Sat, 01 Aug 2015


By Dalga Khatinoglu
Three Iranian delegations in progressive science and technology, banking, and oil will visit Indonesia to boost bilateral cooperation in the post sanctions era.

Expectations are for the sanctions imposed on Iran to be lifted by the end of current year, and European delegations, headed by top officials, have been visiting Iran intensively.

A German delegation visited Iran last week, while delegations from France, Italy, Austria, UK and Poland are to visit this country to discuss economic ties in coming weeks.

IRNA quoted Fortuna Anwar, the senior adviser to Indonesian Vice President Jusuf Kalla Dewi on July 31, saying that the first Iranian delegation will visit this country to negotiate in the oil sector. The agency also quoted Iran's ambassador to Jakarta Valiollah Mohammadi as saying that a delegation from the Central Bank of Iran also will visit Indonesia soon.

Iran's president kicked off his trip to Indonesia on April 21 to attend a ceremony marking the 60th anniversary of the Asia Africa Conference. Just a year ago, Iran announced that it was preparing to build five refineries in Indonesia, aimed to diversify Iran's oil export.

The head of Iran’s Oil, Gas and Petrochemical Products Exporters Union said last April that Iran would build a heavy oil refinery with a daily production capacity of 150,000 barrels of crude oil in addition to five smaller refineries with daily production capacities of 30,000 to 50,000 barrels of gas condensates in Indonesia. The total refining capacity of 300,000 barrels per day would be fed by Iranian crude oil and gas condensate.

Almost all of Iran's crude oil export goes to Asian markets: including China, India, Japan and South Korea.

Iran's oil export has decreased from 2.5 million barrels per day (mb/d) in 2011 to about 1.1 mb/d currently due to western sanctions. However, in the light of rising hopes of resolving Iran's nuclear dispute through negotiations, Iran is preparing to boost its oil production and export.

Iranian oil firm Nakhle Barani Pardis and Indonesia's PT Kreasindo signed a $3 billion agreement last February for the construction of six refineries. Nakhle Barani Pardis has reportedly accepted to finance 30 percent of the refinery to be built at Banten or another location in West Java. Iran's Press TV reported then that the projects were set to start in 2015 and would take an estimated three years to complete.

However, during Rouhani's visit to Indonesia to take part in the 5-day conference, the country's Oil Minister Bijan Namdar Zanganeh didn't accompany him. Despite this huge project, which creates opportunity for Iran to increase its oil export as well as benefits from a country that relies on one third of its needed liquid fuels from imports.

A strong economy, population growth, and continued state subsidy for fuels have worked together to push domestic oil demand beyond supply in Indonesia.