Iranian Oil Ministry’s news service Shana said in a report that a contract had been signed during President Ebrahim Raeisi’s first day of visit to Venezuela on Tuesday to renovate a Venezuelan ammonia plant.

The report said the contract is a first of its kind and will expand the presence of Iranian companies in Venezuela’s oil sector which has until now been limited to areas like exports and imports and refinery renovation schemes.

It said an Iranian company will carry out repair works on some parts of the ammonia plant in Venezuela under the contract in return for having a share in the sales of petrochemicals produced in the plant.

Iranian companies have already contributed to repair and renovation projects at Venezuelan refineries under contracts that allow Iran to process its crude oil in those refineries and sell the products in regional markets.

The partnership between Iran and Venezuela has been strengthened in recent years amid efforts by the two countries to offset the impacts of American sanctions on their oil sectors.

Oil Ministry estimates suggest Iranian companies’ involvement in revitalization schemes in Venezuelan petrochemical plants could increase to account for a third of the country’s total petrochemical output capacity of 12 million metric tons (mt) per year.

Iranian Oil Minister Javad Owji, who is in Caracas with President Raeisi, said on Tuesday that only 2 million mt of Venezuela’s petrochemical production capacity is active and the rest has become idle due to the US sanctions.

DAY/PR