June 5, 2018 / 12:59 PM / 6 months ago

India's Nayara sees no problem in replacing Iranian oil, if required

LONDON (Reuters) - Indian private refiner Nayara Energy, a key buyer of Iranian oil, is prepared to replace Iranian oil if required under U.S. sanctions and hopes to settle dues owed to Tehran for past purchases ahead of a November deadline, its chief executive said.

Uncertainties cloud Iran’s oil exports after U.S. President Donald Trump abandoned a 2015 nuclear agreement this month and ordered the re-imposition of U.S. sanctions on Tehran.

Some sanctions take effect after a 90-day “wind-down” period ending on Aug. 6, and the rest, notably on the petroleum sector, after a 180-day “wind-down period” ending on Nov. 4.

Nayara, formerly known as Essar Oil, would leverage the vast network of its promoters - Russia’s Rosneft and trader Trafigura, to replace Iranian oil, if required under the U.S. sanctions.

“After the shareholding management changes there have been constant interactions with a wide range of suppliers leveraging on our respective shareholder network. For us that’s not a concern,” B. Anand said on the sidelines on the Platts Global Crude Oil Summit in London.

The company operates a 400,000 bpd sophisticated refinery at Vadinar in the country’s west coast.

Anand said his firm was in constant discussions with alternative suppliers of crude.

He added that they would prefer a lot heavy and ultra heavy crudes, “that will fetch you the best economics”.

Rosneft, Russian fund UCP and Swiss commodities trader Trafigura bought Essar Oil for $12.9 billion last year.

Anand declined to comment on the company’s plans on its imports of Iranian crude for the remainder of the year saying they are “assessing the situation as it unfolds”.

In April, Anand said the company was aiming to buy 120,000barrels per day (bpd) of oil from Iran in 2018/19, the same as the previous year, adding his company was receiving the same concessions as state-owned Indian refiners for Iranian oil purchases.

Anand also said he “most likely” expected Nayara to repay outstanding debt to Iran before the Nov. 4 deadline when the180-day “wind-down period” of U.S. sanctions on Iran comes to an end.

The company settled about 2 billion euros ($2.3 billion) in dues to Iran to cover previous oil purchases and still owes around 500 million euros.

Reporting By Shadia Nasralla and Ahmad Ghaddar; editing by David Evans

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