* Made loss on Iranian oil trading shortly before embargo
* Cannot pay $2.3 bln to Tehran due to sanctions
* Previous attempts to settle debt failed to get approval
By Dmitry Zhdannikov
LONDON, March 20 Oil major Royal Dutch Shell
lost money trading Iranian crude in 2012 shortly before
a European Union embargo and still owes $2.3 billion to Tehran
for oil purchases.
The details, revealed in Shell regulatory filings, is the
first disclosure of its dealings with Iran in 2012, when it kept
buying Tehran's oil right up to the mid-year EU embargo
The loss raises questions about Shell's decision to continue
trading with Iran in the first half of 2012, taking advantage of
an exception for pre-existing contracts, when many of its rivals
The firm said its trading division generated a gross revenue
of $481 million in 2012 on Iranian oil purchases and a net loss
of $6 million. Condensate and fuel oil purchases from Iran
generated a gross revenue of $631 million and a net profit of $4
million, failing to compensate for the loss in crude.
"None of these purchases has been paid for, and all
contracts were terminated and activities ceased before June 28,
2012," said Shell referring to the date when sanctions on
Iranian oil came into force.
"Currently, we have approximately $2,336 million payable to,
and $11 million receivable from, National Iranian Oil Company.
We are unable to settle the payable position as a result of
applicable sanctions," Shell said.
Shell suspended all trade with Iran before June but failed
to settle its accounts with the National Iranian Oil Company
(NIOC) ahead of the embargo, which was imposed as part of the
West's standoff with Iran over Tehran's nuclear programme.
Shell ceased upstream activities and suspended new business
developments in Iran back in 2010 and is closing its
representative office in Iran, it said.
Shell said it would not comment further on its trading with
Iran in 2012 and could not comment on how it planned to repay
its debt to Tehran.
Industry sources previously told Reuters the company was
working on a number of options including a grain barter deal via
U.S. agribusiness giant Cargill.
The deal was blocked by authorities in Europe and the United
States. It came after Shell was denied permission by the British
government to pay Tehran direct via bank transfer. Sanctions bar
European banks routing payments for oil back to Iran.
Shell was among critics of the EU embargo with its chief
executive Peter Voser saying last year that "from a pure
commercial prospective" EU consumers would be the main losers
because the embargo would mean higher prices.
While oil prices recorded an all-time high average in 2012
of above $111 a barrel, prices fell from a peak near $130 in
April after Saudi Arabia opened the taps and a boom in U.S.
shale oil production offset fears about the loss Iran's supply.
Iranian output more than halved to around 1 million bpd,
down from 2.5 million bpd before the sanctions.
At the beginning of 2012, chief executive of Shell's rival
Total, Christophe de Margerie, also cast doubt about
sanctions, saying Iran would reroute its oil to other markets.
Total stopped buying Iranian oil at the start of 2012
despite buying big volumes in 2011, when it purchased 49 million
barrels of oil and refined products worth 3.7 billion euros
Italy's Eni purchased over 7 million barrels of
Iranian oil in 2011 paying $742 million.