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Iran loses 3% of oil revenues due to bad equipment

Business Materials 28 November 2015 14:50 (UTC +04:00)

Baku, Azerbaijan, Nov. 28

By Umid Niayesh- Trend:

Iran's oil industry is spending more than three percent of its revenues to repair or replace the corroded equipment," Alireza Asl-Arabi, an official with the oil ministry said.

The country's oil industry in particular in the upstream sector is worn-out and suffers corrosion, Asl-Arabi said, Iran's ILNA news agency reported Nov. 28.

The official further said that Iran's petrochemical industry witnessed a 10 percent efficiency fall in the last fiscal year (ended on March 21) due to outdated equipment.

Asl-Arabi added that Iran needs to invest some $10 billion of assets to renew its oil industry equipment.

The Islamic Republic should decrease the corrosion costs by 30 percent during a five year period, he said. He expressed hope that once the sanctions are removed Tehran will use foreign countries' experience and technology in order to cut the corrosion costs.

Many companies have expressed readiness to help Iran in eliminating corrosion as well as exchanging methods and equipments in the oil industry.

Asl-Arabi earlier said that Iran loses 6-8 percent in GDP directly and indirectly as a result of failing to manage corrosion cases in various industries.

Due to a lack of state-of-the-art equipment and technology, the presently depleted equipment that was imported long ago has never been upgraded or exchanged for newer models. The dilapidated facilities are the industry's big problem.

Most corrosion cases occur in the upstream sector of oil industry whose actual productivity rate is only 25%, while corrosion management is more systematic in refineries and petrochemical plants due to the demanding nature of their activities, according to Al-Arabi.

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