* Minister says business with Iran will continue
* India oil official says not cutting Iran imports
* India delegation in Iran Jan 16-21 for talks
By Abhijit Neogy and Nidhi Verma
NEW DELHI, Jan 12 India will keep doing
business with Tehran and sees no reason to seek a waiver from
the United States that would protect buyers of Iranian oil from
a fresh round of sanctions, a senior Indian cabinet minister
said on Thursday.
"Why should we seek waiver from the U.S.? We have done
business with Iran earlier and will continue to do business,"
the minister, who has knowledge of the matter but did not want
to be named as the issue is confidential, told Reuters.
The minister said government officials would visit Iran next
week and find ways to pay for oil in light of U.S. financial
measures designed to block the trade.
The minister's comments echo industry sources who told
Reuters on Wednesday New Delhi may not seek a waiver from the
sanctions, as the government appeared to believe the 120-day
exemption would not offer a lasting solution.
Other major buyers of Iranian crude such as Japan and South
Korea do intend to secure such waivers.
The United States and its allies in Europe and elsewhere are
putting pressure on Iran to curb a nuclear programme they worry
is aimed at developing an atom bomb. Iran says its goal is to
produce nuclear power.
New U.S. laws, authorised on Dec. 31, make it even tougher
for financial institutions to deal with Iran's central bank, the
main clearing house for the country's oil payments.
The laws allow waivers to firms in countries that
significantly reduce dealings with Iran, or at any time when it
is either in the U.S. national interest or necessary for energy
The sanctions have faced India with a dilemma as it strives
to balance the need to keep importing about $12 billion of
Iranian crude annually without upsetting ties with Washington.
A different senior Indian official said on Thursday a final
decision on whether to seek a waiver had not yet been made and
would depend partly on the outcome of next week's trip to Iran.
The decision would also depend on whether India could find
adequate alternative sources of oil.
Options being looked at to cope with the U.S. measures
include payment in Indian rupees or a trade barter system, the
Officially the Indian government says it has not asked
refiners to reduce imports from Iran but companies are already
seeking alternative supplies, fearing an existing payment
conduit for Iranian oil could snap under sanctions pressure.
Previous sanctions already made it harder for India to
import the 350,000-400,000 barrels per day (bpd) it buys from
Iran, about 12 percent of its oil needs. In 2010, the central
bank scrapped a long-standing clearance mechanism, triggering a
scramble by importers to find a new way to pay.
Since last year, Turkey's Halkbank has routed India's
payments to Iran, but that conduit is seen by the government as
unstable in the face of the latest sanctions.
Halkbank has already refused to open an account for
state-run Bharat Petroleum Corp for oil from Iran.
The Indian delegation including officials from the central
bank and the finance ministry will visit Tehran from Jan. 16-21
to explore alternative routes of payment to ensure supplies
without breaching sanctions.
"This a technical issue but I am confident they will find a
solution and a payment mechanism option soon," the Indian
Earlier on Thursday an Indian oil ministry official denied
comments to Reuters from industry sources saying the government
had asked refiners to reduce Iranian oil imports, adding the
existing mechanism through Turkey was working but that India was
also looking for alternative supplies.
He did not explain why India was looking for alternative
supplies. Indian refiners have gradually started
buying more from sources such as Saudi Arabia, Iraq and the
United Arab Emirates.