NEW DELHI: MRPL is preparing to resume oil imports from Iran, after stopping in April, having secured local reinsurance for claims of up to 5 billion rupees ($84.14 million), its managing director said in a letter seen by Reuters.
Mangalore Refinery and Petrochemicals Ltd, which was Iran's top Indian client, halted imports because local insurers said they could no longer cover plants that process Iranian crude.
"...MRPL would take all necessary steps for recommencement of import/processing of Iranian crude oil in its refinery," MRPL P.P. Upadhya wrote in a June 29 letter to Oil Secretary Vivek Rae.
Upadhya referred in the letter to meetings with officials from the oil ministry and local reinsurer General Insurance Corp. (GIC) in the letter, copy of which was made available to Reuters, for the plan to resume imports from Iran.
U.S. lawmakers are embarking this summer on a campaign to deal a deeper blow to Iran's diminishing oil exports, and analysts say the ultimate goal could be a near total cut-off.
But India last month won a 180-day waiver from U.S. sanctions after New Delhi significantly reduced purchases of oil from Iran. In the last fiscal year to March 2013 it imported 26.5 percent less oil from Iran.
The sanctions from Washington and from the European Union aim to block Tehran's oil revenue over its disputed nuclear programme, which they suspect is aimed at building weapons. Iran denies this claim.
GIC said that "as long as the waiver on import of crude oil from USA exists, it is very likely that the overseas reinsurers would not refuse the claim whenever it arise, even though the implication of waiver is not clear," the letter said, citing a June 27 meeting with GIC.
GIC would be able to settle any claim up to 5 billion rupees, so far the maximum that has arisen in Indian refining sector, without depending on overseas reinsurers, Upadhya wrote.
"GIC pointed out that in such a scenario, a calculated business risk may be taken by MRPL, similar to what is being taken by Essar, if they desire to recommence processing of Iranian crude oil at their refinery," Upadhya wrote in the letter.
Essar continued to import oil from Tehran, after taking a legal advice that sanctions by European Union, where most of the reinsures are located, were not applicable.
Upadhya, who had earlier said MRPL plans to import 80,000 barrels per day in the current fiscal year, declined to comment on the letter.