VOLGOGRAD, Russia -- At a sprawling pipe factory, an exhibit of surrealist art featuring reproductions of Mondrian, Malevich and Magritte lines the walls. One of the company's biggest shareholders, a collector of surrealist works, says the art will stretch engineers' minds and unlock workers' creativity.
Commentary at the exhibit gets to an existential debate with Shakespearean flair: "Tube or Not Tube?" It is a fitting question for the factory owner, Tube Metal Co., the biggest supplier of pipes to oil and natural-gas producers.
Like many players in the oil patch, the Tube Metal Co. is being hurt by weak energy prices. With oil dipping below $29 a barrel, the company has been pulling back in the United States and elsewhere.
But Tube Metal contends it has an edge in a relatively untapped market, Iran, a country that has warm political relations with Moscow and has tens of billions of dollars in newly unfrozen, shah-era money to spend on oil infrastructure. During the Soviet era, Tube Metal was the dominant provider of pipes to Iran.
Russian companies are broadly gearing up to get back into Iran.
Sukhoi wants to sell its Superjet airliners to a market starved for transportation. Avtovaz has started talks to open an assembly plant for Lada cars in Iran.
The oil and natural gas giants Gazprom and Lukoil are weighing investments in a liquefied natural gas project on the Persian Gulf and an oil field. Eurasia Drilling Co., an oil-field services business; and Tatneft, a second-tier Russian oil company based in Tatarstan, a predominantly Muslim region east of Moscow, both have good prospects.
"If you have dry firewood and the wind is blowing, the fire will get going," Sergei Chetverikov, director of the pipe factory in Volzhsky, said of Tube Metal's prospects in Iran. "All you need is the match."
After the signing of the nuclear deal with Iran, the administration of President Barack Obama promoted the benefits for nonproliferation and global security. But the administration was less vocal about the benefits for business.
That is because the United States is cautiously watching Iran.
Russia has an advantage. It has long backed Iran diplomatically and it has deep military ties.
After the nuclear deal, Vice Prime Minister Dmitry Rogozin of Russia said his country was beginning to supply S-300 anti-aircraft missile systems to Iran. "This contract is now executed and paid for," Rogozin said.
He noted that the deals between Russia and Iran were not just in the military arena. The S-300 supply, he added, would "open the entire road for cooperation with Islamic Republic of Iran."
Like other countries, Russia sees opportunity in a country long-starved for capital.
Iran's economy is expecting a jump-start from $29 billion in frozen offshore assets, unfrozen as a condition of the deal. The International Monetary Fund projects that Iran's economy will grow 5.5 percent in 2016 and again in 2017.
The energy industry is especially attractive for overseas companies.
Iran holds the Middle East's second-largest oil deposits, after Saudi Arabia, and by some estimates the world's largest reserves of conventional natural gas. Even before sanctions were lifted, Iran signed deals to export gas to Iraq and Pakistan.
But its industry lacks the pipes to deliver that gas, as companies woefully underinvested during the era of sanctions. In total, Iran could spend as much as $100 billion rebuilding its natural-gas pipelines, analysts said.
Tube Metal says it is in a good position to provide much of that business.
At its gigantic metal works, it pours, grinds and welds the huge steel straws that pull much of the world's oil out of the ground. The company says 20 percent of the global oil raised to the surface at one point or another flows through its tube, including high-end varieties of pipe made for the insides of oil wells.
Russia does face some challenges as it prepares to jump into Iran.
With its own set of Western sanctions over the Ukrainian conflict and weak oil prices, the Russian economy is suffering, and companies are having a tough time raising money. That could make it difficult for companies like Lukoil and Gazprom, their revenue shrinking, to immediately revive their production deals in Iran.
"The general feeling is still cautious," said Ildar Davletshin, an oil and gas analyst at Renaissance Capital, a Moscow investment bank. With low oil prices, the budgets of Russian oil companies are "under huge stress."
Tube Metal views Iran as a stress reliever.
After the United Nations imposed sanctions on Iran in 2006, Russian companies like Tube Metal had to retreat. The company's bottom line suffered.
So Tube Metal shifted its attention to the United States. As the shale boom took off, the company bought 12 factories in North America.
Now, the pendulum is swinging the other way. With energy prices falling, shale companies are suffering. Tube Metal's North American division, Ipsco, has idled two plants and plans to lay off 40 percent of its workforce of 2,700.
At home in Russia, Tube Metal is hunkering down.
It has put in place incentives for workers who find ways to cut costs on the factory floor, such as vacations in Sochi, the Black Sea resort. Tube Metal also is nudging its Russian workers to adopt the timesaving ways of the Toyota production system, a Japanese industrial philosophy.
More importantly, Tube Metal wants to increase production.
And it is looking to the past for how important Iran could be. In the Soviet period, the plant in Volzhsky provided up to 40 percent of the pipes used in Iran's oil industry -- including casing set into oil wells and pipes carrying natural gas over the desert.
"The idea is simple: They lift the sanctions, we send the pipes," Chetverikov said.
SundayMonday Business on 02/14/2016