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Oil, Gas, Petrochemical and Energy Field Specialized Channel
Oil, Gas, Petrochemical and Energy Field Specialized Channel
Oil, Gas, Petrochemical and Energy Field Specialized Channel

Practical move to stop sale of raw materials

مقاله مهندس سیدعماد حسینی

The fact that the unwelcome guests that took the helm of the Petroleum Ministry – during the terms of the 9th and 10th governments – were unfamiliar with the very basic principles of management and the strategic petroleum industry has had irreparable consequences for the country.

The tragic tale involving the development of South Pars gas field, controversial handovers, collapse of cohesion in the petrochemical industry, the controversies surrounding the oil swap, the dismal state of plans to optimize refineries and boost production, production of gasoline in petrochemical facilities, and many others, are part of what is today described as “intention” to wreak havoc on the Iranian oil industry in the past.

The once-abandoned plan to set up the Persian Gulf Star gas condensate refinery with a capacity of 35.55 million barrels is another cause for concern. The then oil minister had said that construction of the facility had the blessing of the Supreme Leader. Although the project posted progress and orders were placed for the equipment it needed, with the reelection of the president and the rise to power of the 10th government, the project fell by the wayside.

Concerns about the decline in the exports of gas condensates, which accounted for a considerable portion of non-oil exports, slowed down the construction of the largest and most modern refinery in the Middle East whose feedstock happened to be gas condensates.

The drop in oil prices and Iran's limited crude exports in recent years have taken a toll on the economy and knocked the wheels of the industry off balance. The inflationary recession sparked by these limits coupled with managerial indiscretions and the generosity of the 9th and 10th governments in splashing out some $800 billion in oil revenues prompted senior officials of the establishment to sound the wake-up call for the country. The 11th government and several more administrations to come are bound to inherit this legacy of disarray.  

Failure to keep the goals of the 20-year Outlook Plan and disregard for macro-policies of the establishment, including the provisions of the Fourth and Fifth Development Plans, were evident since the start of the cash subsidies scheme. Failure to heed the viewpoints of experts became a signature of officials with the 9th and 10th governments who were elated by astronomical oil revenues.

What makes oil industry experts and pundits doubly sad today is that the same officials ignored the development of upstream and downstream industries, including plans to optimize the industry, boost production capacity and build new refineries which, ironically, happened to be a major monetary source for the 10th government to dispense the monthly cash subsidies.

The imminent inauguration of the Persian Gulf Star Refinery, a megaproject originally designed to be completed in three years and not more than a decade, is bound to realize the dream of cutting dependence on gasoline imports and exporting more oil products.

The costly, unwise decision of those unwanted guests to put gas condensates on the list of non-oil exports in a bid to produce impressive figures simply pushed up the sales of raw materials. In that process, some consignments ended up in nondescript facilities and were associated with individuals such as Babak Zanjani.

With the adoption of a wise approach intended to produce synergy between the shareholders of the Persian Gulf Star Refinery, practical measures will soon be taken to implement the principles of the Resistance-based Economy, achieve a drop in the sales of raw materials, and take steps toward the use of natural resources to create wealth for the current and future generations alike.