Skip to comments.Strikes Begin at Abadan Refinery (Iran)
Posted on 02/21/2011 8:55:34 AM PST by Pan_Yan
A strike at Abadans 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 refinerys workers of the third phase of the refinery upgrade. The strike began on Monday, February 25th, the day Irans Green Movement leaders had called out the public into the streets to show their solidarity with the peoples 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.
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 for 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 Abadans refinery has been in the works since 2003 but it was only in 2007 that the then-CEO of the countrys National Refining and Distribution Company announced, By implementing Phase III of the Abadan refinerys improvement plans, about 20 percent of the countrys gasoline (petrol) needs will be met, reducing about the same amount of imports.
Expansion of Abadans 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 Abadans 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, Abadans refinery unit will be complete by the revolutions 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 Abadans refinery expansion would be complete in February this year.
Irans 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.
Funny. Can’t even refine their product into gasoline. How ironic is that?
I never understood why “someone” didn’t arrange an accident at Iran’s main gasoline terminals. The country would grind to a halt without their imported gasoline and the little bit they refine themselves.
After reading that, I started to conclude that the Iranian regime was going to make them all slaves to finish it, but realized they are pretty much already slaves, if they get paid 1/6 of what the older workers get, and haven’t been paid in six months.
They got problems, all right.
How long ‘til Obama tells the employees to get back to work?
My refinery guide shows Abadan as a 350,000 bbl/day refinery which is pretty good size. It makes diesel, lubes and asphalt among other products. It is one of nine refineries in Iran. These nine plants consume 1,451,000 bbls/day of crude oil.
From what it sounds like...soon enough.
I would not be at all surprised to hear of an explosion or fire.
Strange thing...I have known a lot of Iranians in my life. I spent time in US Navy A-School back in the Seventies with a bunch of them (didn’t get to socialize with them, but interacted with them often) went to college with a number of them, and I have always liked Iranians. I found them to be smart, personable, generally well spoken and with a decent sense of humor, at least the ones I knew.
Then came 1979. Some of the guys I was in college with didn’t want to go home, but some of them had to. No choice. But there were a couple who appeared to be cut from the same cloth as the revolutionaries and thugs. They glowered.
I hate to see bad things happen to the Iranian populace, but...it seems that is the only way they are ever going to get their country away from the mullahs...if ever.
so if it is offline will Iran be swimming in unused and unsold oil? will they have to sell it on the open market to get the money for the workers? will they murder they workers? i can’t help but wonder how this will play out.
Interesting. From the article, it sounds like something wasn’t well designed or planned, and they kept building towards it only to finally have to face the fact as it got very far along that...something wasn’t going to work as advertised.
If that is the case, it isn’t going to end well for someone.
Thanks. This is good to hear.
There are workers striking in Iran all the time, but it never gets reported.
Striking refinery workers is a BIG deal.
Not every refinery is built to produce motor fuels. It looks as if this might have been a feed stock producer that they have tried to upgrade.
“The strike began on Monday, February 25th”
I assume they mean Monday Feb. 14th
Thanks for posting
What is a feed stock producer? Something that pre-refines crude into a form that is sent elsewhere for more refining?
Fortunately, The Won is busy at the moment:
By feedstock producer, I think he was referring to the mix of end products mentioned for the new unit. They struck me as being the kinds of hydrocarbons used for plastics production and for high octane gasoline blends (such as premium gasoline and aviation gasoline, which are needed for high compression engines).
Stuff for chemicals, usually.
The end use products could include anything with a petroleum base.