PARIS/FRANKFURT -- European countries are sending delegations of both government and business leaders to Iran as years of sanctions draw to a close, looking to spread out their investments as emerging economies slow down.
Germany has moved quickly. Vice-Chancellor Sigmar Gabriel traveled to Iran in mid-July, shortly after the six-party nuclear accord was signed. Among those travelling with him was President Kurt Bock of chemical giant BASF, who said Iran's wealth of natural gas makes it attractive to the chemical industry.
Unlike North America, which is ramping up shale gas production, Europe has trouble procuring cheap raw materials for chemicals. Using Iran as a production base would allow for products to be shipped to both Europe and Asia.
In the oil industry, BP, France's Total and Italy's Eni have also taken an interest in Iran. At the end of 2014, Iran's natural gas and crude oil reserves stood at 34 trillion cubic meters and 157.8 billion cubic meters respectively, accounting for 18% and 9% of the global total, according to BP estimates. Iran, which is mulling boosting oil and gas production, would welcome the technological know-how of European companies.
European companies have close ties to Iran. Chief Executive Officer Patrick Pouyanne of Total, which bowed out of Iran in 2010, expressed confidence that the company would be welcomed back given its long relationship with the country. Eni argued that Iran will need to offer contract terms in line with international standards.
In late July, Laurent Fabius became the first sitting French foreign minister to visit Tehran in an official capacity in 12 years. Although France had taken a hard line during the nuclear negotiations, Fabius emphasized improving the relationship between Iran and France, saying the two countries have taken a step in a new direction.
The French government plans to send representatives from some 100 businesses to Tehran in September, likely representing a wide range of sectors, including the automotive, energy and infrastructure industries. Iran will provide a spark to kick-start France's shaky economy, one French newspaper said.
Major automakers' hopes are particularly high. Iranian vehicle production dropped from 1.6 million in 2011 to less than 800,000 in 2013 as the impact of sanctions worsened. PSA Peugeot Citroen and Renault, which once held a quarter of the market between them, see the lifting of sanctions as a particularly promising opportunity. Iran's government aims to boost domestic production to 3 million vehicles by 2025.
PSA plans to offer its luxury DS brand in Iran. Renault is discussing a capital tie-up with state-run automaker Pars Khodro and is considering launching an Indian-made small crossover in Iran, according to U.S. and European media.
Boeing, Airbus Group and Brazil's Embraer are interested in replacing Iran's aging aircraft fleet as well.
Italian Foreign Minister Paolo Gentiloni visited Iran this month, sounding out the possibility of Eni operating there. Spain plans to send three cabinet members next month, likely alongside a delegation of executives from some 40 companies. Austrian President Heinz Fischer intends to travel to Iran in early September.