Indian refiners pay part of $6.4 billion dues to Iran

[guru1]

Tehran: Ahead of Prime Minister Narendra Modi’s maiden visit to Iran, Indian refiners have made first euro payments in four years to clear a part of the $6.4 billion in past oil dues.

Mangalore Refinery and Petrochemicals Ltd (MRPL) has paid $500 million and Indian Oil Corp. Ltd (IOC) $250 million over the past two days, people with direct knowledge of the development said. Private sector refiner Essar Oil Ltd is to pay $500 million.

The refiners cleared part of their outstanding towards crude oil they buy from Iran through Union Bank of India which in turn transmitted the payment to National Iranian Oil Co. (NIOC) through HalkBank of Turkey. They bought US dollars and deposited with Union Bank, which did an onward transmission in euros.

This the first payment by Indian refiners in a foreign currency since lifting of sanctions against Iran in January this year. This also comes days ahead of Modi’s two-day visit to Tehran beginning Sunday during which re-establishing credible banking channels between the two nations is likely to figure prominently during talks.

The people cited earlier said the remaining outstanding dues will be cleared in instalments to avoid a run on the rupee. The Reserve Bank of India is coordinating the repayments, they said.

With sanctions blocking banking channels, Indian refiners have since February 2013 paid nearly half of the oil import bill in rupees while keeping the remainder pending opening of payment routes. The dues on the count now total to $6.4 billion.

MRPL owed $2.6 billion, out of which it has now paid $500 million. After paying $250 million, IOC is now left with outstanding dues of $310 million. Essar Oil owes Iran about $2.6 billion, while HPCL-Mittal Energy Ltd has to pay $60 million. PTI

http://www.livemint.com/Companies/Z...ners-pay-part-of-64-billion-dues-to-Iran.html

 

[NaCon]

Indian oil payment backlog to Iran to be cleared soon - Iranian official

A worker walks atop a tanker wagon to check the freight level at an oil terminal on the outskirts of Kolkata, India in this November 27, 2013 file photo.
Reuters/Rupak De Chowdhuri/Files


ISTANBUL Indian oil refiners will clear around 6 billion euros ($6.7 billion) of outstanding debt to Iran through Turkey's Halkbank soon, a senior Iranian economy official said on Wednesday.

India is one of the biggest buyers of Iranian crude and built up a payments backlog when Iran was under Western sanctions, with its refiners owing about $6.5 billion to Iran. They cleared around $770 million in euros through Halkbank to the National Iranian Oil Co (NIOC) in May.

"As per the instructions of the Central Bank of Iran, the local banks in India will transfer the money to Halkbank," Sadegh Akbari, Iran's general director for foreign economic relations, told reporters at a conference in Istanbul.

Asked when the remaining funds would be cleared, he said "in a short period of time" but declined to comment further.

The refiners had been holding back some payments to Iran after a channel through Halkbank was closed in 2013, although payment of some of the funds was allowed after an initial temporary deal to lift sanctions.

Last week, on the basis of an advisory from the Reserve Bank of India, India's oil ministry wrote to refiners saying the remaining dues can be settled in three months from May 30.

It told companies to stagger payments and ensure foreign exchange demand was limited to $500 million per week in a bid to avoid volatility in the forex market.

Iran wants to recover the funds owed by India and other buyers of its oil in euros to reduce its dependence on the U.S. dollar, a source at the NIOC told Reuters in February. Europe is one of Iran's biggest trading partners, increasing Iranian demand for the European currency.

Akbari said Iran wanted to complete the transfer from Indian refiners via Halkbank because of the "positive banking relations" between Iran and Turkey and said it needed the funds to import products from Turkey and Europe.

He also said the Turkish and Iranian central banks had reopened their connection on the SWIFT global transaction network, in a sign of normalising banking ties.

SWIFT this year reconnected a number of Iranian banks to its system, allowing them to resume cross-border transactions with foreign banks. Iranian banks were disconnected from Belgium-based SWIFT in March 2012 as international sanctions tightened against Tehran over its disputed nuclear programme.

($1 = 0.8970 euros)



(Writing by Nick Tattersall; Editing by David Dolan and Adrian Croft)

 

[Faravahar]

India did not pay it all at once due to economical reasons. That was understandable.
Hope to see more investment from our Indian friends into Iran.

 

[KediKesenFare3]

India to make $6.7 bln oil payment to Iran via Turkey
Iranian official confirms that Indian $6.7 billion oil payment backlog to Iran will be cleared soon via Turkey's Halkbank
http://www.yenisafak.com/en/economy/india-to-make-67-bln-oil-payment-to-iran-via-turkey-2474915

2014:
Turkey's Halkbank seen continuing to handle Iran oil payments - U.S.
http://www.reuters.com/article/turkey-iran-halkbank-idUSL5N0L11FY20140127