Restrictions Relaxed for Investment Attraction

TEHRAN (Shana) -- The Iranian Petroleum Ministry has invested over $77 billion in the Pars Special Economic Energy Zone (PSEEZ) since 1998. Majid Asgharian, director of PSEEZ Investment Attraction and Economic Development Division, says an ad hoc committee has been set up to accelerate the process of attracting investment.

In an interview with "Iran Petroleum", he said the committee would help streamline bureaucracy.

The following is the full text of the interview he gave to "Iran Petroleum".

How much investment has been attracted in PSEEZ from the private sector during the 2013-2017 period?

From 2013 to 2017, a total of IRR 372,244 billion was invested in PSEEZ by the private sector, mainly in midstream petrochemical projects like propylene, ethylene glycol or refining projects.

What policy has PSEEZ been following to attract private investment?

Attracting investment into special zones is strongly affected by ever-changing internal and external conditions. Under circumstances where foreign exchange fluctuations have been causing turbulence in domestic economy investment all across the country would be naturally affected by foreign exchange and monetary fluctuations. Hopefully, relative stability has been back to the foreign exchange market after the adoption of effective measures in this sector. Therefore, investors are expected to be able to make long-term plans for investment. In this regard, midstream and downstream industrial sectors are in the spotlight for the attraction of investment in case conditions remain stable. The policy pursued by PSEEZ is to benefit from domestic or foreign investors and finance projects with a view to strengthening national economy and blunting the impact of sanctions. For this purpose, at stake is hard currency generation by the projects. In other words, attracting investors to supply national needs for commodity and services and export commodity and services at the same time could prove effective in the status quo. Assisting investors in attracting domestic and foreign financial contribution and establishment of financing consortiums within the boundaries of PSEEZ authority is another policy pursued by PSEEZ. Benefiting the technical and financial capacities of petrochemical giants for the purpose of implementing economically viable and advantageous projects is an effective policy envisaged by PSEEZ authorities.

What will you do to streamline bureaucracy in the process of attracting investment?

The cases of adverse possession and the shortage of fundamental infrastructure for investment in the downstream, semi-heavy and combined industrial sites and logistics, lack of environmental regulations, absence of installation corridor, existence of parallel divisions within PSEEZ and other factors have strengthened bureaucracy in the process of attracting investment.

PSEEZ is determined to eliminate unnecessary activities and draw up suitable instructions and make arrangements between different sectors in a bid to reduce bureaucracy of investment attraction both before and after conclusion of agreement to prepare the ground for the effectiveness of such process. To that end, an ad hoc committee on investment attraction has been set up at PSEEZ to study issues related to this sector.

How much investment has been made at PSEEZ ever since its establishment?

The investment attracted into PSEEZ ever since its establishment totals $77 billion plus IRR 330,000 billion. Breaking down the figures, we have had $68 billion plus IRR 33,877 billion in the gas processing industry, $8 billion plus €18 million plus IRR 172,250 billion (without considering foreign exchange fluctuations) in the petrochemical sector and IRR 25,000 billion in the infrastructure.

What are PSEEZ potentialities which would be instrumental in attracting the private sector’s investment?

The main advantage with PSEEZ is energy. Rich gas reserves have created significant potential for investment in the gas and petrochemical sectors. Given investment made in the upstream gas industry, it is clear that there is big potential for petrochemical industry development in the zone. For this reason, nearly 17 petrochemical plants have hitherto become operational and 19 others are under way. Once these petrochemical projects have become operational, the creation of petrochemical industry value chain in this zone would prepare the ground for further activity of the private sector. Nevertheless, I may summarize incentives for investment at PSEEZ as follows:

  1. Importing commodities via special zones for domestic consumption would be subject to import and export regulations, while exporting commodities via these zones would be subject to no procedural formalities.
  2. Importing commodities from abroad or free trade-industrial zones into PSEEZ is done with minimum customs formalities, while domestic transit of imported commodities would be subject to related regulations.
  3. Importing commodities to zones located at points of entry would be exempt from any customs formalities.
  4. The commodities brought into PSEEZ from outside or from free trade-industrial zones or other zones may be exported without any customs formalities.
  5.  After classifying and valuing the zone, PSEEZ Directorate is entitled to transfer the right of using parts of the zone to competent natural or legal persons.
  6. The owners of commodities imported into the zone can declare their goods in whole or in part to customs authorities for temporary entry into the country or clear them in compliance with regulations.
  7. In case the process of commodities imported into the zone would change the customs tariffs for the goods, the commercial profit calculated for the entry of such goods into other parts of the country would equal the commercial profits granted to raw materials and imported parts.
  8. Importers of commodities into zones can assign their commodities wholly or in part to others against negotiable separate warehouse deposit receipt which would be issued by PSEEZ Directorate, in which case the holder of the receipt would be considered as the owner of goods.
  9. The directorate of each zone is authorized to issue origin certificates for the goods which are exported from the zone upon request and after confirmation by the Iran Customs Administration.
  10.  All commodities which are imported into the zone for production or services are exempt from general regulations on imports and exports. Transferring such commodities to other parts of the country would be subject to imports and exports regulations.
  11. The commodities manufactured in special economic zones, as well as raw materials and spare parts imported into the mainland from these zones are not subject to pricing regulations.      

PSEEZ, located near the Persian Gulf, was established in 1998 to expedite the construction of refineries as well as giant oil and gas facilities in Assaluyeh, enhance Iran’s gas and condensate exports and also to facilitate attraction of domestic and foreign investment.

PSEEZ incorporates Pars 1 (South Pars), sprawling on 14,000 ha of land where Assaluyeh is located, Pars 2 (Kangan), covering 16,000 ha of land, and Pars 3 (North Pars) covering 16,000 ha of land.

The South Pars zone is home to 16 gas processing phases, 15 petrochemical plants as well as downstream petrochemical facilities. Pars 2 is home to eight refinery phases and a liquefied natural gas (LNG) project. Pars 3 supports development of some hydrocarbon fields. The North Pars, Golshan, Ferdowsi, Farzad A and Farzad B gas fields are located in Pars 3.

Courtesy of Iran Petroleum

News Code 289133


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