January 22, 2016 / 1:29 PM / 3 years ago

Greece to restart crude oil purchases from Iran

ATHENS (Reuters) - Greece’s biggest oil refiner Hellenic Petroleum agreed on Friday to buy crude oil from the National Iranian Oil Company (NIOC), the first European refiner to restart trade relations with Iran after the lifting of international sanctions.

Newly appointed Energy Minister Panos Skourletis addresses the media before a swearing in ceremony at the Presidential Palace in Athens, Greece, July 18, 2015. REUTERS/Yiannis Kourtoglou

Hellenic Petroleum was a major buyer of Iranian crude, which accounted for about 20 percent of the southeast European country’s annual crude oil imports before sanctions were imposed on Tehran in 2011.

The agreement came after Iran’s Deputy Oil Minister Amir Hossein Zamaninia and his Greek counterpart Panos Skourletis met in Athens on Friday.

The two ministers also attended talks between executives from Hellenic Petroleum and NIOC, a meeting reported by Reuters on Jan. 18.

Under the deal, the refiner will start buying oil from Iran immediately and will settle its multi-million euro outstanding debt to NIOC, Hellenic Petroleum said in a bourse filing.

Hellenic Petroleum is estimated to owe Iran around $550-600 million for oil it bought before the sanctions but was unable to pay when the international embargo was imposed.

“The deal was achieved after consecutive meetings in Athens and Tehran,” Hellenic Petroleum said. “The deal is beneficial for both sides.”

After meeting Zamininia, Skourletis told Reuters Iran believed Greece could be a conduit for re-entering Europe’s oil market.

“They (Iran) are positively disposed towards Greece and think that Greece can be the European conduit for them to re-enter the market,” he said, adding that the two countries had traditionally enjoyed close relations.

“They (Iran) said that the debt (settlement) can open the way so that our cooperation is boosted,” Skourletis said, adding that Greek Prime Minister Alexis Tsipras was due to visit Iran early next month.

Iran used to sell as much as 800,000 barrels per day (bpd) to European refiners in Italy, Spain and Greece before the sanctions over its nuclear program were imposed.

Tehran ordered a 500,000-bpd increase in its oil output, of which 200,000 bpd will go to Europe, after the sanctions were lifted on Saturday.

But European companies and trading houses are not rushing to buy the oil because of legal uncertainties over the lifting of sanctions that are likely to take weeks to clarify.

Reporting by Angeliki Koutantou; Editing by Mark Potter and Elaine Hardcastle

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