December 31, 2021
In the first privatization action of the Raisi Administration, the government is planning to sell off its fifth largest refinery during December in order to raise cash to cover part of the regime’s huge budget deficit this year.
The president of the Iranian Privatization Organization, Hossain Ghorbanzadeh, said November 25 that the government’s shares in the Arak Oil Refinery would be divested by December 22.
Ghorbanzadeh told state TV that the divestment is in line with the annual budget law, saying the government will continue to sell assets that are deemed surplus to meet targets set under the budget.
The Arak Oil Refinery, which also goes by the name of the Shazand refinery, was founded in the early 1990s in Markazi province and has a total capacity of 250,000 barrels per day (bpd) of crude oil. Abadan remains the country’s biggest refinery with a capacity of 450,000 barrels a day.
The Arak refinery is described as one of the most efficient in Iran as low-quality mazut fuel accounts for less than 10 percent of its output. It became the first refinery in Iran to produce pentane and hexane last year while a project is underway with more than $300 million worth of investment to produce petroleum coke, which is needed in the Iranian steel manufacturing sector.
Officials in the Oil Ministry, which controls the refinery, said in August that the value of the facility for divestment was 2,110 trillion rials or $7.7 billion (at the free market price of about 275,000 rials to the dollar). They said the refinery’s debts to the banking system in Iran amounted to around $900 million.