TEHRAN – Oil Industry Expert Reza Mokhtar believes developing petro-refineries is a necessity for completing the oil industry value chain, IRIB reported.

“Our road map in the oil industry should be, first of all, to solve the energy imbalance, and then, to build petro-refineries. Of course, by using the equipment of the current petrochemical complexes and refineries and turning them into petro-refineries,” Mokhtar said.

Underlining the importance of completing the value chain in the oil industry, the scholar said: “As we move towards the completion of the value chain, the number of products with high added value increases and, as a result, we become more invulnerable to sanctions. In the current situation, as the country’s legislators have also determined, it is very necessary to move towards completing the value chain.”

Back in February, Iran’s Deputy Oil Minister for Planning Affairs said constructing petro-refineries across Iran is going to increase the country’s refining capacity by 30 percent, which is from 2.3 million barrels to 3.0 million barrels.

“Creating capacity and completing the value chain in the oil industry is one of the most important priorities of the Oil Ministry in the 13th government with the aim of preventing crude sales and creating added value for the country,” Houshang Falahatian said.

International energy companies predict that the demand for petrochemical products will increase significantly in the coming years, and therefore the development of petro-refineries seems a necessity in Iran.

Due to the country's benefit from oil and gas resources, the development of petro-refineries is much easier and relatively cheaper in Iran than other countries in the world, and the country can play a role in regulating the price of petrochemical products in the world due to its proximity to energy sources and its capacity for the development of petro-refinery.

And most importantly, if the country's petro-refinery capacity can be expanded to the level of crude oil feed produced in the country, the sanctions on Iran’s oil industry will be practically nullified.

It is why Iran is now serious and determined to develop its petro-refineries, although in previous years, despite the country’s upstream economic plans based on preventing the sale of crude oil and natural gas, and developing refining capacity instead to boost production of export products, there seemed to be no will to build petro-refineries.

In order to encourage the government and investors to work hard on the development of petro-refinery industry, the Petro-Refinery Development Law was drafted in the Iranian calendar year 1398 (March 2019-March 2020), and then amendments to this law were drafted in the parliament in January 2022.

EF/MA