In the May issue of NPC News Bulletin we brought you excerpts of some of the presentations and speeches presented to IPF2000. Below, you will find a selection of some other speeches.

The return of profitability

In his speech to the IPF 2000, Jean-Claude Barbier, Executive Vice President of the Institut Francais du Petrole (IFP) said profitability is returning to the petrochemical industry after some stormy years caused by the normal cyclical nature of the industry, crude oil price instability and the market downturn caused by severe financial crises in Southeast Asia. "Almost all indicators show improvement", he said. Barbier noted that in the next five years the demand would surpass supply. Turning to Iran's petrochemical industry, Barbier said the Iranian petrochemicals sector has the necessary ingredients for success including "crude, gas and condensate resources, growing domestic market, within easy reach of consumer markets, long experience in oil, gas and petrochemical industry, skilled manpower and existing terminal facilities". He suggested that Iran should make "large investment in olefins, aromatics and derivatives which will benefit from growing demand and economic upturn".

The way forward

Addressing IPF 2000, Mohammad Hadi Rahbari, NPC's Board Member and Managing Director of an NPC subsidiary, NPC International Ltd., pointed out that NPC repaid almost all of its financing obligations under the credit facilities it had arranged for financing its projects during the 1st development plan. Rahbari also outlined that NPC successfully financed its projects which were envisaged under the second development plan through fully utilizing a budget of $1.95 bn allocated by the Majlis (Parliament) during the past three years.

He estimated the financing requirement during the current five-year development plan (2000-2005) to be at $4bn (hard currency) which could be arranged under several financing schemes. He added that the NPC's production capacity would increase to 24m tons by 2010 and 35m tons by 2015 while the value of its exportable products would grow to $7.2bn by 2010 and to $12.3bn by 2015. Rahbari explained that at present two-third of NPC's total output is consumed locally whereas in the future 60% of the production of the new projects would be exported. He noted that because of its impressive track record in fulfilling its financial commitments, multinational banks and financial institutions have approached NPC offering it credit facilities for implementing its projects of the third five-year plan under structured and project financing which in turn will enhance the company's ability to implement its new projects.

The most competitive operations

Iain. F. Macdonald, BP Amoco's Vice President for Strategy and Planning, reviewed the petrochemical industry's trends and market characteristics as well as the Middle East production and competitive advantages. Focusing on the Middle East, he referred to low cost feed and large scale plants as the region's advantages and high build costs and high fixed costs as its risks. He said that the Middle East has already established itself as a major petrochemicals player with growing impact on its neighboring markets suggesting that the region needs more than its traditional advantages of low cost ethane and large scale to ensure good returns on new projects. Turning to Iran, he concluded that with global partners, Iran has the potential to create the most competitive operations in the Persian Gulf.

Domestic market and downstream petrochemical industries

According to Mohammad Ehtiati, Chairman and Managing Director of Petrochemical Commercial Co. (PCC), an NPC subsidiary, the prospect for Iran's local petrochemicals market is bright due to a potential growth in per capita consumption and the use of various petrochemicals in the downstream industries. He added that despite the growth in both the petrochemicals sector and its downstream industries the country is still importing some polymers and chemicals. He went on to note that given the country's population growth rate which is projected to be 1.2 percent during the next five years and the local demand for the petrochemicals-related final products, the development and expansion of Iran's petrochemical industry becomes a necessity. Turning to the country's geographical location, Ehtiati said that Iran links up important and great petrochemical consumer-markets, thus; enjoying a suitable position for supplying petrochemicals and its downstream products to such markets.

Management, privatization and the changing world

A. A. Afkhami, Chairman and Managing Director of Petrochemical Industries Investment Company (PIIC) said to IPF2000 that profitability and survival of companies depend on constant promotion of their innovation, creativity, learning, quick response to demands and vision. He reviewed the status of the private sector in Iran's petrochemical industry saying that the state no longer had any shares in some of petrochemical plants. Afkhami mentioned that with offering the shares of Arak, Kharg and Esfahan Petrochemical Companies to non-governmental entities, privatization made headway in NPC while almost all the technical services such as engineering, repair, maintenance and construction of the state-owned petrochemical plants are being carried out by private companies.

Environmentally friendly

According to S. B. Mortazavi, an Advisor to the NPC President, in the past years NPC endeavored to become an environment-friendly company. To keep up this trend, it has planned extensively to protect the environment. He stressed that in NPC, any emission or discharge means missing something that could have been turned into a valuable product. Overlooking this, he underscored, results in paying for the raw materials as well as spending hard-earned resources for constructing and operating treatment facilities. Mortazavi noted that minimizing waste, recycling and reusing effluents, monitoring and controlling the atmospheric pollutants, removing ozone depleting substances, expanding green spaces as well as conducting environmental impact assessment (EIA) are some of the environmental measures that NPC observes prior to constructing new facilities.

The God given treasure

In his speech to IPF2000, A. Salehiforouz, Managing Director of Pars Oil and Gas Co., depicted a vivid picture of the development activities and plans at Pars Special Economic/Energy Zone (ParsEE) and South Pars Gas Field. According to him, South Pars Gas Field is the world's largest independent natural gas reservoir. Located on the Iran-Qatar boarder-line, some 100 kilometers off the Iranian coast on the Persian Gulf, it is jointly owned by Iran and Qatar. The field's capacity is estimated at 350 TCF representing 6% of the world's total proven gas reserves. It also contains equivalent to 11 billion barrels of condensates. He noted that phases 1, 2 and 3 of ParsEE's development are underway and negotiations are in process for phases 4 and 5. Preliminary studies have started for phases 6 up to 10. Each phase will yield 1 billion cubic feet of gas, 40,000 barrels of condensates and 200 tons of sulfur per day.

Petrochemicals feedstocks, Iran's relative advantages

H. Ali Hajjarizadeh, Managing Director of Paravar Engineering Co., reviewed the relative advantages of Iran's available petrochemicals feedstock for producing basic petrochemicals. He explained that C1 to C4 hydrocarbons, which are used in the production of three quarters of basic petrochemicals worldwide, are readily available in Iran concluding that it is economically viable to locate major portions of additional basic petrochemicals production in the country.