PETROCHEMICAL INDUSTRY OF IRAN         Petrochemical industry in which petroleum hydrocarbons are processed in more valuable materials provides a variety of products with higher value-added. Nowadays, the products derived from this course of industry are widely used in all subsidiary branches. In view of the growing need of the world to petrochemicals and high value-added nature of this sector (50%-100%), after the end of the Second World War the petrochemical industry has witnessed special attention. The annual consumption of petrochemicals in the world amounts to 670 million tons, however, taking into account of 4 percent increase per year, it is expected that the world demand will hit 1 billion tons during the next decade. Iran holding 8.7 percent of the world crude oil reserves and 15.7 percent of gas resources with a population more than 62.8 million, located in a unique geographical situation offers best potentials to serve as a major producer of petrochemicals both in regional and global levels. The early days of petrochemical industry in Iran dates back to 1958 when Marvdasht petrochemical plant was established. Since then, up to the end of 1979 the government whether invested in or conveyed promissory note of about $2.4 billion in this sector. Some $697 million of the investment was allocated to the plants that were coming into operation and would increase the total output to 4.1 million tons. It should be noted that 3.8 million of the production mainly comprised of fertilizers that constituted much lower value-added.   Just before the Islamic Revolution in 1979, some plants such as Shiraz petrochemical plant, Razi chemical company, Abadan petrochemical industry, Kharq chemical company, Farabi and Pasargad chemical companies and Iran Carbon company came into operation. Furthermore, the government conveyed $1.74 billion promissory note to develop Shiraz petrochemical complex and Imam Khomeini port petrochemical complex containing annual capacities of each 1.2 million and 5.33 million tons, respectively. During the period of 1977-1988 due to some problems caused by the Revolution and imposed war, there was not any significant investment in petrochemical industry so that development plan of Imam Khomeini port petrochemical complex practically stopped. However, at the same time, the government consuming $380 million developed Shiraz petrochemical complex (Alkali-chlorine plant) which contained a capacity of 75,000 tons. In the meantime. the government investing a total budget of $1.88 billion implemented some other development projects such as Esfahan aromatic plant (193,000 tons), phosphate fertilizer (250,000 tons), Arak petrochemical complex (534,000 tons) and Shiraz methanol plant (84000 tons). During the war period annual production of petrochemicals decreased to 800,000 tons, nevertheless, by the end of the war, since 1990 to 1997, the government invested some $7.2 billion in this sector to increase the annual output to 13,105 million tons. This figure indicates that the production during seven years has been four-folded. It is predicted that the total capacity of petrochemical industry by the end of the Third Development Plan reach 38 million tons per year and the worth of the products derived from this sector be increased to $7 million.       The share of petrochemical industries in Gross National Production (GNP) and non-oil export currently are 0.75 and 19 percent, respectively. In this context, Iran retains merely 0.5 percent of share in global petrochemical production and 1.8 percent of portion in world trade of petrochemicals. Iran is attempting to increase its share in global export market to 3 percent by the year 2005, which is the ending year of the Third Development Plan. According to this, foreign exchange revenue of the country earned by the export of petrochemicals is expected to increase from currently perceived amount of $600 million to $4 billion by the end of the Third Development Plan. On this basis, Iran has concluded many agreements with international petrochemical companies from Germany, England, Malaysia, and some other countries to establish new plants and upgrade presently operating units. There are also some plans that are passing evaluation and funding processes. Considering the petrochemical plants, which are being constructed in the region, it seems that the Persian Gulf is liable to gain the most significant position in production and export of petrochemicals. Nevertheless, apart from Iran, all other Persian Gulf littoral states face much limited markets to assimilate petrochemical products. So, taking into account of the vast area of land and great population, Iran is quite competitive to play a major role in production and export of petrochemicals.