Iran’s interest in entering the domestic refined oil products market remains powerful, an issue addressed at the new appointments between NIOC personnel and senior executives of HEP last Friday in Tehran.
The Iranian interest extends beyond oil fields to natural gas, with a proposal to participate in the new terminal construction project in Alexandroupolis, but also for the acquisition of DESFA in case the sale to Socar option goes sour and a competition for its sale is re-announced.
At the same time, with the main objective being the increase of oil production to pre-embargo levels, shielding the country in terms of motor fuel availability and the possibility of promoting products in Europe remain top priorities for Iran, ensuring a base in a European country to any future exclusion, as the geopolitical level in the region remains uncertain.
For this reason, it is anxiously seeking access to refineries on European territory and apart from Greece it has reached out to other European countries, such as Spain.
NIOC’s original plan to participate in HEP's capital share seems to have run aground because of the different approach of the two main shareholders, namely the State and the Latsis Group. Iran, however, came back, putting on the table two new projects. The first concerns the participation of the Thessaloniki refinery Hellenic Petroleum and the second to build a new autonomous refinery plant in Komotini. Hellenic Petroleum, which launched last January a new strategic partnership with NIOC in crude supply, did not close the "door" to the Thessaloniki refinery, which at the moment operates with marginal profit and needs upgrading.
During the following discussions however, a series of technical problems appeared, which are to be evaluated by the Iranian side, who, however, appears prepared to fully cover the funding to upgrade the refinery. Iran should, for example, evaluate whether the limited capacity of the Thessaloniki plant (3 million barrels per day) can meet the needs in fuel, as well as the fact that the refinery cannot operate with one type of crude.
The second alternative plan, which was proposed to the Greek side provides for the construction of a new refinery in the region of Komotini, with the Greek side appearing to be open to discussion.