 "Indian Oil says Iran may still invest in Chennai Petroleum expansion")
India's biggest refiner Indian Oil Corp Ltd said on Wednesday that Iran may still invest in a refinery expansion project at one of its subsidiaries.
Indian Oil's chairman Sanjiv Singh said that Iran has not ruled out participating in the expansion at Chennai Petroleum Corp Ltd, a south India-based 20,000 barrels per day (bpd) refinery.
Iran's participation has been questioned after India cut back its Iranian crude oil imports following US sanctions.
However, Singh's comments come a few days after India exempted rupee payments to the National Iranian Oil Co (NIOC) for crude oil imports from a withholding tax.
The exemption will allow Indian refiners to settle about $1.5 billion of outstanding payments to NIOC through direct rupee payments.
It has been expected that these payments could help Iran invest in Indian projects, particularly the Chennai Petroleum Corp expansion.
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"Iran has always been positive with this (the new rules). I think they should be able to invest," Singh told Reuters, following a media conference on Wednesday.
Chennai Petroleum plans to invest up to Rs 356.98 billion ($5.1 billion) to replace the 20,000 bpd Nagapattinam refinery in Southern Tamil Nadu state with a 180,000 bpd plant.
Naftiran Intertrade, the Swiss subsidiary of National Iranian Oil Company, holds a 15.4 per cent stake in Chennai Petroleum, while Indian Oil has about a 52 per cent share.
Singh said a detailed feasibility report for the expansion has yet to be prepared.