German Engineering Giant Sees Opportunity in New Iran Market

EghtesadOnline: Iran has ample opportunities for investment in the oil, gas and petrochemical sectors and Siemens is looking to diversify its presence in the energy-rich country, says senior executive of the German electronics and engineering giant.

News ID: ۷۳۹۵۵۷

01 February 2017

"There is vast scope for cooperation and investment in Iran's petroleum industry, particularly in petrochemical projects," Matthew Chinn, managing director of the Energy Sector, UK and Northwest Europe at Siemens Plc, was quoted as saying on the sidelines of an oil conference in Tehran on Tuesday, the news website eqtesadonline.com reported.

The official spoke of Siemens' willingness to collaborate with Iranian companies and said, "Siemens manufactures products and equipment in 52 countries. We look forward to using the potential of Iranian companies."

Siemens has taken meaningful steps to expand its foothold in Iran's energy market following the lifting of international sanctions last year, according to Financial Tribune.

The company sealed a deal last year to deliver 20 F-Class turbines and also share turbine manufacturing knowhow.

It shipped the first of its high quality gas turbines for a power project in Bandar Abbas in September, six months after signing an agreement with MAPNA Group, an Iranian engineering and construction conglomerate.

The Munich-based conglomerate also said last month that it has received a major order from Iran's Hampa Engineering Corporation for 12 compressor trains to be used in two onshore gas processing plants. Mohsen Nayebzadeh, CEO of Siemens in Iran, described the deal as the "first huge oil and gas order" of Siemens since the easing of sanctions.

"Iran should be part of our supply chain … We need to create added value in countries where we run operations," Chinn was cited as saying on Tuesday.

Siemens released a batch of blocked Iranian oil equipment in February last year, barely a month after the easing of sanctions, in a goodwill gesture that conveyed its determination for rekindling ties with Tehran.

Siemens stopped doing new business with Iran in 2010, albeit reluctantly, under pressure from the US, due to the nuclear sanctions, but reportedly maintained some operations that did not violate the sanctions. It maintained an office in Tehran throughout the sanctions regime.

International financial and trade restrictions were eased in January last year following a historic deal between Iran and the six world powers (the five permanent members of the United Nations Security Council plus Germany) in July 2015 to place curbs on Iran's nuclear activities in return for the lifting of sanctions.

The lifting of sanctions allowed Iran to open up its gateways to foreign investment in a bid to gradually invigorate its depressed economy and energy sectors after years of underinvestment and limited trade.