Iran asks India for $1.5 bln in oil payments under nuclear deal -sources

Thu Feb 13, 2014 7:12am EST

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* Indian refiners holding payments of about $3 bln
    * Iran may want payment via central bank's Swiss, German
account -sources

    By Nidhi Verma
    NEW DELHI, Feb 13 (Reuters) - Iran has asked India for $1.5
billion in back oil payments under the nuclear deal that
provides Tehran some relief from Western sanctions, Indian
sources with direct knowledge of the matter said on Thursday.
    If the payments are approved, this could make India the
third of Iran's major buyers, after Japan and South Korea, to
start processing frozen back payments. The payments are
contingent on Iran holding to its agreement to start curbing its
nuclear programme.
    Indian refiners are holding about $3 billion in payments due
the Middle Eastern crude producer, one of the sources said.
Other funds owed to Tehran are held in a rupee-denominated
account at India's UCO Bank.     
    Under the Nov. 24 agreement with six major powers, Iran won
access to $4.2 billion of its oil revenues frozen abroad. The
fund will be paid out in eight money transfers on a schedule
that started with a $550 million payment by Japan on Feb. 1.
 
    South Korea is set to make two payments in March totalling
$1 billion, banking sources said on Wednesday, and the next
scheduled tranche of oil funds would come on April 10.
 
    "Out of the $4.2 billion they have sought $1.5 billion from
us," one of the sources said.
    Tehran has already submitted requests to the United States
for funds from each of its four major Asian buyers - Japan,
South Korea, India and China, this source said. 
    The sources, who requested anonymity because of the
sensitivity of the issue, said they did not yet know the timing
and the banking mechanism to be used. But they said the payments
will be from the dollar funds held by refiners.    
    Tehran is allowed to receive $450 million on March 1 if it
satisfies targets set down in the November deal, according to
the payment schedule. It can then receive two further tranches
of $550 million on March 7 and April 10 without having to meet
further conditions.
    Payments from April 15 would be contingent on confirmation
that Iran has kept to its commitment to dilute all of its 20
percent enriched uranium to no more than 5 percent enriched
uranium. 
    Iran may want funds from India to be delivered into its
central bank's account in Switzerland or Germany, the industry
sources said, even though refiners have taken steps to revive a
previous payment route through Turkey's Halkbank.
    The four Asian buyers of Iran's crude - China, India, Japan
and South Korea - together cut oil imports from Iran by 15
percent to an average of 935,862 barrels per day (bpd) in 2013,
according to government and industry data, as they sought to
avoid falling foul of the U.S. and European Union sanctions.  
 
    Iran's crude exports are around 1 million bpd and the
November deal opens a door for lifting shipments in the future.
    The following is a table outlining the payments totalling
$4.2 billion and their conditions to Iran following the November
agreement.
        
 Feb 1    $550 mln   Paid, transferred from Bank of Japan
 Mar 1    $450 mln   Contingent on confirmation of dilution of
                     half of Iran's stockpile of near-20%
                     enriched uranium it is required to dilute
 Mar 7    $550 mln   
 Apr 10   $550 mln   
 Apr 15   $450 mln   Contingent on confirmation dilution of
                     the rest of Iran's stockpile of near-20%
                     enriched uranium it is required to dilute
 May 14   $550 mln   
 Jun 17   $550 mln   
 Jul 20   $550 mln   Contingent on confirmation Iran has
                     fulfilled all of its commitments
 
 (Editing by Jo Winterbottom, Amran Abocar and Tom Hogue)
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