Hyundai Signs 3 billion Euro Deal For Iran Oil Project

Korea’s Hyundai Engineering Co has signed a deal worth 3 billion euros (USD 3.2 billion) to invest in a major an Iranian investment fund on March 13, 2017 to invest in a major Iranian oil project. Hyundai Engineering plans to invest 3.1 billion euros in the second phase of the Kangan oil production and refinery project in southwest Iran, it said in a statement. The agreement marks one of the biggest investments since a 2015 nuclear accord between Tehran and world powers lifted global sanctions on Iran. The agreement covers construction of the second phase of the Kangan Petro RefiningComplex in southwest Bushehr province of Iran in which Hyundai Engineering plans to invest 3.1 billion euros which is 95 percent of the overall project cost. The second phase of the deal involves the construction of four production plants at the Kangan site and is expected to take four years. The first phase of the Kangan project was 30 percent completed with an investment of nearly 120 million euros. The deal was signed in Tehran by Hyundai Engineering CEO Sung Sang-rok, who then headed south to oversee the launch of a new assembly line for the company’s Elantra car. Hyundai was partnering with Kerman Khodro for the new car factory, without giving further details. The South Korean company will have nine months to secure financing for the oil project – a potential obstacle due to continued reluctance of international banks to engage with Iran. Securing the funds through Korean banks will be “the most important and most difficult step,” said Asghar Arefi, head of Iran’s Ahdaf Investment Company which is partnering on the project, according to Shana news agency, which is linked to Iran’s Oil Ministry. The South Korean company will have nine months to secure financing for the oil project which is a potential obstacle due to continued reluctance of international banks to engage with Iran.

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