BASF continues to label as “rumor” remarks by executives of Iran’s National Petrochemical Company (NPC) that Germany’s and the world’s biggest chemical producer is negotiating projects in the country worth $4 billion. Nevertheless, remarks made by CEO Kurt Bock at the annual results press conference in Ludwigshafen on Feb. 26, suggest it is looking very closely at the prospects for investments.

Marzieh Shahdaie, managing director of Iran's National Petrochemical Company (NPC), recently told local news agencies that BASF had agreed to take a 60% stake in a petrochemical township in southern Iran’s Parsian Special Industrial Zone. NPC’s director for planning affairs, Hamid Reza Rostami, went on record as saying the proposed $4 billion project will involve technology transfer and a “guaranteed market.”

Iran has already revealed plans to become the leading producer of petrochemicals in the Middle East by significantly expanding the range and volume of its petrochemical production. Officials also have stated repeatedly that talks with Western companies about projects are in progress.

According to Shahdaie, the Iranian petrochemical sector should attract $8-10 billion annually mainly through foreign direct investment.

While BASF so far has refused to be drawn on its possible participation in any of the potential projects, in response to journalists’ questions Bock dropped a few hints as to what the company’s priorities might be.

Iran is reopening after a long period of sanctions, Bock noted, adding that German industry in general as well as BASF in particular are opening to it. BASF still has a small team in Iran, he acknowledged, while saying the company has recruited personnel to provide advice on how to help rebuild the country’s industrial infrastructure.

Iran is happy to work with German companies, Bock said, remarking that companies from the two countries worked well together in the past, and Iran thus well knows that Germany is a reliable partner.

The BASF chief outlined three considerations for his company’s engagement in the Iranian market in future. Along with helping with reconstruction, he mentioned a possible engagement in the oil and gas sector. Iran already has put some ideas on the table, Bock said, “and we will have to see whether or not these can be attractive for us.”

As regards specific oil and gas projects, he said BASF’s management will need to study whether adding such undertakings to the already strained capital spending budget, at a time when very low oil and gas prices are creating pressure, is an attractive proposition.

The third question to be addressed in regard to Iran, Bock concluded, is, “Can we produce chemicals there?” He then went on to list why chemical production in the Middle East country would be attractive if conditions were right. “Iran is a resource-rich country, the world’s third or fourth in terms of oil and gas, a country of 80,000 people who are very well educated. There is a market there, and you also have to consider that India is right next door.”