Companies rush to Iran as sanctions are lifted
Jan 30 (Reuters) – Major international companies are rushing to establish a position in Iran as the Islamic Republic re-opens for business after the lifting of international sanctions.
So far, deals worth a total of at least $37 billion have been announced in sectors such as construction, aviation and car manufacturing. Companies include Europe’s Airbus, French car maker Peugeot and Italian steel firm Danieli.
Dozens more have said that they are in talks or have signed provisional agreements with Iranian partners.
With a population of 80 million and annual output of some $400 billion, Iran is the biggest economy to rejoin the global trading system since the Soviet Union broke up over two decades ago.
Iran has agreed to buy 118 Airbus jets worth $27 billion at list prices, including a dozen A380 superjumbos. The planemaker said the deal was conditional on getting U.S. export licenses because more than 10 percent of Airbus jetliner parts come from the United States.
Italian infrastructure company Condotte d’Acqua said on Monday it would sign agreements for projects with Iranian companies worth as much as 4 billion euros ($4.3 billion), a company spokesman said.
Italy’s Danieli & C Officine Meccaniche signed a joint venture and agreed orders worth in total about 5.7 billion euros. The venture "Persian Metallics," with an estimated worth of 2 billion euros, involves a group of international and Iranian investors.
Other agreements relating to supply of machines and plants to produce steel and aluminum to be signed with Iranian companies are worth about 3.7 billion euros, the company said.
Greece’s biggest oil refiner Hellenic Petroleum agreed on Friday to buy crude oil from the National Iranian Oil Company (NIOC), the first European refiner to restart trade relations with Iran after the lifting of international sanctions. The company had been a major buyer of Iranian crude before sanctions were imposed.
China’s Norinco International Cooperation Ltd said on Wednesday its consortium had signed an agreement for a railway project in Iran for 2.3 billion yuan ($350 million).
The French car maker and Iran Khodro have announced a 50/50 joint venture to build Peugeot cars in Iran. Peugeot says venture could invest 400 million euros in production, research and development in the next five years.
China’s Sinosteel Engineering & Technology Co said one of its units has signed a contract worth 3.1 billion yuan ($471 million) with Iran’s Bafgh Kasra.
MEMORANDUM SIGNED OR IN TALKS:
Alstom has signed a memorandum of understanding for the development of mainline and urban transport in Iran, the company said on Friday.
The Volkswagen-owned German carmaker said its representatives had traveled to Iran for talks with possible importers, seeing growing potential for luxury car sales.
Swiss automotive supplier Autoneum is in talks with French carmakers Renault and <PSA PEUP.PA> about cooperating on potential business in Iran, the Swiss paper Handelszeitung quoted its chief executive as saying on Thursday.
Swiss machinery maker Bucher expects sizeable new orders from Iran within months, its chief executive said. Revenue from pent-up demand in Iran could potentially top the 20 million to 30 million Swiss francs ($20-30 million) his firm reaped there annually before sanctions, he said.
Commerzbank, Germany’s number two lender, said it was considering the possibility of returning to Iran, less than a year after agreeing to pay $1.45 billion to U.S. authorities for violating sanctions.
Daimler said its trucks division had signed letters of intent with joint venture partners in Iran as part of the German company’s re-entry into the country.
Herrenknecht, a German tunneling company which helped build the Tehran metro in the 1990s, is ready to bid for projects in Iran, said the company’s chairman. He plans to travel to Iran in the next two months to talk to former business partners.
INTERNATIONAL AIRLINES GROUP
British Airways, part of IAG, hopes to start flying to Tehran in the near future, said the airline group’s chief executive on Monday.
Top management of Russia’s oil major Lukoil visited Iran and reached an agreement on the firm’s possible participation in several oil projects in the Islamic Republic, Russian Deputy Energy Minister Anatoly Yanovsky said on Friday.
NATIONAL ALUMINIUM CO
India’s state-run National Aluminium Co Ltd (NALCO) is interested in setting up a $2 billion smelter complex in Iran, its chairman said, and will send a team of experts there to explore the opportunity.
An Omani sovereign wealth fund has signed an understanding with Iran Khodro to study a proposal for a $200 million auto plant in Oman, a fund official said on Wednesday.
South Korea’s POSCO plans to sign a preliminary agreement with Iranian steelmaker PKP in March to buy a stake in a $1.6 billion steel mill project, a source with knowledge of the matter said on Wednesday.
Italy’s Saipem signed a memorandum of understanding on Monday to cooperate on major oil and gas projects in Iran. Controlled by Eni and Italian state lender fund FSI, Saipem said the MoU had been signed with the Parsian Oil & Gas Development Co and involved the revamping and upgrading of the Pars Shiraz and Tabriz refineries.
It gave no financial details.
OTHER ITALIAN FIRMS
Ansaldo Energia, Fincantieri, and Itinera also signed deals with various Iranian companies in front of reporters on Monday. Not all the details were given.
The following day, the international arm of Telecom Italia Group, Ti Sparkle, said it had signed a MoU with an Iranian telecom firm.
Italian state railways said Ferrovie dello Stato (FS) will provide technical assistance for the construction of a high speed line and the electrification of another. No terms or conditions were revealed.
The world’s biggest oilfield services company Schlumberger is in talks to buy back its former Iranianian unit, the managing director of ex-subsidiary Well Services of Iran was cited as saying in the Wall Street Journal.
Turkey’s largest mobile operator Turkcell is looking for deals to enter the Iranian market and is in touch with the country’s fixed line and mobile operators, its chief executive said.
Zurich Insurance said it would look into insurance cover for corporate customers doing business with Iran.