Calendar Year
The Iranian year relates to the Prophet Mohammed's flight from Mecca. So the Iranian year is the Gregorian year less 621: the year 2015 is the Iranian year 1394. The government's fiscal year starts on 21st March.
Working Week
The working week is Saturday to Thursday 12pm. Ministries are closed on Thursday. Normal working hours for government offices are 8am to 2pm. Banking hours are generally, Saturday to Wednesday, 7.30am to 1.30pm. Thursday working hours are 7.30am to 12.30pm. Generally shops and bazaars are open 8.30am to 8.30pm, except on Friday.
Business Etiquette
In public, a hand-shake is normal in greetings between men or between women but never between men and women. Social conversation is desirable before business discussions begin. Tea and cakes or fruit should be taken when offered in meetings, but should be declined in the unlikely event that it is offered during Ramadan.
The Constitution and Government
Iran became an Islamic republic in 1979, following the revolution.
The constitution provides for a religious leader; the Supreme Leader, appointed by an Assembly of Experts for life , and a President; the head of government, elected every four years for a maximum of two terms. The Supreme Leader is Ayatollah Ali Khamenei.
President Hassan Rouhani, took the oath of office in August 2013.
A 290 member Majlis, or parliament, passes legislation, which must be approved by the Guardian Council, an appointed body of clergy and legal experts. In the event that the Majlis and Guardian Council do not agree, another body, the Expediency Council, determines the disputed aspects of legislation. In recent times, disputes have largely centred around the power balance between the Majlis and Presidency as well as the extent and pace of modernization and management of the Iranian Economy.
The constitution guides the administration of economic and financial affairs of Iran and envisages the state, cooperative and private sectors of the economy. The private sector is growing. About a quarter of the private sector and a fifth of national GDP is controlled by the Bonayds, religious charitable foundations first established in 1980 to supervise the deposed Shah's assets.
President Khatami (1997-2005) initiated a reformist program encouraging a greater economic openness and privatisation within the economy. The Third Five-Year Plan (2000-2004) aimed to reduce the government role in the economy by, for example, allowing private investment in certain sectors such as mining and financial services. Additionally the environment for foreign investors was improved when the Law for Promotion and Protection of Foreign Investments was passed in June 2002. Click here for more information..
The Fourth Five-Year Plan (2005-2010) set ambitious targets for the development of the energy and minerals sectors, the renovation and modernisation of Iranian industry and the development of non-oil exports. In recent years the Government has sought to enact further privatisation and liberalising reforms, aiming to privatise 20% of state-owned industries per annum as part of the Fifth Five-Year Plan (2011-2016.)
The Government Heads
Ali Khamenei, Supreme Leader
Hassan Rouhani, President
Ali Larijani, Speaker of Majlis
Sadeq Larijani, Head of the Judiciary Branch
Ahmad Jannati, Secretary of the Guardian Council
Akbar Hashemi Rafsanjani, Chairman of the Expediency Discernment Council.
Mohammad Yazdii, Chairman of the Assembly of Experts.
The Cabinet
Es'haq Jahangiri, First Vice President
Mohammad Nahavandian, Head of Presidential Office and Chief of Staff
Mohammad Shariatmadari, Vice President for Executive Affairs
Mohammad Bagher Nobakht, Vice President and Head of Management and Planning Organisation of Iran
Elham Amin-Zadeh, Vice President for Legal Affairs
Majead Ansari, Vice President for Legal and Parliamentary Affairs
Sorena Sattari, Vice President for Science and Technology Affairs
Shahindokht Molaverdi, Vice President for Women and Family Affairs
Masoud Soltanifar, Head of Cultural Heritage and Tourism Organisation
Ali Akbar Salehi, Vice President and Head of Atomic Energy Organisation
Seyed Mohammad-Ali Shahidi, Vice President and Head of Martyrs and Self Sacrifice's Affairs Foundation
Masoumeh Ebtekar, Vice President and Head of Environmental Protection Organisation
Ali Asghar Fani, Minister of Education
Mahmoud Vaezi, Minister of Communication and Information Technology
Mahmoud Alavi, Minister of Intelligence
Ali Tayebnia, Minister of Economy
Mohammad Javad Zarif, Minister of Foreign Affairs
Hassan Quzizadeh Hashemi, Minister of Health
Ali Rabiei, Minister of Labour, Cooperative, Welfare
Mahmoud Hojjati, Minister of Agricultural
Mostafa Pour-Mohammadi, Minister of Justice
Hossein Dehqan, Minister of Defence
Abbas Ahmad Akhoundi, Minister of Road and Urban Development
Mohammad Reza Ne'matzadeh, Minister of Industry, Mine and Trade
Ali Jannati, Minister of Culture and Islamic Guidance
Abdolreza Rahmani Fazli, Minister of Interior
Mohammad Farhadi, Minister of Science, Research, and Technology
Bijan Namdar Zanganeh, Minister of Oil
Hamid Chitchian, Minister of Energy
Mahmoud Goudarzi, Minister of Sport and Youth
Other Political Figures
Mohammad-Reza Bahonar, First Deputy Speaker of Majlis
Masoud Mir Kazemi, Second Deputy Speaker of Majlis
Brigadier General Hossein Ashtari, Commander of Police
Marziyeh Afkham, Spokeswoman of the Ministry of Foreign Affairs
Mehdi Chamran, Chairman of the City Council of Tehran
Reza Najafi, Representative to the International Atomic Energy Agency
Ali Shamkhani, Secretary of the Supreme National Security Council
Mohammad Bagher Ghalibaf, Mayor of Tehran
Valiollah Seif, Governor of Central Bank
Oil
Iran relies heavily on oil exports. About 75% of export income derives from the sale of oil and half the government budget is represented by oil sales though efforts have been attempted to alter this trend in recent years. Oil income has grown over the last decade rising from US$32 billion in 2004 to US$77 billion in 2009. However, the development of the sector is heavily constrained by US sanctions which prohibit American companies from developments in the oil industry. Recent International sanctions have proved particularly damaging for the Iranian government with Oil revenue estimated to have more than halved by some estimates since coordinated sanctions were enforced on 1 July 2012.
The Ministry of Petroleum (MoP), which has overall responsibility for the energy sector, has four autonomous subsidiaries reporting to it:
National Iranian Oil Company (NIOC) for oil and gas exploration, production and oil transport.
National Iranian Gas Company (NIGC) for gathering treating, processing, transmission, distribution and export of gas and gas liquids.
National Iranian Petrochemical Company (NPC) for petrochemical production, distribution and exports.
National Iranian oil Refining and Distribution Company (NIORDC).
Other national oil sector companies include:
National Iranian Offshore oil Company (IOOC) manages offshore oil fields in the Persian Gulf.
National Iranian South Oil Fields Company (NIOC South) manages onshore oilfields in southern Iran.
Pars Oil and gas Company (POGC) is responsible for offshore North and South Pars gas fields.
Khazar Exploration & Production Company is responsible for the Caspian Sea developments.
National Iranian Tanker Company (NITC) manages Iran's tanker fleet.
Iran has 137.01 billion barrels of proven oil reserves - that is about 10% of world proven reserves. The majority of the reserves are in huge onshore fields in Khuzestan province in south west Iran.
There are 40 producing fields - 27 onshore and 13 offshore - producing generally medium sulphur crude. Although, in 1974, production was 6 million bbl/d, total production for August 2012 is estimated at around 3.2 million bbl/d, about 5% of world production.
Domestic consumption in Iran has risen dramatically since 1980 when extensive subsidies for fuel were introduced. In 2010 domestic fuel consumption stood at 1.845 million barrels of Oil a day, however, recent measures to reform the subsidy system begun to reverse this trend. Notably as of October 2011 fuel consumption is recorded to have fallen by between 4% and 19%. Decline + Recovery rates
Existing fields, which have natural decline rates of 8% onshore and 10% offshore, need upgrading and enhanced oil recovery techniques (EOR) are needed. Current recovery rates are about 25%, compared with a world average of 35%. Iran also needs to increase the search for new oil and 17 blocks have been tendered. Sufficient investment could significantly increase capacity.
Oil Swaps
Regional priorities have led to a programme of oil swaps. Caspian oil (mainly from Turkmenistan and Kazakhstan) is delivered to northern Iran, through the port of Neka, and Iranian oil is exported through Persian Gulf terminals. In 2006, swaps amounted to over 120,000 bbl/d; 40,000 bbl/d going to Tehran and the balance to Tebriz. Estimates have placed the value of these swap deals at some $146 million between 1997 and 2011 which have continued, despite pressure from international sanctions at rates of 20,000 barrels per day according to official figures from the NIOC. Oil swaps with Caspian littoral states were briefly suspended between April 2010 and 2 July 2011, halting 13 years of fuel exchange.
The present pipeline capacity to Tehran is 180,000 bbl/d and there are plans to approximately double then triple this. In 2005, an Iran/Iraq MoU envisaged swap arrangements and the construction of a 24 mile, 350,000 bbl/d oil pipe line from Basra to the Abadan refinery. The swap was to be Iraqi oil for Iranian refined products; also Iraq could export oil through Kharg Island and import refined products through Bandar Mahshahr. The difficulties with this agreement relate to the inability of Abadan to refine significant quantities of Basrah Light and the shortfall in Iran's domestic gasoline supplies. In June 2010 Iranian export of oil products to Iraq and Afghanistan totalled some 172 million litres, with fresh talks for energy swaps from Iraq announced by Iranian Oil Minister Rostam Qassemi on 29 August 2012.
Export Locus
Exports are through four main terminals: Kharg Island (the largest), Lavan Island, Sirri Island and Ras Bahregan. Refined products are exported through Abadan and Bandar Mahshahr. The damage to these terminals in the war with Iraq has been fully repaired.
Through NITC, Iran operates OPEC's largest tanker fleet, some 43 vessels, including 27 Very Large Crude Carriers (VLCCs) each with a storage capacity of 2 million barrels.
Fields + Developments
NIOC's onshore field development concentrates on sustaining output levels from large ageing fields through EOR projects: over half or Iran's oil production comes from fields which are more than 40 years old.
The Azadegan field, the largest discovery for many years, was made in 1999: it is estimated to have 26 billion barrels of crude. From January 2009 the Iranian government has agreed to develop the field in partnership with the National Petroleum Company of China which has purchased 70% of NIOC shares in the South Azadegan project and invested $180 million for an early production plan of the oilfield. A joint investment of $12 bn was announced by PEDEC Oil Minister Naji Sa'Douni in August 2011 which he intended to add some 600,000 barrels a day to the country's daily output.
In 2001 NIOC discovered a similarly large field, called Dasht-e-Abadan. Other NIOC discoveries include Darkhovin onshore field, near Abadan, currently in its third phase of development a result of a $1.6 billion contract between the NIOC and a consortium of Iranian investors. Estimates place the field's reserves at over 5 million barrels with the project aiming at a production rate of 71,000 barrels of crude a day.
Another discovery is the Anaran field in Western Iran which was discovered by Norsk Hydro: it contains reserves of 2 billion barrels. The anaran block consists of of two large Oil fields; Changooleh and Azar expected to produce some 67,000bbl/d and 68,000bbl/d respectively.
Yet another large development prospect is the Yardavaran field, which has reserves of up to 17 billion barrels. On December 2007 a Chinese company Sinopec signed a final agreement with NIOC giving the group a 51% stake in the field's development. Sinopec has so far successfully achieved its 16 month target of 16,000 bbl/d and aims to reach production of 300,000 bbl/d by the third phase of the field's development.
The largest crude oil storage facility is at Kharg Island with a capacity of 12 million barrels, where an expansion programme to 22 million barrels has begun. In addition to a number of other smaller tanks around the country, the Iranian government recently held talks in March 2012 with Russian energy giant Gazporm about constructing an underground gas storage facility near Tehran.
The bulk of off-shore production is in Doroud 1&2, Salman, Abuzar, Foroozan and Sirri fields; all of which are being extended. In 2002 Shell began developing the Soroush-Nowruz field, near Kharg Island, with estimated recoverable reserves of 1 billion barrels of heavy oil. Difficult to market, some of this oil is blended with South Pars condensate for domestic consumption.
Caspian Sea Fields
The Caspian Sea represents a potential for off-shore development, but no agreement has been reached between the littoral states. Iran wants either the sea to be used in common or it to be divided equally: the other states favour an equidistant method of dividing the seabed, which would give Iran 12% of the Sea.
A considerable development occurred in 2012 with the discovery of deposits of an estimated 10 billion barrels of crude within the Caspian Sea. The strike is Iran's first oil discovery in the Caspian for 104 years however questions remain as to whether Iran has the technology to develop it. The Caspian basin may hold up to 17 billion to 33 billion barrels of oil compared with the North Sea's 17 billion, the Iranian oil ministry news website Shana has said in 2009.
Refinery
Iran has a combined refinery capacity of 1.86 million bbl/d (2009): major refineries are located at, Abadan, Isfahan, Bandar Abbas, Tehran, Arak and Tabriz. Iran plans to expand refinery capacity by1 million bbl/d by March 2016. Iran has expanded its refining capacity during the past few years and plans to increase the production of gasoline and gasoil production capacity through the completion of nine on-going developments at is oil refineries including those of Abadan, Tabriz, Isfahan and Bandar Abbas.
Investment + Buybacks
The Iranian constitution prohibits the granting of petroleum rights through concessions or direct equity basis to foreign companies, but permits foreign involvement through Buyback contracts.
Buybacks are arrangements by which the foreign entity funds field investments and is remunerated in the form of an allocated production share. Field operations are returned to NIOC after a stipulated number of years, at which point the contract is terminated. The first major Buybacks became operational in 1998 and 1999 for the Sirri A and E fields, where Total is the operator. Total and ENI were operators of two other fields, Doroud and Balal. Some NIOC subsidiaries have been awarded Buyback contracts. Cepsa and OMV withdrew from the Cheshmeh-Khosh contract because of disagreement over development costs and Buyback terms.
Buyback has disadvantages for both sides. NIOC bears the risk if oil prices are low, because it must sell more oil to meet the agreed rates of return (usually between 15-18%) for developers. The developers have no guarantee that they will be permitted to develop and operate discoveries and the short terms of the contracts are consider unfavourable. In recent years the term of contracts has been increased somewhat, but no significant reform of the system has occurred. Foreign involvement in the development of the oil sector has reduced and slowed since 2006 as a result of the extraterritorial effects of US sanctions law on non-American oil and financial sector companies.
Gasoline rationing + consumption
Iran has been importing refined products since 1982 and gasoline has been heavily subsidied by the government. In June 2007, gasoline rationing was introduced to contain the subsidy. The introduction was chaotic with technical difficulties and no arrangements for the supply of excess requirements: rioting and petrol station burning occurred.
Growing measures have been taken in recent years to increase domestic gasoline production, particularly in response to international sanctions aimed at curbing Iranian fuel reserves. In August 2012 Deputy Oil Minister Alireza Zeighami announced the inauguration of the world's largest gasoline refinery at Shazand which as part of four development plans to be announced his year aim to boost gasoline production capacity to 70 million litres per day.
According to official government statistics, Iranian gasoline imports have slumped by as much as 95% over the last four years as a result of rising refinery capacity and lower fuel subsidies which have managed domestic consumption.
Natural Gas
Iran has an estimated 1,046 trillion cubic feet (Tcf) of proven natural gas reserves - the world's second largest reserves after Russia. Over two thirds of reserves are in non-associated fields and have not been developed: the major fields are, South Pars (by far the largest with 280-500 Tcf), Kish, North Pars and Golshan. Iran has stopped drilling in the Dorra natural gas field as a result of a border dispute with Kuwait and Saudi Arabia.
In 2010, had marketed production of 5.2 Tcf and consumed 5.1 Tcf of gas, increasing by some 550% over the last two decades. Natural gas accounts for almost half of Iran's total domestic energy consumption, however the price of gas is controlled and subsidized to residential and industrial consumers. Although domestic demand is growing rapidly, Iran has the potential to be a significant exporter.
South Pars Field
Iran's largest energy project is the development of the South Pars natural gas field, which was first discovered in 1988 and is an extension of Qatar's 900 Tcf North Field. In addition to gas the field contains some 17 billion barrels of liquid reserves. The MoP estimates that earnings from South Pars could be as much as US$40 billion per year over 30 years. Although it has attracted some US$15 billion of investment interest, development has been delayed by technical matters (high sulphur content), contractual negotiations (controversy over Buyback terms) and international politics (the nuclear dispute).
By 2010 Phases 1-10 were on-stream producing 3.2 Bcf/d of natural gas. A further five phases are due on-stream in 2007 with combined output of 10 Bcf/d. The government aims for 16 Phases to be on-stream by 2010 in order to keep pace with Qatari exploitation, which could run down the reserve base. Development of the various phases could allow marketed natural gas targets of 28.2 Bcf/d to be reached by 2010. One use for production will be reinjection.
Presently South Pars condensate production is a record high of 290 million cubic metres per day and by some estimates could rise to 454 million cubic metres per day following exploitation from new phases including phase 12 and 15 to 18.
The South Pars development plan is phased as follows.
Phase 1. Developed by Petropars, came on-stream in 2004, it produces 900 Mmcf/d of natural gas for domestic consumption, plus 45,000 bbl/d of condensate.
Phase 2 & 3. Developed by a Total-led consortium at a cost of approximately US$2 billion, came on stream in 2002, it produces 2.8 Bcf/d of gas (carried by undersea pipeline to Asaluyeh), plus 80,000 bbl/d of condensate.
Phase 4 & 5. Developed by Eni and Petropars at a cost of US$1.9 billion (including onshore treatment facilities at Bandar Asaluyeh), came on-stream in 2004 and expected by March 2013 to produce 2 Bcf/d of natural gas, 80,000 bbl/d of condensate, plus ethane, sulphur, LPG and petrochemicals.
Phases 6 & 8. Developed by Petropars and Statoil at accost of some US$2.7 billion, came on-stream in 2007, and is estimated to produce 3.9 Bcf/d of gas and 150,000 of condensate. Completion was delayed because of platform and pipeline construction delays.
Phases 9 & 10. Being developed by LG Engineering and Construction Corp (South Korea) was expected to come on-stream in 2007 and to supply 2 Bcf/d of natural gas and 80,000 bbl/d of condensates. While delayed the project is expected to come online within late 2012. In August 2010 the recently completed IGAT-7 pipeline began to take gas from fields at Phases 9 & 10 gas to Assaluyeh, Iranshahr and beyond
Phase 11. In 2009 Tehran agreed a $5 billion contract with CNPC to develop the field at expectations of 2 bcm of natural gas produced a day. Delays in the project as of July 2012 have led the Iranian government to seek new Asian partners.
Phase 12. In 2006 Petropars was awarded the development contract. The structure has 3 Bcf/d of total production for domestic use and 2 Bcf/d for a potential LNG and 120,000 bbl/d of condensate.
Phase 13 Drilling operations are currently underway by the Pars Oil and Gas Company which expects delivery of 50 million cubic metres of purefied natural gas, and 1.1 million cubic metres of LPSG per day.
Phase 14. A consortium of eight Iranian companies have facilitated the beginning of drilling for South Fars gas field phase 14, expected to produce 75,000 barrels of gas condensate per day.
Phases 15 & 16. To be developed by Gorb, an Iranian engineering company, at an estimated cost of some US$2 billion with the expectation of producing 2 Bcf/d of natural gas for domestic use, 133 Mcf/d for LNG export and 80,000 bbl/d of condensate.
Phases 17 & 18. Expect to produce 2 Bcf/d of natural gas for domestic use. A service contact has been awarded to three Iranian companies: IDRO (43%), OIEC (25%) and IOEC (32%). The Economy Council has agreed that the Oil Surplus Fund can be used to fund the project.
Phase 19 development was awarded to OIEC and Petropars. These phases will produce 2 billion cubic feet (57 million cubic metres) per day of natural gas, and 80,000 barrels per day of natural gas condensate.
Phases 20 and 21 development was awarded to OIEC. 2 billion cubic feet (57 million cubic metres) per day of natural gas, 80,000 barrels per day of natural gas condensate, 3,000 tons of LPG per day plus 400 tons of sulfur per day. In May 2008, Repsol and Royal Dutch Shell agreed to exchange block 13 with block 20 or 21
Phases 22, 23 and 24 were awarded to Khatam al-Anbia, Petro Sina Arian and SADRA and are located in the north-eastern frontier of the field. The aim of phases 22, 23 and 24 development is to produce 42.5 million cubic metres (1per day of natural gas, 57,000 barrels per day (9,100 m3/d) of natural gas condensate.
Trade and Investment
Since 2006 the US Administration has renewed efforts to obtain compliance from foreign oil and financial sector companies with US sanctions legislation. This has led foreign companies to withdraw from South Pars developments or to delay further investment and foreign finance to become unavailable. Iran has turned more to its own resources preferring Iranian investors and engineering companies and to moot the establishment of a Pars Investment Fund for the sale of US$3.5 billion of Participation Bonds to fund South pars developments.
Furthermore there is strong competition for LNG customers. Other suppliers, for example Oman, Qatar and UAE, are ahead in contracting with Far Eastern buyers. Also US sanctions limit Iran to non-US liquefaction technology furthermore presently Iran has no LNG facilities.
However potential customers for Iran's natural gas include: Ukraine, Bahrain, India, Pakistan, Armenia, Azerbaijan, Georgia, Taiwan and China. Exports could be either by pipeline or LNG tanker with possible LNG export terminals at Asaluyeh or Kish.
In 2002, Iran and Turkey inaugurated a pipeline link between the two countries, stretching for some 2,577-kilometres.
The project currently supplies an annual import of around 11 billion cubic meters of natural gas from Tabriz to Ankara.
In November 2008, Iran and Turkey signed an agreement reinforcing earlier deals that allow for joint construction of a pipeline from Iran to Turkey that will annually supply up to 35-36 bcm of natural gas to Europe. The November accord, which calls for $3.5 billion in Turkish investment in Iran, also allows Turkey to develop Iran's South Pars gas field in the Persian Gulf.
In 2007 the Iran- Armenia pipeline came on-stream for the sale of 1.3 Tcf of natural gas to Armenia over 20 years.
Such developments are also set to increase, with plans currently underway for the construction of a 365 kilometre pipeline capable of delivering 1.5 million litres of gasoline and diesel daily to the southwestern Armenian town of Yeraskh.
Funding for the pipeline will be provided by both sides, with Armenia allocating USD 100 million to the project, estimated to be completed by 2014. As such, the Iran-Armenia pipeline remains of distinct regional importance and could provide a viable alternative to Russian Gas in transporting "blue fuel" from Iran to European countries.
In October 2004, Iran signed a U$100 billion 25 year contract with Sinopec for the production and export of LNG to China. In 2007, Petro China signed an agreement with NIGC for purchase of 3million tonnes of LNG over 25 years starting in 2011.
In March 2010 in Ankara, Iran and Pakistan signed an agreement on a joint pipeline between the two countries with each side responsible for completing its section by 2014. Under the agreement, Iran will provide about 21.5 million cubic metres of gas a day to Pakistan for 25 years.
Furthermore in recent talks on 9 October 2012, Mubeen Sulat of the Petroleum Institute of Pakistan reiterated the government's commitment to the project, noting that Pakistan has made a great deal of progress with the venture and is approaching the phase of awarding construction contracts.
Mines & Minerals
Iran has huge (in the top ten in the world), largely untapped, mineral resources in: lead, copper, gold, manganese, uranium, chromium, antimony, tin, mica, alum, marble, turquoise, and emeralds. Also fireclay, chalk, lime, gypsum, ochre and kaolin are produced. Mining is largely Iranian owned, but some joint ventures with foreign companies are proceeding, for example, in gold mining.
The Ministry of Industries and Mines is responsible for the development of the industry in Iran and the main state affiliate for doing this is Iranian Mines and Mining Industries and Mines (BIM), which provides funds for the development of the sector. The Geological Survey of Iran (GSI) is responsible for surveying the country for the exploration and evaluation of mineral resources (excluding hydrocarbons).
Between 1997 and 2005, manufacturing and mining exports grew from US$ 1.6 billion to US$4.6 billion, an annual growth rate of 16% and a better performance than expected in the country's third five year economic plan.
More recently in 2011 output of Iron ore from Iranian mines was placed at an estimated 24 million tonnes, with plans for Iran to become self sufficient in steel production by 2016.
Mines in Iran produce a very wide range of output, including: Coal, Lead, Zinc, Copper, Phosphate, Industrial Clay, Salt, Dolomite and Manganese. The majority of mines are located in Khorasan, Kerman, Esfahan and West Azerbaijan.
Investors need to go through a procedure to establish themselves and to begin mining; this includes obtaining an Establishment Licence and an Investment Licence. If the SMC's problem is becoming established I could look into the procedure in more detail, if they explain where they are in the process.
Useful Links: www.min.gov.ir and www.iranmining.com
Financial and Legal
Privatisation has begun in banking. There are four private banks, although they have a small proportion of banking sector assets at present.
Current United States and European Union Banking sanctions have imposed severe restrictions upon any foreign entity engaging with the Iranian banking system, more details of which can be found withinTrade Restrictions.
In December 2004, Iran's credit rating was upgraded (by Fitch ratings) to BB minus, with the outlook on long-term rating as Stable. Since 24 April 2008 however, Fitch has withdrawn from issuing sovereign rating coverage for Iran.
Manufacturing
Steel, vehicles, household goods and textiles, cement, other construction materials, metal fabricating and food processing (notably sugar refining and vegetable oil production) are the main manufacturing sectors.
Vehicle production is a large element of manufacturing, about 20 percent, with sales of US$ 6 billion and is largely based around Tehran, Mashad and Tabriz, along with most of component manufactures. The government, through agencies of the Ministry Mines and Industry, has the largest shareholding in the vehicle sector, although foreign joint ventures have been of increasing importance. The vehicle sector could provide increasing exports to the immediate region.
Telecommunications and IT
Telecommunications attracts much attention in Iran and has much growth potential. Presently both mobile and terrestrial telephony are government monopolies, though privatisation has occurred within the system, most notably in the 7.8 billion IPO sale of the Iran Telecommunications company on 27 September 2009.
It is envisaged that mobile franchises will be sold to foreign companies but the first sale, to a Turkish company, is stalled at present.
A committee of BICC Members in the IT/telecoms industry is being formed to promote trade between the UK and Iran in this sector.
Power
It is intended that the restructuring of the power sector will rely on the private sector. The growth plans for the economy indicate the growth of electricity consumption at 7-8 per cent per annum over 10 years.
Domestic consumption of electricity has also decreased considerably in Iran since the implementation of the subsidy reform plan, which has paved the way for electricity exports to Azerbaijan, Armenia, Pakistan, Turkmenistan, Turkey, Iraq, and Afghanistan.
In addition, Iran seeks to become a major regional exporter of electricity and has attracted more than $1.1 billion in investments for the construction of three new power plants. As of October 2012 talks are underway with the government India to increase the export of electricity, planned in 2012 to rise to 6,000 megawatt-hours to the subcontinent.
Water and Waste Water
Foreign investment and expertise are required for the water and waste water industries.
Agriculture
Agriculture accounts for 20 percent of GDP and its outputs are varied. Poultry and livestock farming is significant and some of it industrialised to European quality standards. Aquaculture and fishing are an underdeveloped export sector.