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Iran Press: Article Reviews Trade, Energy Cooperation With UK

Posted on: Saturday, 29 October 2005, 12:00 CDT

Text of article by the Fars News Agency under the headline: "How much will England come to harm because of Iran's sanctions?" by Iranian newspaper Iran on 27 October

A comprehensive review of the extensive and active presence of Britain in different sectors of the Iranian economy, together with the volume of the two countries' bilateral interactions in the areas of trade, banking and finance all point to the multi billion dollar economic interests of that country in Iran, which cannot be overlooked easily.

A ban on the import of British goods to Iran - that is to say a subject which became the centre of some hot debates by the media in the past few days - is something which can be put to actual practice after carrying out a full study of the extensive and active presence of Britain in different sectors of the Iranian economy, and the two countries' bilateral interactions in the areas of trade, banking and finance.

On the basis of this report [as written], with a trade volume of 693 million euros with Iran in the last year, Britain was the seventh largest trading partner of Iran, and the international accounting banks have announced that Iran owes 1.8 billion dollars to British banks, and in that context, Britain ranks third among European countries.

On the basis of this report, by buying 84,000 barrels [of oil] a day from Iran, the Shell company was the third largest oil importer from our country, while the British company British Petroleum ranked fourth, by purchasing 41,000 barrels a day.

The Shell oil company, which has won a 1.6 billion dollar contract to develop the Nowruz and Sorush oil fields, is currently in negotiations to develop Phases 12 and 13A of the South Pars [gas] field and also the Yadavaran oilfield.

Furthermore, the contract to develop Phase 13 of the South Pars field was won by Britain's Shell company and Spain's Raspsol company.

The managing director of the Iranian National Company for Gas Exports recently announced that Britain had officially joined the group of buyers of Iran's natural gas. At the same time, he also spoke about the signing of a memorandum of understanding on an initial export of 2 million tonnes of liquid natural gas (LNG) to Britain.

On the basis of this report, in the wake of the active presence of the European countries of France and Germany in the Iranian automobile industry, the British officials too have been thinking of ways of reviving the fortunes of their country's bankrupt car making company Rover, through winning a share in the Iranian market of some 70 million people. In that connection, there were even some negotiations between the officials of the two countries about the sale of that bankrupt company to Iran.

Referring to the fate of the Rover company, the British Ambassador in Tehran had earlier said: At the present, some circles favour the continued production of Rover cars by assembling them in Iran, and negotiations about this subject are still progress. The Rover company has received many proposals from several countries, including Iran.

The British Ambassador in Tehran referred to the negotiations between an Iranian car making company and the Rover group, and said: The [Iranian] Industries Ministry is not involved in the affairs, and the Iranian car making companies are negotiating with the Rover company.

The Iranian company Dastan is seeking to sign a contract with that British company, and by purchasing some 150,000 cars from that company, it intends to save the Rover group from bankruptcy and prevent the job losses in that company.

In the next 18 months, the said Iranian company will purchase 150,000 Rover 75 and Rover 25 cars, in order to respond to a part of the growing demand for automobiles in the country.

The report has emphasized: On the basis of this plan, gradually and with the passage of time, the Rover company will turn the business of selling ready-made cars to Iran into a venture to produce spare parts and assembling the cars in Iran. In the end, around 150,000 new Rover cars will be produced per year in Iran.

The British bank the Standard Charter recently issued a permit for the opening of a branch in the Kish Island. The Standard Charter is one of the famous British banks, which will come to Kish after the Iran-Europe Bank starts its business there.

It should be noted that last month, the Iran Khodro company had signed a contract on receiving a loan of 100,000 million dollars from the Standard Charter Bank.

Furthermore, on the basis of this report, since October this year, the Iranian National Company for Gas Exports has selected the British bank HSBC as its consultant in the 2.7 billion dollar project on export of natural gas to Europe and Asia.

In August this year, the HSBC bank also granted a loan of 154 million dollars to the Iranian National Petrochemical Company.

The report went on to say: Some 60 per cent of the shares of the polystyrene, styrene, and ethyl benzene units of the Pars Petrochemical Complex has been granted to the 15th Khordad Foundation, and the remaining 40 per cent has been left at the disposal of the Iranian International Petrochemical Company, and in this connection, 85 per cent of the credits for the polystyrene unit will be paid by a British company, and the remaining 15 per cent by the Iranian International Petrochemical Company.

The HSBC bank of Britain and the Societ\ General [of France] are the financial consultants for two other liquid gas projects in Iran.

In addition, a contract on the construction of the Bid Boland-2 gas refinery has been signed with a consortium made up of the Constain Company of Britain, the Sazeh Company [of Iran], and the Spanish firm Dragados. The consortium is led by the Constain Company.

Furthermore, the executive director of the Pars Petrochemical Complex has announced: On the basis of their previous undertakings (in late May 2005), the European banks will be providing funding for the polystyrene project at the Pars Petrochemical Complex.

Daryush Riyahifar said that the credits required by that project would be around 30 million dollars. He added: This project will be implemented with the cooperation of the Simon company from Britain, and the Iranian Energy Industries Engineering and Design Company.

The Iranian private sector will soon establish the largest aluminium factory of the country in Nahavand, with an investment of 1.4 billion dollars, and the primary material required by that factory will be supplied by both domestic and foreign sources, including the British company ITM.

On the basis of that report, up to now, 107 economic units have been set up in the Salafchehgan Special Trade Zone, and 16 foreign companies from Belgium, Germany, France and Britain are active that zone with a total investment of 118 million dollars.

Furthermore, a consortium made of Penta Ocean company of Japan and H R Wallingford of Britain offered the lowest cost estimate for the project on construction of a second port installation in Bushehr.

The British company Borma Castrol, which used to operate in 60 countries of the world under the licence of Castrol, was sold to the British Petroleum in 2000 for the total price of 4.7 billion dollars.

Furthermore, in 2001, the oil company British Petroleum signed a contract with an Iranian company according to which the Iran Castrol company was established. British Petroleum owns 51 per cent of that company's shares, while the remaining 49 per cent is held by Iran.

Source: BBC Monitoring Middle East

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