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Strikes Begin at Abadan Refinery: Third Phase Postponed

By Ardalan Sayami, Rooz Online

A strike at Abadan's oil refinery is no inconsequential event. This is the largest gasoline producing plant in Iran which also happens to be the oldest oil refinery plant in the Middle East. The strike of its workers in 1978 was consequential for the 1979 revolution that toppled the monarchy in the country. Now, in the third decade of the same revolution, we are witness to a strike by the refinery's workers of the third phase of the refinery upgrade. The strike began on Monday, February 14, the day Iran's Green Movement leaders had called out the public into the streets to show their solidarity with the people's uprisings in the Middle East, but which also turned into an anti-Iranian regime rally, leaving at least two dead. The workers says that they have not been paid their pays for the last six months.

Abadan Refinery

According to reports, security officials have confronted the strikers but the sit-in and the strike still continues. Workers have said that they will continue their strike in the days ahead because their salaries cannot be paid. While official announcements since 2009 have been repeatedly promising the launching of Phase III units, this has till today not materialized.

This expansion of Abadan's refinery has been in the works since 2003 but it was only in 2007 that the then-CEO of the country's National Refining and Distribution Company announced, "By implementing Phase III of the Abadan refinery's improvement plans, about 20 percent of the country's gasoline (petrol) needs will be met, reducing about the same amount of imports."

Expansion of Abadan's refinery was planned to take place in three phases. The first was a $100 million project which began in 2003 and was completed in 2 years. The second phase was completed a year later. This was a larger task and involved the removal of older units and the construction of new ones at a cost of $1.5 billion. This phase was planned to increase gasoline and diesel production.

Regarding the Phase III, then CEO Ali-Reza Abhaji has said that this phase would produce 87-octane grade gasoline for domestic consumption. The funding for the project he said would come through the sale of public. He added that the funding was completed in a short time and was a success. Earlier, Nureddin Shahnazi, the CEO of the National Refining and Distribution Company, also had talked of selling stocks worth $250 million to raise money for the expansion projects, adding that this had been accomplished successfully and that there had been an increase of 15 percent in the value of the stocks.

The Third Phase of Abadan's expansion was scheduled to be compete by 2009 and earlier that year Abhaji had announced that with the completion of the new cat cracker unit with a capacity of 45 thousand barrels a day and the other units such as butane gas, the isomerization, alkalization, etc the volume of gasoline production at the plant would top 16 million liters a day. Sounding an optimistic tone, he also said, "The construction of Phase III is going ahead with full speed and is expected to be completed by the end of the year," i.e., in 2009.

But despite the growing need for gasoline in the country, the planned units of Phase III did not go into production as announced.

Ironically, instead of questioning the reasons for the delay in the completion of Phase III units, Majlis representatives praised the project and deputy Abdollah Kaabi from the energy committee of the legislature announced in 2010, "As a measure to combat the enemies, Abadan's refinery unit will be complete by the revolution's anniversary [on February 2010] and the final step towards self sufficiency in gasoline will be attained. We expect this refinery to go into production on February 11."

In fact, it was the completion of this unit at Abadan and the Arak refineries that was expected to bring about self-sufficiency. Another official, Zeighami, the current CEO of the Distribution Company said that Phase III of Abadan's refinery expansion would be complete in February this year.

Iran's supreme leader ayatollah Khamenei had this in mind when he announced on February 4 during a Tehran University Friday prayer gathering, "Based on reports that I have received, the country will be completely self-sufficient in the production of gasoline by February 11."

But neither the promises of the officials nor that of the leader materialized on February 11th. According to reports, the final phase of the project has run into serious problems making the determination of any future completion date difficult.

One of the Abadan oil refinery strikers told Rooz, "More than 500 workers from the construction company that was contracted to install the equipment at the refinery have not received their salary for the past six months. This is despite the fact that these workers receive a third or even a sixth of the salary that older workers do. This is why they have gone on strike. Refinery officials however have said that our pay problem relates to the contractor and the refinery has nothing to do with this."

Another striking worker said, "We do not know where to complain to be heard." One of the managers from the contracting company told Rooz, "The oil company has made no payments to us during 2010 in order for us to meet the demands of the workers."

... Payvand News - 02/21/11 ... --

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