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Iran May Invest In Chennai Petroleum Expansion: Indian Oil

Indian Oil chairman Sanjiv Singh said that Iran has not ruled out participating in the expansion at Chennai Petroleum Corp.

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Iran May Invest In Chennai Petroleum Expansion: Indian Oil

Indian Oil has said a detailed feasibility report for the expansion has yet to be prepared


New Delhi: 

Highlights

  1. IOC says Iran hasn't ruled out participation in Chennai unit expansion
  2. Government has exempted rupee oil payments to NIOC from a withholding tax
  3. That will allow country's refiners to settle $1.5 billion of dues

Indian Oil Corp, the country's biggest refiner, said on Wednesday that Iran may still invest in a refinery expansion project at one of its subsidiaries.

Indian Oil chairman Sanjiv Singh said that Iran has not ruled out participating in the expansion at Chennai Petroleum Corp, a 20,000 barrels per day (bpd) refinery.

Iran's participation has been questioned after Indian refiners cut back their Iranian crude oil imports following US sanctions.

However, Mr Singh's comments come a few days after the government exempted rupee payments to the National Iranian Oil Co (NIOC) for crude oil imports from a withholding tax.

The exemption will allow domestic refiners to settle about $1.5 billion of outstanding payments to NIOC through direct rupee payments.

It has been expected that these payments could help Iran invest in Indian projects, particularly the Chennai Petroleum Corp expansion.

"Iran has always been positive with this (the new rules). I think they should be able to invest," Mr Singh told news agency Reuters, following a media conference on Wednesday.

Chennai Petroleum plans to invest up to Rs 35,698 crore ($5.1 billion) to replace the 20,000 bpd Nagapattinam refinery in Tamil Nadu with a 1,80,000 bpd plant.

Naftiran Intertrade, the Swiss subsidiary of National Iranian Oil Company, holds a 15.4 per cent stake in Chennai Petroleum, while Indian Oil has about a 52 per cent share.

Mr Singh said a detailed feasibility report for the expansion has yet to be prepared.



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