Tehran has signed an agreement valued at $2 billion with South Korea's petchem giant Daelim Corporation to renovate and expand the Isfahan Oil Refinery, a top official said.

The deal is aimed at reducing fuel oil production and boosting output of higher-value products such as gasoline, Abbas Kazemi, head of National Iranian Oil Refining and Distribution Company (NIORDC), was quoted as saying in an Iran Daily report, which cited Mehr News Agency.

NIORDC is also in talks with two high-profile Japanese companies for projects to curtail mazut production at Tehran and Bandar Abbas refineries, Kazemi said. The final agreements would be signed soon, he added.