, the head of the ICHHTO office in Tehran Province, the purpose of the unit is to "help tourists deal with problems they might face—not to control people".

To help foreign visitors pursue complaints even after they have left the country, the official said the organization can represent tourists in legal cases.

"A tourist who has been a victim of pickpocketing and has lost important documents will naturally file a report, but they can't stay in Iran until the case is finalized," Khosroabadi said.

"Based on an agreement with the judiciary, the legal arm of the ICHHTO is allowed to represent foreign tourists in legal cases. When filing a report at a police station, tourists are given a separate form that allows them to select the organization as their attorney."

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Government tax revenues in the first half of the current Iranian year of 1395 (started March 20, 2016) amounted to 433.1 trillion rials, which is below the legislated amount of 529.1 trillion rials but 29.6% higher than the corresponding figure of last year.

Each dollar was exchanged for 39,550 rials in Tehran’s bureaux de change on Sunday.

Compared with the same period of last year, the share of direct tax revenues decreased from 57.6-56.4% and the share of indirect taxes increased in the Middle East Bank’s latest quarterly report on Iran’s economy. Excerpts follow:

An examination of direct tax revenues reveals that the tax share of legal entities has been continuously decreasing in recent years.

The steep fall in the tax share of non-governmental legal entities from 28.3% in the first half of last year to 23.6% in the first half of this year was the main reason for this decline.

In contrast, the tax share of governmental legal entities increased in terms of both provisional and delayed taxes.

It is noteworthy that despite the government’s declared policy regarding the taxation of institutions and foundations affiliated with the Islamic Republic, tax revenues from them amounted to 100 billion rials in the first half the year, which is half of that in the same period of last year.

The share of private sector employees in income tax revenues decreased and that of public sector employees increased. Wealth tax revenues did not experience much change.

In indirect tax revenues, the share of imports tax that had fallen from 10.8% in the first half of 1393 to 9.5% in the same period of 1394, fell further to 9.3% in the first half of the current year.

Revenues from tariffs on imported vehicles more than doubled from 2.1 trillion rials in the first half of last year to reach 4.6 trillion rials in the first half of the current year.

The tax on vehicle licensing increased in the same period, while the tax share of vehicle transactions decreased. In other words, the market for new and imported vehicles experienced a boost.

During the first half of the year, the share of tax revenues accruing from goods and services in tax revenues continued to increase, while in a change from the past, value added taxes did not increase much. In a reversal of recent years’ upward trend in value added taxes, in the first half of this year, the share of VAT in tax revenues fell by 5.2 percentage points from the first half of last year to reach 22.2%.

The 12.3% fall in oil revenues in the first half of this year compared with the same period in 1394 resulted in worsening the budget deficit, despite the significant increase in tax revenues.

The budget deficit during these two periods more than doubled. The government’s oil revenues in 1395 are partly buffeted by the Central Bank of Iran’s transfer in late 1394 part of its expected 1395 oil revenues. And the settlement of that advance payment this year has led to the severe decline in the government’s disposable oil revenues.

The 53.5% rise in development expenditures in the first half of the year compared to the same period of 1394, although it was still less than half the legislated amount, exerted additional pressure on the budget deficit.

In the same period, the disposal of financial assets increased to even surpass oil revenues. As such, the strengthening of the debt market has had a significant role in financing development expenditures in the face of declining oil revenues.

Table 1 shows the fiscal performance of the government in the first two quarters of this year.

  Next Budget Bill

In the budget bill for 1396, the 10.9% rise in the government’s general budget and the 10.6% rise in the general budget are in line with the expected inflation rate for 1396.

Government employees’ incomes are to increase by 10% and general resources by only 8.7%.

The increase in budget items by rates around the expected inflation rate indicates the intention to control further expansion of the government.

Table 2 presents the main subdivisions of the 1396 budget bill.

Among the components of general resources in the 1396 budget bill, compared to the 1395 budget law, current revenues show very small growth compared to the considerable 49.1% rise in oil revenues.

The rise in forecasted oil revenues emanates from oil prices averaging $55 per barrel, oil exports rising to 2.4 million bpd and the conversion of US dollar at 33,000 rials.

Tax revenues are expected to increase by 8.6% while other current revenues are to decrease by 12.5% and thus current revenues are to rise slightly.

The 23.8% increase in income tax revenues in 1396 budget bill indicates that the government intends to rely more on this type of tax revenues.

With regard to disposal of financial assets, despite the government’s declared intention to rely more on Islamic securities and foreign debts, the net disposal of financial assets is to decline by 32.9% as a result of a considerable drop in the disposal of state-owned companies.

The slowing trend of privatization in this bill marks a noticeable departure from the recent past. Keeping the share of the National Development Fund in oil revenues at its previous level of 20% may be a weakness of this bill, as it may not enable the fund to play its role in mobilizing the required private capital necessary for achieving a desirable economic growth.

Expecting 35 trillion rials from the disposal of development projects to the private sector in this bill is questionable, given the government’s failure to take such actions in recent past.

Table 3 exhibits the resources and expenditures in the 1396 budget bill.

   Capital Market

The overall index of Tehran Stock Exchange showed an upward trend in the early days of the second half of the year and after some fluctuations reached 81,342 before closing at 80,122 on the last day of the Q3 of 1395, showing a 3,672-point increase from the same day in 1394.

The value of transaction in “Shares and Preemptive Rights” fell to 33.7 trillion rials in the last month of Q3 of 1395 to register the lowest monthly value so far in 1395.

The third, fourth and fifth series of Islamic Treasury Bills matured in Q3 of 1395 and the funds were fully paid by the treasury on time.

The ninth and 10th series of these bills totaling 30 trillion rials have also been issued with maturities in 6/1396 and 7/1396 in the OTC market.

Additionally, 45 trillion rials of short-term Islamic Treasury Bills with 4- and 5-month maturities were issued and as of Q3 of 1395 are being traded in the OTC market.

  Other Economic Developments

The 10-year extension of Iran Sanctions Act by the US Senate on December 1, 2016, is a noteworthy development in the aftermath of the Joint Comprehensive Plan of Action, the formal name of the nuclear deal Iran reached with world powers for curbing its nuclear program in lieu of the abolition of sanctions.

According to the initial version of ISA, investment exceeding $20 million by an American or non-American firm for the development of Iranian oil resources would trigger sanctions by the US against that firm.

The senate voted 99-0 in favor of the resolution and the president did not veto it, although he did not sign it either, letting it become law.

In accordance with JCPOA, since the signing of that agreement, the US government has abstained from implementing ISA sanctions. But the outcome of the November presidential election in the US has given rise to concerns about the future of JCPOA.

Regardless of the upcoming US administration’s behavior, since JCPOA was signed by six countries and Iran, the incoming US administration cannot unilaterally scuttle it.

In early fall, the Central Bank of Iran proposed changing the national currency from rial to the more commonly used unit toman that equals 10 rials.

Considering the circulation of 8 billion notes and 5.3 million coins, such a change is estimated to cost 52 trillion rials. However, this figure is not included in 1396 budget bill.

According to CBI authorities, the substitution of old notes and coins with new ones would be carried out gradually.

The census of population and housing, which is to be conducted once every 5 years, was carried out in Q3 of 1395 and for the first time online as well.

Also, a $16.6 billion deal between Iran Air and Boeing was signed in the last days of fall, based on which 80 aircrafts would be delivered to Iran by 2028. This deal was made possible by JCPOA and is a first in Iran’s international trade in over 30 years.

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1 minute ago, screwball said:

In early fall, the Central Bank of Iran proposed changing the national currency from rial to the more commonly used unit toman that equals 10 rials.

Considering the circulation of 8 billion notes and 5.3 million coins, such a change is estimated to cost 52 trillion rials. However, this figure is not included in 1396 budget bill.

According to CBI authorities, the substitution of old notes and coins with new ones would be carried out gradually.

 

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Proposed not approved by parliament...they want three or four....

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CBI chief: Curbing inflation an achievement of Central Bank independence

Tehran, Jan 7, IRNA – Governor of the Central Bank of Iran (CBI) Valiollah Seif has said that control of the inflation rate is an achievement of CBI's independence.

 

CBI as an independent body which shapes financial policies, has targeted stability in prices and financial stability, Seif said at a meeting held Saturday to review the policies of Economy of Resistance. 

In the meeting, Seif expressed hope that the country would witness an economic boom without inflation. 

He further stressed the importance of peace and stability in economy in order to avoid economic shock.

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Iran capable of absorbing $20bn foreign investment

Tehran, Jan 7, IRNA – Member of the Board of Instructors of German Düsseldorf University Fereydoun Bodaghi says the Islamic Republic of Iran has the possibility to attract investment to the tune of more than 20 billion dollars.

 

Bodaghi told a press conference on Saturday that mining and mineral industries, environment protection and renewable energies are suitable grounds for attraction of investment.
He said Iran does not need investment in oil, gas or auto industries, rather there are many grounds that can be revived through using domestic and foreign sources and market the output overseas.
He added that current approach of the community of human beings is protection of environment and it seems one of the suitable grounds for investment in Iran is environment protection.
The official went on to say that different conditions of regional states like Iraq, Afghanistan, Syria, Yemen, and the like show that Islamic Iran is the safest haven in the region, so capital and investor seek safe and suitable haven for the purpose as Iran enjoys the necessary condition. 
Based on the latest statistics, value of foreign investment in new projects is more than $11.333 billion. 
Besides neighbors, a number of European states, including Germany, Italy, Spain and the Netherlands, have obtained necessary licenses for investment.
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CBI chief: Curbing inflation an achievement of Central Bank independence

Tehran, Jan 7, IRNA – Governor of the Central Bank of Iran (CBI) Valiollah Seif has said that control of the inflation rate is an achievement of CBI's independence.

 

CBI as an independent body which shapes financial policies, has targeted stability in prices and financial stability, Seif said at a meeting held Saturday to review the policies of Economy of Resistance. 

In the meeting, Seif expressed hope that the country would witness an economic boom without inflation. 

He further stressed the importance of peace and stability in economy in order to avoid economic shock.

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China opens 1st post-JCPOA LoC to Iran

News ID: 3873375 - Tue 10 January 2017 - 10:52

Economy

TEHRAN, Jan. 10 (MNA) – Deputy Iranian oil minister said Chinese companies have opened the first Line of Credit (LoC) worth 1.3 billion dollars for new refinery projects.

Managing Director of National Iranian Oil Refining and Distribution Company (NIORDC) Abbas Kazemi, while pointing to reopening of the first Chinese finance in Iran’s petroleum refinery industry in the post-JCPOA period, said “phase one of the 1.3-billion-dollar line of credit has been officially opened by a Chinese firm for the project to develop and optimize Abadan Refinery."

The official highlighted that the finance for Abadan oil refinery project had been supplied by China Export & Credit Insurance Corporation (commonly known as Sinosure) asserting that the project mainly aims to lower fuel oil output and boost production of more valuable production like gasoline and gas oil.

“The operational contract for the huge refinery project has been inked with Sinopec of China,” NIORDC head continued.

Emphasizing that the two phases of development project in Abadan Refinery would demand an aggregate total of three billion dollars of investment, Kazemi underlined that Iran enjoys 15 per cent of the share in the project while the rest of the share will be supplied by Chinese financers.

He had previously stressed that all old refineries of the country required a total of approximately 14 billion dollars for them to produce Euro-4 products and decrease fuel oil out pot to less than 10 per cent.

So far, several negotiations have been conducted and a number of MoUs have been signed with Asian firms including Daelim of South Korea, Japan Cooperation Center, Petroleum (JCCP) and Japan’s JGC Corporation as well as Sinopec of China among the others.

Abadan oil refinery project aims at stabilizing refining capacity of the 100-year-old refinery, producing based on Euro 5 Standard, reducing environmental pollutants, increasing diesel and gasoline production by improving production technology and reducing fuel oil production and collection of old tanks and facilities.

 

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JCPOA ‘helped improve economic figures’

News ID: 3866077 - Sun 1 January 2017 - 23:44

Politics

TEHRAN, Jan. 01 (MNA) – Iran’s Hassan Rouhani has spoken to nation in IRIB’s Channel One TV just 5 months after his last address earlier in August 2016.

Moderators Morteza Heidari and Elmira Sharifi Moghaddam hosted Mr. Rouhani. Unsurprisingly, economy and unemployment was the top of other issues Mr. Rouhani addressed first. He believed since the beginning of his administration, unemployment had been on the center stage of the government, with a special focus on university graduates. “From 2006 to present, net employment had been fixed; but the graduates seeking jobs outnumbered the jobs created, which had been merely 14,000 and odds annually,” he told the nation.

“Today however, the number of employed individuals has been 23 million people, but the number of unemployed still tallied with employed people, thus creating a percentage of unemployment yet; but a good news is that the government created outstanding number of jobs, staggering 700,000 net jobs in a year; the demand however is larger than the jobs created. To solve this, all should contribute to a campaign to close this gap; a method is to create grounds for young cohort to work in and produce value-added; cyber space and telecommunication is a proper ground for example; investment also should be attracted,” he emphasized, “social networks should receive more tolerance so that they give people spaces to find self-employment.”

Asked about the economic observers who believe that statistics indicated a general recession, and how this should be addressed, Mr. Rouhani believed the Central Bank was the sole authority to announce economic figures; “the projected 5-per cent economic growth was believed to be an early announcement; however, preliminary figures were indicative of a growth not recession; the focus has been on small-sized businesses with banks delegated to act as providers of finance for these businesses; in the second and third quarters, we have 7.4 per cent growth; in agricultural sector, this growth has been 5.6 per cent; in tourism, we have also a modest growth rate. In industrial sector, there has also been a growth; in oil sector, the growth is evident; the overall figure is comparable to that in the Middle East and will also be higher by March 21, 2017, the end of the fiscal year.”

“In investment attraction, the fiscal year beginning March 22, 2017, we should work harder to keep the same growth rate; after JCPOA, with modest openings for oil sector, huge investment should still be attracted and channeled into the outdated oil industry facilities and wells; the growth rate composition in terms of sectoral figures, situation is hope-inspiring and we believe the growth will be definite for the upcoming fiscal year; given the minus economic growth rates of 2011 and 2012, we have gone a long road to make positive those figures in 2014; non-oil exports have been in par with oil exports and have improved,” Rouhani detailed.

On devaluation of Rial, President Rouhani criticized speculations that government purposefully devaluated national currency to fit its economic policies to control inflation; “we believe national currency improved during the last months; however, the very recent devaluation was transient and the general policy is to control inflation, which would be deteriorated if the exchange rate experience a general perturbation and in a volatile market.”

On important issue of JCPOA, Rouhani reaffirmed Iran’s commitment to the deal and expressed hopes that parties to the deal would act according to their commitments, which would be benefit all sides.

“The JCPOA undoubtedly was a national achievement; regardless of the domestic critics of the deal, it is a great achievement where six world powers admitted that Iran had not been seeking nuclear weapons; Iran sought a win-win situation; the impacts of the JCPOA have already been translated to improvements in our economic figures; if it was not hit, our oil income would have been severely shrunken, with the ensuing lack of liquidity of the government; oil exports helped government to bring some organization to its commitments in payment of its employed staff; this is crucial in terms of bringing the general conditions to a certain level of welfare; in terms of insurance coverage, many underprivileged citizens were covered; such achievements would not be possible except for oil income which was a boon by the JCPOA,” he told Morteza Heidari.

“The situation in our nuclear program is also propitious; we now export heavy water; in our airline industry, we secured deals with Airbus to renew our air fleet; they will be financed by financiers and no public budget will be paid for new planes,” Mr. Rouhani rejoiced to say. “JCPOA restored the world’s trust to Iran; we defeated Iranophobia which had been on agenda by certain countries; now, we are in a position far better than it before JCPOA; in Syrian crisis, the UN resolution on Saturday, admits Iran’s positive and constructive role in resolving the crisis; we secured a situation where many resolutions were cancelled and Iran found recognition in the international community. The commonsense would see these all achievements positive,” he added.

On post-Aleppo Liberation and the current situation in the Middle East, Mr. Rouhani told the nation that Iran’s role had been admitted by the majority of the international community as positive; “in regional policy, we pursue a general stability for the countries in the region as the sole modus operandi of the international relations; terrorism, on the other hand is a threat to global peace and security; in Iran, we are envied by the neighbors, for which we are indebted to our intelligence and military; government and the Establishment had been largely successful in this important matter. In frontiers as well, we see the security and stability, and the military has done excellent job; in Syria and Iraq, Iran has been there only by official requests of those countries; our general policy is to keep the geographical borders on place; we do not sponsor disintegration of the countries; we believe diplomacy and resistance would achieve many things; the ultimate approach is resistance; in Syria, we helped government and people to defeat terrorism, along with dynamism in diplomatic corridors, and in trilateral meeting in Moscow secured good steps and in Astana, we believe we will be witnessing a ground-breaking situation in bringing stability to Syria and final defeat of terrorists,” Rouhani told the nation.

“Istanbul terror attack is condemned; terrorism should be confronted; in the region, there is a long way to go still and all should contribute to that ideal situation to be reached,” he added.

On his cabinet changes and cultural priorities, Mr. Rouhani said that the culture was in the focus, since the first round of cabinet reshuffle hit those ministries; “in terms of hi-tech companies, government has a general policy of sponsoring research in the academia and to facilitate university-industry links; social matters are crucial for the cabinet; unemployment is closely related to young people problems, delinquency and drugs; addiction should be addressed. Single-mothers are also to be a concern; on restrictions on holding concerts, we believe there should be a level of tolerance; no concert should be cancelled with a trifling pretext; there should be a general coordination between different organizations engaged in opening the cultural atmosphere to serve the nation,” he emphasized.

On Citizens Rights Charter, President Rouhani believed his cabinet had been working on the Charter since the government assumed position; “the Charter is the product of hours of discussion and debate by the academia and the experts with the government; the criticism that the government has inaugurated the Charter with plans to affect the results of upcoming presidential elections; with months still for the government to serve the nation, no actions should be seen as propaganda by the government; we believe the Charter should be publicly explained and hope that it will help the national unity; for success of the Charter, however, all government branches should coordinate and cooperate,” he told the nation.

The Salary Bill Scandal was the last but not the least issue touched by Rouhani; “I believe that if the issue should be resolved, then all should cooperate; the government was the first to announce the inordinate amount of the salary bills; the structural glitches along with cronyism and other problems including a large government and a sluggish public sector contribute to the scandal; however, the number of individuals and high-ranking officials had been only few hundreds; lack of transparency in payment system should also be addressed as the most important contributing factor; transparency will pay off and government thus entered action to address the problem and we believe all other parts of the Establishment should follow the suit; we believe there has been no crime committed; we call political parties not to launch this issue as election season issue, since in fighting corruption, all should participate; privatization and smaller government will also be a good option to avoid the situation similar to Salary Bill Scandal,” he said.  

 

SH/LIVE

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On devaluation of Rial, President Rouhani criticized speculations that government purposefully devaluated national currency to fit its economic policies to control inflation; “we believe national currency improved during the last months; however, the very recent devaluation was transient and the general policy is to control inflation, which would be deteriorated if the exchange rate experience a general perturbation and in a volatile market.”

 

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5 minutes ago, screwball said:

the overall figure is comparable to that in the Middle East and will also be higher by March 21, 2017, the end of the fiscal year.”

“In investment attraction, the fiscal year beginning March 22, 2017, we should work harder to keep the same growth rate; after JCPOA, with modest openings for oil sector, huge investment should still be attracted and channeled into the outdated oil industry facilities and wells; the growth rate composition in terms of sectoral figures, situation is hope-inspiring and we believe the growth will be definite for the upcoming fiscal year; given the minus economic growth rates of 2011 and 2012, we have gone a long road to make positive those figures in 2014; non-oil exports have been in par with oil exports and have improved,” Rouhani detailed.

 

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Economy

TEHRAN, Jan. 10 (MNA) – NIOC deputy head said in case the plan to increase recovery factors of oilfields by 14 per cent becomes realized, 400 billion dollars will be added to worth oil reserves.

Deputy Head of NIOC for Development and Engineering Affairs Gholamreza Manouchehri, who was addressing an international oil and energy conference on Tuesday morning, pointed to the need to limit greenhouse emission and further environmental monitoring on the part of producers saying “several geo-energy developments are taking place as the US has turned into a gas exporter and is likely to export oil in the future hence the need for Iran to maintain its position in the field of energy.”

The official recalled that Iran, for an extended period of time, has recovered oil using conventional methods and even by injection of water or gas in certain fields asserting “today, we have conceded to an output level of nearly four million barrels per day while many of the country’s reserves are suffering from a plunge in production,” he asserted.

He pointed to the uplift in gas production thanks to developments in South Pars phases stating that the current gas output level in South Pars field currently stands at 500 million cubic meters and the share of natural gas in the country’s energy market has climbed to about 70 per cent.

The NIOC official stressed that 85 per cent of urban and suburban population of Iran enjoy access to the national gas network; “despite the upsurge in oil and gas output, certain raw layers still remain untouched.”

Referring to the objective to boost recovery factor of oil and gas fields maintaining that “recovery factor in oilfields needs to jump from 26 to about 40 per cent, an endeavor which requires 30 years of continuous effort.”

“Assuming that the overall capacity is 800 billion barrels, the 30-year plan will add one percent equal to eight billion barrels to Iran’s oil reserves,” commented Manouchehri adding that the scheme will add approximately 400 billion dollars to the worth of Iranian oil and gas reserves.

The official warned that any loss of opportunities to exploit existing capacities, especially in joint fields, will give way to neighbors to carry the day.

Deputy Head of National Iranian Oil Company (NIOC) said 30 billion dollars of investment had to be attracted to expand upstream oil sector underlining that, under the terms of the Sixth National Development Plan, if the aggregate total of investment hits 200 billion dollars in a five-year period, domestic investors will enjoy 70 percent of the investment share.

Emphasizing that the country lags behind in the recycling sector, Gholamreza Manouchehri reiterated that certain oil-producing countries have made advancements in the issue.

“Iran also possesses excellent capacities for shale oil production which will move forward in line with developments in technology,” he concluded.

 

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TEHRAN, Jan. 10 (MNA) – Deputy Iranian oil minister has reported on inking agreements between Iran and Iraq over joint development of two oil fields.

Iranian Deputy Oil Minister for International Affairs Amir Hossein Zamaninia expounded on details of new oil deals between Iran and Iraq saying “two joint MoUs were inked during a recent visit to Iraq of an Iranian delegation.”

“On Memorandum of Understanding (MoU) pertains to development of Parviz and Khorramshahr oil fields,” stated the official adding that the second agreement had been signed between private sectors of the two neighboring countries in other areas of oil industry like crude oil, equipment, gas exports and modernization of Iraqi refineries.

On the timetable for resumption of gas exports to Iraq, Zamaninia explained that both sides were ready for the process though Letters of Credit (LCs) first needed to be opened for exports to start over.

He noted that banking issues had to be fully resolved before Iranian gas could be deployed to Iraq stressing that “a letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount.”

Deputy oil minister however reassured that the required LC for exports of Iranian gas to the neighboring country would be soon opened in time with the visit of an Iraqi delegation to Tehran; “Deputy Oil Minister of Iraq for Gas Affairs Hamid Younis Salih recently announced that his government has allocated the desired amount for the project.”

Amirhossein Zamaninia went on to say that another axis of the second MoU with Iraq was construction of Basra-Abadan crude oil pipeline concluding “in the visit to Iraq representatives of the National Iranian Oil Company (NIOC), National Iranian Gas Company (NIGC), National Iranian Oil Pipeline and Telecommunication Company were present.

 

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NPC to inaugurate 5 new petchem projects

News ID: 3872773 - Mon 9 January 2017 - 16:04

Economy

TEHRAN, Jan. 09 (MNA) – NPC managing director has announced that five new petrochemical plans are scheduled to become operational within weeks.

Managing Director of the National Petrochemical Company (NPC) Marzieh Shah-Daei made the remarks adding that three more plans will come on stream early in to the upcoming Iranian calendar year (to begin March 21).

She further asserted that Phase 2 of Kavian petrochemical complex with a capacity of one million tons, the second phase of Morvarid petrochemical company with 550 thousand tons of capacity, Entekhab petrochemicals with a capacity of 250 thousand tons as well as Takhte Jamshid petrochemical project with a capacity of 250 thousand tons were ready for operation.

Deputy oil minister noted that Phase two of Pardis petrochemical complex would also come on stream by the end of the current Iranian year while three more projects are slated to begin production at the beginning of the next year.

Shah-Daei estimated that the output figure for Iran’s petrochemical industry will rise from the current 64 million tons to over 100 million tons while the target for the present year stands at 50 million tons.

She recalled that approximately 10 million tons of various petrochemical products worth about nine billion dollars had been deployed to global markets.

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JCPOA implementation commission to discuss ISA extension in Vienna

The joint commission monitoring the implementation of the 2015 nuclear accord between Tehran and six world powers is to hold a meeting in Vienna, Austria, to discuss Washington’s extension of an anti-Iran sanctions law.

The monitoring body will convene for a sixth meeting on Tuesday, with deputies and political directors from Iran and the P5+1 – Russia, China, France, Britain, the US and Germany -- as well as European Union Political Director Helga Schmid in attendance.

It held its first edition in October 2015, months after the two sides inked the landmark nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA).

The JCPOA, which took effect in January 2016, removed nuclear-related sanctions against Iran in exchange for the Islamic Republic placing certain limits on its nuclear program.

Prior to the Tuesday meeting, Iranian experts met their counterparts from other delegations, including the Americans.

A taskforce, which has been set up to monitor sanctions relief, meanwhile, met on Monday, and is to report to the commission as it meets.

This time, the commission is convening at Iran’s request to address Washington’s decision to extend an anti-Iran sanctions law, a move Tehran has slammed as a violation of the nuclear deal.

Last December, the US Congress voted to extend Iran Sanctions Act (ISA) for another 10 years. The law, which authorizes the US president to re-impose the bans, was first adopted in 1996 to punish investments in the Islamic Republic over its nuclear program and its support for anti-Israeli resistance groups.

Outgoing US President Barack Obama later declined to sign the bill, but White House Press Secretary Josh Earnest said he had decided to allow the legislation to become law without his signature.

 

The ISA’s extension came despite numerous reports by the International Atomic Energy Agency (IAEA) confirming Iran’s commitment to the JCPOA.

In a retaliatory measure, Iranian President Hassan Rouhani instructed Foreign Minister Zarif on December 13, 2016, to take action to follow up on the US violations of the JCPOA as per the provisions of the deal and to take other legal and international measures necessary in that regard.

He also ordered the Atomic Energy Organization of Iran to plan work on nuclear propulsion devices to be used in sea transport.

Based on Rouhani’s directive, Zarif later sent a letter to the European Union foreign policy chief, Federica Mogherini, calling for a meeting of the joint commission to discuss the recent US move.

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Iran ready to export gas to Iraq

Iran is ready to proceed with a much-awaited project to export natural gas to Iraq as soon as Baghdad takes measures to make the related payments.

Iran's Deputy Oil Minister for International Affairs and Trading Amir-Hossein Zamani-Nia was quoted by Press TV as saying that a pipeline that has been established between Iran and Iraq was already filled with natural gas.

"Iran is ready to start gas export to Iraq and Iraq is also ready to receive the gas," Zamani-Nia said.

"However, the related letter of credit (L/C) for the project is yet to be opened," he said adding that Iran would turn on the taps once the payment was made by Baghdad.

This, the official further underlined, could take place during an upcoming visit to Tehran by an Iraqi delegation.

Iran announced last summer that it was ready to export gas to Iraq. However, the project had been suspended over security risks resulting from insecurity in Iraq.

The two countries signed a basic agreement for the export of natural gas from Iran's South Pars Gas Field to Iraq in 2013.

Based on the agreement, Iran would start exporting 25 million cubic meters (mcm) a day of gas to Sadr, Baghdad and al-Mansuriya power plants through the 270-kilometer pipeline. The amount would increase to 35 mcm/d during summer.

The project is estimated to bring in an annual $3.7 billion for Iran.

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Iraq eyes recapture of east Mosul within days

Iraqi forces will retake east Mosul from the terrorists within days, a top commander said Monday, after his fighters in the city reached the Tigris River for the first time.

Iraqi forces have retaken a series of areas in eastern Mosul since launching an operation to recapture the city from Daesh on October 17, but the west remains under the terror group’s control.

East Mosul will be retaken within "a few days, God willing," Staff Lieutenant General Abdulghani al-Assadi, a top commander in Iraq's elite Counterterrorism Service, told AFP.

Assadi's remarks came a day after officials said Iraqi forces in Mosul had reached the eastern side of a bridge across the Tigris River, which divides the city, for the first time during the operation.

Assadi said that "the bridge fell tactically," though Iraqi forces were still some 150 meters away.

The general also said that "our units... are close to encircling Mosul University," whose sprawling campus is located east of the Tigris.

Daesh overran Mosul and swathes of other territory north and west of Baghdad in 2014, sweeping aside security forces that were ill-prepared to face the assault.

Tens of thousands of Iraqi forces launched an offensive on October 17 to retake Mosul, the last major urban centre in Iraq still controlled by the terror group that seized around a third of the country in 2014.

Several areas around the city, Iraq's second largest, were swiftly re-conquered, but the elite forces that pushed into the streets of Mosul itself have faced stiffer than expected resistance.

In late December, the federal advance inside the city had slowed to a crawl but a fresh coordination effort between CTS and other forces gave fresh impetus to the operation.

 

 No escape

Iraqi forces made rapid progress since the start of 2017.

"It's pretty excellent progress that they've made over the last couple of weeks, since they restarted the operation on the 29th" of December, coalition spokesman Colonel John Dorrian said.

"They have synchronized three axes of advance... and that's more than the enemy can solve," he said, referring to elite interior ministry and other forces also operating inside Mosul.

Dorrian said that CTS's foray to the Tigris had more than just symbolic value for the 12-week-old operation to retake Mosul.

"The Tigris – that's a natural landmark and a barrier that the enemy would have to navigate to either escape or reinforce," he said.

"It's important because it stops the enemy from being able to resupply," Dorrian said.

"It also cuts off avenues of escape for the remaining enemy... it doesn't make it impossible but it makes it very difficult."

Iraqi Prime Minister Haider al-Abadi had promised that his forces would rid the country of Daesh by the end of 2016 but he admitted a few days ago that it could still take several more months.

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Iran says its production of oil has reached around 4 million barrels per day (mb/d) – a yet another indication that the country is regaining its crude production abilities after multiple years of sanctions.

The announcement was made by Gholam-Reza Manouchehri, the deputy for development and engineering affairs of the National Iranian Oil Company (NIOC).

Manouchehri told the domestic media that the country was already on the way to make a stronger oil market recovery, emphasizing that this would be expedited through the development of several key projects within the next few years.

He named South Azadegan as a crucial project over which Iran was negotiating with several global energy giants.  The official emphasized that a tender for the development of South Azadegan – which is located in the oil-rich southwestern province of Khouzestan - would be held within the next month.

Manouchehri said that the NIOC expects Chinese companies to team up with European giants over South Azadegan. He added that they would have to also bring an Iranian company on board under the regulations for the new format of Iranian oil-sector contracts.

South Azadegan was discovered in 2001 and was described at the time as the world’s biggest oil find in decades.  It has recoverable reserves of about 2 billion barrels.

Located in a former theater of Iran-Iraq war (1980-88), South Azadegan is believed to be connected with Iraq’s supergiant Majnoon oil field which has recoverable reserves of 13 billion barrels which was also being developed by Shell and is now producing 200,000 barrels per day (bpd) of oil for Iraq.

Iran has already signed five basic agreements with companies including Shell, Total, Inpex for the development of South Azadegan. 

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Iran, 5+1 discuss Washington’s anti-Iran sanctions

1. Politics

January 10, 2017

 

TEHRAN – Delegates from Iran and 5+1 group gathered in Vienna, Austria, on Tuesday to discuss the implementation of the nuclear deal and address the extension of the anti-Iran sanctions by Washington, IRNA reported.

This is the sixth time that the signatories to the international nuclear deal – which consists of Iran, the five permanent members of the UN Security Council plus Germany - come together to address issues raised over the implementation of the agreement, officially named the Joint Comprehensive Plan of Action or the JCPOA.

The meeting comes nearly a month after Iranian Foreign Minister Mohammad Javad Zarif called on the involved parties to address the U.S. renewal of sanctions against Iran.

The Iran Sanction Act (ISA) was first ratified in 1996 under the Clinton administration to rule out investment in Iran’s energy sector.

The Senate voted on December 1, 2016 unanimously in favor of extending the sanctions a further ten years.

Iranian officials consider the move a violation of the nuclear pact.

Under the JCPOA a joint commission of the seven signing countries monitors the implementation of the deal to resolve the issues raising with its implementation.

Prior to the Tuesday meeting, Iranian Deputy Foreign Ministers Aabbas Araqchi and Majid Takhtravanchi met with Secretary General of European External Action Service Helga Schmid.

“The extension of the Iran Sanctions Act is a breach of the U.S. obligations under the nuclear agreement,” Araqchi said, calling for “effective measures” to address the breach.

Iranian experts also met their counterparts from other involved countries, including the U.S.

Araqchi, who also heads Iran’s JCPOA follow-up committee, said on Monday that Iran will not tolerate breaches of the international agreement by a certain party.

He further said that the Islamic Republic will take appropriate responses to such violations.

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The total value of forex operations conducted by Bank Sepah stood at $3.714 billion during the 10 months to January 3, marking a 31% growth compared with the previous year’s $2.828 billion. Mostafa Partoafkanan, a board member of the bank, announced that Sepah has issued $1.837 billion worth of L/Cs in this period. “Our bank has also issued $1.28 billion worth of payment orders during the past 10 months,” Sepah’s website quoted him as saying. Partoafkanan also referred to Central Bank of Iran’s June decree, which allowed bankers to start dealing in foreign exchange at the market rate, saying that it has had a considerable effect on Sepah’s performance. Back in July, the banking system got the thumps-up from CBI to trade in foreign currencies at the open market rate.

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The first deputy speaker of the Majlis called for better and more developed interactions between the parliament and the Central Bank of Iran, considering the importance of the bank’s operations for policymakers.

“Increased interactions between the CBI and Majlis are of paramount importance,” Masoud Pezeshkian was also quoted as saying by the official news website of the central bank.

“The central bank must clearly outline its expectations from the parliament and the administration and provide the legal instruments and authority required to ensure sustained financial stability, implement monetary and foreign exchange policies and establish suitable payment systems through good interactions,” he added.

Pezeshkian made the statements during a visit to CBI’s Information Technology Department accompanied by Mehdi Faqihi, the head of the Office for New Technologies affiliated with Majlis Research Center. They met with information technology officials of the central bank.

The first deputy speaker of the parliament also referred to criticism against the banks, saying they have been put forward because “of a lack of loan allocation” and unfamiliarity with the way the banking system works.

“The central bank needs to establish connections to familiarize applicants, the public, officials and policymakers [with the banking system],” he said.

Pezeshkian, who is also a former health minister, stressed that the parliament needs the instruments and supervisory information provided by CBI.

The parliamentary official added that this information must be sent to members of parliament in the form of strategic and understandable reports, noting that when the decisions are made based on credible information, “regulation and policymaking will help improve the current situation”. He emphasized that there is a need for strategic planning to reach long-term goals and prospects, as their lack is tangibly felt at the moment.

“That is also the reason why current data and information are not used properly,” he added.

Pezeshkian noted that organizations must know their mandate and the limitations of their authority well and also possess the tools to implement it and manage their operations.

“The parliament is ready to establish good interactions with the organizations wherever there is a legal void and whenever legal measures are required,” he said.    

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Iran and Iraq have come up with preliminary agreements to develop joint fields and expand cooperation in the gas sector, said Amirhossein Zamaninia, deputy oil minister for international affairs.

Discussed during an Iranian delegation's visit to Iraq last week, the agreements are expected to be signed by the oil ministers of the two countries, IRNA reported.

"The first memorandum of understanding is on developing Parviz Oilfield adjoining Iraq's Naft Khaneh field and Khorramshahr Oilfield, known as Sinbad along the Iraqi border," he said.

Sinbad is located in the district of Shatt al-Arab near the Iraq-Iran border.

The second MoU covers gas exports, renovation of Iraqi refineries, manufacturing of equipment and holding training courses related to the oil and gas industry.

Iran and Iraq have developed a pipeline for the export of Iranian gas to power plants in Baghdad and Iraq's second-largest city Basra.

Export will reportedly begin at 7 million cubic meters per day and soar to a high of 35 mcm/d during the hot season, the time of the year marked by chronic outages in Iraq.

"We are now ready to start gas supply to Iraq," Zamaninia said, adding that the gas flow will begin once the two sides settle financial details.

The Iranian mission was made up of representatives from the NIOC and NIGC—state-owned oil and gas companies—and the Iranian Oil Pipeline and Telecommunications Company.

The trip also reportedly aimed to thrash out a new electricity export deal with the Arab neighbor, following the expiration of the previous contract at the end of last year.

"Negotiations also have been held over laying a pipeline between the city of Abadan in Khuzestan Province and Basra, Iraq's southeastern city, for the transfer of crude oil and petroleum products," Zamaninia said without providing details.