Jan 2, 2019, 12:55 PM
News Code: 83156269
0 Persons
Iran expanding investment in India's oil sector

Tehran, Jan 2, IRNA - Amid US sanctions on the Islamic Republic, Iran will invest about $218 million (Rs 1,500 crore) to expand a refinery run by Chennai Petroleum Corp. in India, the company’s managing director said.

Leading Indian newspaper the Economic Times quoted S.N. Pandey as saying that 'the state-run company is boosting capacity at its Nagapattinam facility by nine-fold to process 9 million tons per year and the investment is Naftiran Intertrade Co.’s share of the $4 billion (Rs 27,500 crore) expansion plan.'

The rest of the investment will be through debt and equity, including fresh capital from its main founder Indian Oil Corp, the official said.

“We will achieve the financial closure in 2019,” Pandey said. “We don’t see any issue in debt raising. We have already talked to many bankers.”

While Naftiran’s investment will ease the Chennai Petroleum’s fund raising task, it will ensure Iran maintains its grip in India, where surging fuel demand has turned it into a prized market for global oil producers.

For India, Tehran has been a reliable and cheap source of crude extending favorable credit terms, a key driver for New Delhi to convince Washington to grant some exemption from sanctions that restrict trade with the country, the newspaper noted.

The US has announced re-imposition of the “toughest” sanctions ever against Iran in an attempt to curtail the Islamic Republic’s oil exports and put extra pressure on the country's economy.

The US President Donald Trump started the the second wave of sanctions against Islamic Republic of Iran from November 5 in which a global ban on the country’s oil exports was cited as a primary objective.

India has declared an increase in oil imports from Iran in October in face of US sanctions that officials in American earlier said were meant to bring the Islamic Republic’s crucial sales of oil to zero.

India’s official figures indicates the country imported as much as 2.57 million tons of oil worth an overall of $1.42 billion from Iran over the past month.

The figure registered an increase of 36 percent over the same period last year when a total of 1.89 million tons were shipped to India from Iran’s Persian Gulf ports.

India is the second largest importer of Iranian oil after China, importing 17.62 million tons of oil between April and October of this year.

Washington has temporarily exempted Turkey, China, India, North Korea, Italy, Greece, Taiwan, and Japan from the ban it imposed on countries buying Iranian oil.

India had imported about 22 million tons of crude oil from Iran in 2017-18 and planned to raise that to about 30 million tons in 2018-19.

Indian companies can import 1.25 million tons a month up to March 2019, according to media reports.
Follow us on Twitter @IrnaEnglish