Iran's Oil Ministry Will Buy Equipment From Domestic Firms

EghtesadOnline: Domestic contractors are poised to sign two agreements, worth $1 billion, with the Oil Ministry to manufacture equipment for the petroleum sector.

News ID: ۷۴۰۸۹۵

12 April 2017

Habibollah Bitaraf, deputy oil minister for research and technology, said the deals will extend the total number of contracts between the Oil Ministry and domestic companies for producing oil equipment to 54, Shana reported on Monday. The value of contracts signed so far is estimated at $343 million. The official did not elaborate on the new deals, name of companies or when they would be signed.

"Expanding domestic production capacity is the ministry's priority," Bitaraf said.

The ministry has taken measures to boost domestic manufacturing of oil equipment in an effort to curb capital outflows for imports. In 2014, a committee was set up by Oil Minister Bijan Namdar Zanganeh to pursue the production of 10 major categories of equipment for the key oil and gas sector, including turbines, pipes and compressors, Financial Tribune reported.

"Domestic companies will accelerate the import of advanced technology for manufacturing equipment by partnering with international companies," Bitaraf said.

Iran was deprived of advanced technology and equipment to develop its oil and gas sector after the tightening of international restrictions in 2011 and 2012 that ostensibly targeted Tehran’s nuclear program but significantly undermined its oil exports, foreign trade and banking relations.

Iran also wants to expand the production of a variety of equipment, such as control valves, pipes, rotating machines (turbines and compressors), smart pigs used in cleaning pipes, oil and gas measurement tools as well as equipment associated with health and safety.