The Secretary General of the Petrochemical Industry Employers’ Association expressed appreciation for the Ministry of Oil’s new approach in cooperating with the private sector

According to Energy Press, Iran’s petrochemical industry, as one of the main pillars of the non-oil economy, has stepped into the field with a strategic plan in a situation where energy imbalance has become one of the main challenges of the country’s energy system. In order to ensure its sustainable supply and help reduce the imbalance, this industry has put investment in the development of gas fields on the agenda. In the meantime, the pivotal role of the Ministry of Oil in the 14th government in facilitating this path and accompanying the private sector is considered a turning point in cooperation.

Natural gas plays a vital role in the value chain of the petrochemical industry. However, in recent years, the development of gas supply and the growth of domestic and commercial gas consumption, along with the restrictions created following sanctions for the development of new fields, have increased the gap between supply and demand. This growing imbalance, especially in the cold seasons of the year, has seriously risked the security of gas-consuming industries, especially petrochemical complexes, and has affected the production of the petrochemical industry.

In such circumstances, the government’s resolution allowing large energy-intensive industries and petrochemical holdings to directly invest in the development of gas fields was presented as a smart solution to overcome this challenge. This strategy not only helps to provide a sustainable feedstock for the development of the petrochemical industry, but also removes the heavy burden of upstream investment from the government and brings the capable private sector to help solve a national problem; a strategy that unfortunately took years.

In March 2023, during the Supreme Leader’s visit to the Progress Exhibition in Imam Khomeini’s Husseiniyeh, one of the private sector activists in the petrochemical industry (Ahmad Mahdavi Abhari) presented a report on the country’s gas imbalance. Referring to the obviousness of the gas imbalance, he announced that the private sector is ready to invest to help resolve this problem and provide its required feedstock, but it has been waiting for three years to receive an investment license.

The next day, in his speech at the same Husseiniyeh, the Leader of the Islamic Revolution pointed out the length of the administrative processes by raising the question of why the issuance of an investment license should take three years. However, in practice, there was no change in the existing process.

In 1403, this issue was brought to the attention of the Supreme Leader of the Revolution again, citing the same private sector activist; with the difference that the waiting time had increased from three years to four years. The Supreme Leader again emphasized the need to expedite the issuance of licenses. With the commencement of the 14th government, this issue was seriously put on the agenda.

On May 19, 1404, Mohsen Paknejad, Minister of Oil, announced on the sidelines of the second day of the 29th International Oil, Gas, Refining and Petrochemical Exhibition: Since the beginning of the 14th government’s activities, a team has been established in the Ministry of Oil that is fully familiar with the challenges of the process of concluding and implementing contracts. This action reduced the multi-year time gap between signing contracts, which was previously outside the direct will of the Ministry of Oil, to about 6 months. Thus, the demand of the Supreme Leader of the Revolution was realized in the 14th government, and the process of issuing investment licenses in this area was shortened with an interactive and facilitative approach.

Although the idea of ​​investing in upstream petrochemicals has been raised for several years, what gave new life to this issue in the 14th government was the serious determination and interactive approach of the Ministry of Oil, which, with the Supreme Leader’s emphasis as a grand strategy, shortened and facilitated the process of issuing licenses for this investment.