Russian Maker of Steel Pipes in Talks to Supply Iran’s Oil Industry
10 March 2016
Russia’s largest manufacturer of steel pipes for the energy industry is in talks to supply Iran as the country throttles up its oil production following the lifting of international sanctions, the company’s senior vice president said Wednesday.
TMK has already sold some pipes to Iran’s energy sector after sanctions were lifted in January and hopes to conclude a longer-term contract this year with bigger tenders coming later.
“Iran is a very important market for us,” Vladimir Shmatovich, TMK’s senior vice president for strategy and business development, said in an interview.
“Now that sanctions are lifted we definitely want to restart our presence there,” he said.
The move shows the potential for Iran to have better access to more modern equipment to refurbish its aging oil industry now that Western sanctions over its nuclear program have ended. The country produces about 3 million barrels of a crude a day and seeks to increase its production by 1 million barrels a day now that European markets are reopened to its oil.
The talks with TMK also highlight how Russian companies retain a competitive advantage there despite the opening of the country to Western suppliers. Iran has said about $200 billion is needed to restore and develop its oil sector.
Iran has some of the world’s largest oil and gas reserves, but the infrastructure to produce and transport the oil and gas is creaking after years of underinvestment.
“If the infrastructure was old before sanctions, now it’s even older,” said Mr. Shmatovich, adding: “They need everything—storage, tankers, refineries.”
While sanctions were still in place, Russia had to follow United Nations restrictions on dealing with some Tehran’s banks and companies. Russian companies in Iran were limited by the country’s isolation from the international financial system
Before sanctions TMK was a major supplier of pipes to Iran’s oil industry. The company had even built a plant in Volgograd in southern Russia, where it loaded pipes onto barges and shipped them down the Volga River into the Caspian Sea and over into Iran.
“Our pipe is already very well known in Iran,” said Mr. Shmatovich, whose company is also a major supplier of pipes to the U.S. oil industry and to energy companies world-wide.
TMK isn’t the only major company from Russia’s oil sector ramping up its efforts to return to Iran.
Russia’s second-largest oil company Lukoil and Russian state-controlled gas giant Gazprom have been in talks with Iranian oil officials to re-enter the country and expand their presence there. Earlier this year, Lukoil signed a deal with Iran on two exploration projects in the southwest of the country.
Russia and Iran already had long-standing diplomatic and military ties. But economic links between the two countries deepened after restrictions on Tehran tightened during the presidency of hard-line Mahmoud Ahmadinejad.
Source : wsj.com