Excerpts from the Presentation of
H.E. Eng. Behrouz Boushehri,
Advisor to the Petroleum Minister, and President NIOC Pension Fund

At the

Iran Energy Forum
27-28 May 2002
London

NIOC Pension Fund

Founded in 1958 according to the Article of Association of National Iranian Oil Co. (NIOC) certified by the parliament, NIOC PF is covering 120,000 oil industry employees working for NIOC, NIGC, N PC and all subsidiaries and pays to about 17,000 retired staff their monthly salaries.

NPF receives about 35% of the total, payment of the whole 011 industry - about 9% paid by employees and 26% paid by the companies.

This makes a total contribution of about US$120 million annual income, which results in a US$80 to 100 million surplus for investment after payment of costs and salaries of retired employees.

Financial Profiles:
NPF with around US$900 to 1000 million has the following structure:

The bank deposit includes deposits in Iran and UK banks. The minimum interest rate in Iran is 18%.
The bonds include Government issued bonds with 17% interest rate and instant liquidity. The shares in stock market include a growing portfolio.

Real Estate properties Include about 30 big and small office buildings and hotels leased to NIOC and other companies and the big NIOC house building located in Victoria, opposite West Minister Abbey, valued around £85 million.

The loans (US$200 million) to employees are mainly for housing and NPF has at least five times worth of this amount as collateral.
After acquiring over 40 companies in Stock Exchange and such major companies as Petropars, NITC,.... NPF is presenting itself as a big and important investment organization and trying to expand in different
fields.

One major area is presenting the organization in the Free Zones & Special Economic Zones. This will bring a new area for cooperation especially for Oil Companies and related activities.

Free Trade Zones (FTZ)
and
Special Economic Zones (SEZ) of Iran

• In 1990 the law for three free trade/industrial zones was passed by the Majless and later the regulations for establishing 15 special economic zones was also ratified.
  
• In 1993, the law for administration of free trade/industrial zones was announced. The law included the provision of 10 by-laws and it made the free trade industrial zones very attractive as compared to the mainland.

Legislative Advantages

• 15 years tax holidays;
• Possibility of 100% foreign ownership;
• No restriction on repatriation of capital and profit;
• Freedom of foreign movement;
• Settlement of legal disputes in mutually agree upon courts;
• Government guarantee for foreign investment;
• Easy issuance of work permits for foreigners;
• Offshore baking;
• Protection of registered trade marks and intellectual property rights;
• No entry visa required;
• Exemption from customs and duties; and
• Relaxed labour regulations.