India IOC says paying for Iran oil through Turkey bank | delhi | Hindustan Times
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India IOC says paying for Iran oil through Turkey bank

delhi Updated: Aug 10, 2011 17:33 IST

Reuters
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India's top state-run refiner , Indian Oil Corp Ltd, said on Wednesday it had begun paying its debt to Iran for oil imports and would clear an outstanding of 380 million euros this month using an arrangement with a state-controlled bank in Turkey.

PK Goyal, finance director of IOC , said the company had paid off 73 million euros and was expecting one cargo of Iranian oil in September.

Indian refiners, Iran's second-largest oil buyer after China, racked up a $4.8 billion debt after the Reserve Bank of India scrapped a clearing house system last December -- a move welcomed by Washington as it tries to isolate the Islamic Republic.

As debts mounted, Iran refused to issue Indian refiners with firm crude supply plans for August, forcing them to look for alternatives.
But with payments flowing again through Turkey's state-controlled Halkbank , Indian refiners expect Iran to resume 400,000 barrels a day of oil exports in September.

Goyal said the payment mechanism through the Turkish bank looked "as of now" like a permanent arrangement.

Iran has received 1 billion euros ($1.4 billion) from India in the last 10 days for long overdue oil debts, indicating the likely end of a sanctions-related problem that had blocked payments all year, an Iranian official said on Monday.

IOC imports around 30,000 bpd from Iran, whose other Indian clients are Mangalore Refinery and Petrochemicals Ltd , Essar Oil , Bharat Petroleum and Hindustan Petroleum .

IOC is the country's biggest oil refiner but Iran's smallest customer. MRPL is its biggest client.

Washington has tightened sanctions on Iran, which it accuses of seeking nuclear weapons, something Tehran denies.

It has pressured other countries to go further than the U.N. sanctions to isolate the Iranian economy and has succeeded in making it increasingly difficult for the Islamic Republic to make international financial transactions.