The Iranian government is planning to hold an initial public offering (IPO) for its largest gasoline refinery within weeks as part of a privatization campaign which is meant to attract financial resources for the government and to use the private investment for the modernization of manufacturing infrastructure.
President of Iranian Privatization Organization Hossein Ghorbanzadeh said on Thursday that the government’s shares in Arak Oil Refinery will be divested until December 22.
Ghorbanzadeh told the 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 Shazand refinery, is responsible for 25% of Iran’s gasoline output. The refinery, which was founded in the early 1990s in the central Iranian province of Markazi, has a total capacity of 175,000 barrels per day (bpd).
The refinery is one of the most efficient in Iran as low-quality mazut fuel accounts for less than 10% 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 highly needed in the Iranian steel manufacturing sector.
Officials in the Oil Ministry, which controls the refinery, had said in August that the value of the facility for divestment is around 2,110 trillion rials or $8.4 billion considering exchange prices at the time. They said the refinery’s debts to the banking system in Iran amounted to around 800 million euros.