Indian refinery resumes purchase of Iran oil
India's Mangalore Refinery & Petrochemicals Ltd. (MRPL)
purchased its first cargo of Iranian crude since April as India
prepared a 20 billion-rupee ($314 million) insurance fund to cover
future imports.
The refiner received about 85,000 metric tons on Aug. 17, Managing
Director P.P. Upadhya said in a phone interview from Mangalore,
Bloomberg reported.
The company has ordered three more shipments of a similar size, he
said, without stating delivery schedules.
"This is the first cargo we've got from Iran this financial year
and we'll see how many more we can import in the rest of the year,"
Upadhya said. "The same ship has returned to Iran and will bring
the additional cargoes."
The purchase follows comments from Finance Minister Palaniappan
Chidambaram on Aug. 12 that India plans to import crude from Iran
without breaching United Nations sanctions.
The U.S. and European Union are seeking to curb global trade with
the Persian Gulf nation to halt its nuclear program, which they say
is aimed at producing weapons. Iran says the program is for
civilian purposes.
India is planning the insurance fund to cover refiners buying crude
from Iran, according to Financial Services Secretary Rajiv Takru.
It will be managed by General Insurance Co. and an initial amount
of 5 billion rupees will be offered soon, he said in an interview
yesterday.
Mangalore Refinery, a unit of Oil & Natural Gas Corp., India's
largest oil explorer, and Hindustan Petroleum Corp. (HPCL), the
nation's third-biggest state-refiner, halted crude purchases from
Iran in April after Indian insurers declined to cover refineries
that process the oil.
"We've haven't started imports from Iran and we won't until the
insurance issue is fully resolved," said B.K. Namdeo, the director
for refineries at Hindustan Petroleum in Mumbai.
The company hasn't bought any of the 1 million tons, or 20,000
barrels a day, it planned to import this year, he said. It
purchased 2.2 million tons in the year ended March 31.
Mangalore Refinery's shares rose 5 percent to 28.55 rupees, the
biggest gain since June 28, at the close of trading in Mumbai
today. The benchmark S&P BSE Sensex index slid 0.3 percent.
Iran's Asian customers, including China and South Korea, have won
waivers from the U.S. allowing imports of Iranian crude because
they were able to show purchases had been curbed.
While India has abided by several rounds of UN sanctions on Iran,
it has criticized unilateral American penalties as an infringement
on the Persian Gulf nation's sovereignty.
India imports about 80 percent of its oil, swelling the country's
current-account deficit, which in turn is hurting efforts to revive
economic growth from its slowest pace in a decade and weakening the
rupee. The currency is the worst performer in the Asia-Pacific
region this year, according to data compiled by Bloomberg.
India imported about 7.2 percent of its crude from Iran in the past
fiscal year, down from about 11 percent in the previous 12-month
period, according to the oil ministry.
Iran has dropped to sixth place, from second a year ago, among the
largest oil producers in the Organization of Petroleum Exporting
Countries. It pumped 2.56 million barrels a day last month,
according to data compiled by Bloomberg.