Indian refineries owe over $2 bn oil dues to Iran: Dharmendra Pradhan

Indian refiners owe $2.55 billion in oil dues to Iran, 90% of which are payable by private sector Essar Oil Ltd, Oil Minister Dharmendra Pradhan said on Monday.

Four Indian refiners had outstandings of $6.11 billion in May, 2016 when formal banking channels were opened with Iran after nearly four years. They came down to $2.55 billion as on November 15 after public sector refiners paid most of their dues to Iran, the minister said.

Mangalore Refinery and Petrochemicals Ltd (MRPL) had an outstanding of $2.557 billion towards Iran as on May 20, of which it paid $2.355 billion and now owes Iran only $202 million, he said in a written reply in Lok Sabha.

Essar Oil, which the Ruia-brothers have sold to Russian national oil company Rosneft in a $12.9 billion deal, had the biggest outstanding of $2.917 billion on May 20. Of this, it paid only $600 million and still owes $2.317 billion.

"Following the lifting of sanctions on Iran on January 16, 2016 and re-establishment of banking channels from May 20, 2016, Indian refineries have paid $3.563 billion out of $6.118 billion to Iran on account of payment due to National Iranian Oil Co (NIOC) for supply of crude oil," he said.

State-owned Indian Oil Corp (IOC) has paid $538 million out of $550 million due to Iran while HPCL Mittal Energy Ltd, which operates a refinery at Bhatinda in Punjab, has cleared $52 million out of $76 million dues.

Rosneft last month signed agreement to buy a 49% stake in Essar Oil's 20 million tons a year Vadinar refinery in Gujarat, adjacent port and petrol pumps, while Trafigura and United Capital Partners (UCP) split another 49% equity.

The deal has an enterprise value of close to $12.9 billion — $10.9 billion being for a 20 million tons a year refinery in Gujarat and over 2,700 petrol pumps and another $2 billion for Vadinar port in Gujarat. The deal factors in Essar Oil's debt of about $4.5 billion and about $2 billion debt with the port company.

Also, the dues to Iran were to continue to be on Essar Oil books and the new owner will take responsibility of it.

To a separate question, Pradhan said India imported 12.1 million tons of crude oil from Iran during April-September. This compares to 12.7 million tons imported in whole of 2015-16 and 11 million tons in each of the two previous fiscal.

Imports from Iran are second to only Saudi Arabia (20.4 mt) and Iraq (19.6 mt).

In 2015-16, Iran was behind Saudi Arabia (40.4 mt), Iraq (36.8 mt), Nigeria (23.4 mt) and UEA (15.7 mt), he said.