After Setting Preconditions:

Germans Clinch Lucrative Deals in Tehran

Date: 03 October 2016 - 20:38

News ID: ۳۱۹۵۹

TEHRAN (Dispatches) -- Germany's Siemens signed a contract to upgrade Iran's railway network on Monday, one of several deals agreed by German firms during a two-day visit to Tehran by Economy Minister Sigmar Gabriel.
Gabriel has flown to Iran with a planeful of 120 managers who are keen to re-establish business relations with the Islamic Republic after it reached a landmark nuclear deal with world powers last year.
Siemens said it will supply components for 50 diesel-electric locomotives to Iran. It did not disclose the value of the contract, but based on comparable deals, it could be in the low hundreds of millions of euros.
The economy ministry said several firms from the Mittelstand, the small-to-medium-sized companies that form the backbone of the economy, had also signed deals with Iranian partners. These included SMS group, a builder of steelmaking plants, and INTRA industrial solutions.
In addition, Mitsubishi Germany has signed a contract to modernize a gas-fired plant, while plant constructor Keller HCW wants to build a brickyard in Iran, it said. Both countries' central banks have also agreed to technical cooperation.
There was no detail on the size of the agreed deals.
Iran's Deputy Economy Minister Muhammad Khazaei said earlier that 10 economic agreements would be signed on the sidelines of Gabriel's visit. "I hope that this will smooth the way between both countries," he said.
Germany, which has commercial and cultural ties with Iran that go back to the 19th century, was for decades a major trading partner of Tehran before the sanctions allowed China and several other nations to overtake it.
While industrial firms such as Siemens are keen to benefit from opportunities in Iran, Gabriel has warned Tehran that to normalize ties it must recognize Israel and stop supporting the Syrian fight against foreign-backed terrorists.
The German banking sector has been reluctant to underwrite business deals for fear of falling foul of remaining U.S. sanctions imposed on Iran.
Gabriel said earlier that Germany promised to remind the United States of its commitment to reduce sanctions against Iran.
He also said that Iran was a reliable credit partner that kept agreements as a rule.
German exports to Iran jumped 15% in the first half of the year to 1.13 billion euros and could reach 4 billion euros in the full year, said Michael Tockuss, head of the Hamburg-based German-Iranian Chamber of Commerce.
Meanwhile, Iran's Mehr news agency said the country has sold fuel condensate to BP and another firm for the first time since last year's landmark nuclear deal.
The Monday report quoted Mohsen Qamsari, the director of international affairs at the National Iranian Oil Company (NIOC), as saying "a cargo of one million barrels of condensate, based on a spot contract, was delivered to British Petroleum."
He did not identify the second company or the amount of condensate it purchased.
Qamsari added that Iran is also negotiating to sell crude to British companies.
In June, Royal Dutch Shell bought its first consignment of crude from Iran since sanctions were lifted in January under the nuclear deal.
Malaysia’s state-owned oil and gas company Pertamina is also conducting a feasibility study on two Iranian oil fields as part of the company’s efforts to boost production.
"We now have a data room with them for evaluation purposes, so we can assess the value and other things," Pertamina president director Dwi Soetjipto told reporters at the State Palace in Jakarta on Monday.
In August, Pertamina had signed a memorandum of understanding with NIOC in Tehran, marking the beginning of the six-month study on the two oil fields, namely Ab-Teymour and Mansouri. The latter consists of the Asmari and Bangestan reservoirs.
The two onshore fields have a combined production rate of 74,500 barrels of oil per day (bpd) and reserves of more than 5 million barrels.
Once the six-month assessment of NIOC's data on the two fields is completed, Pertamina plans to submit a preliminary proposal on how to develop the assets.