Cash problems hamper plans for expansion to Iran oil agreement

Cash problems hamper plans for expansion to Iran oil agreement

Tehran is interested in expanding an agreement between the National Iranian Oil Company (NIOC) and Hellenic Petroleum, both in terms of crude oil quantities and of products, according to comments made last week by Iranian Deputy Foreign Minister Majid Takhty Ravanchi during a visit to Athens and meetings with Greek government officials.

The Iranian diplomat also informed Athens that his country’s Energy Ministry has approved the provisional agreement signed by NIOC and Hellenic Petroleum in January, while it was agreed that the final deal between the two companies would be signed in Tehran, probably next week.

Ravanchi expressed his satisfaction with the response of the Greek oil company to the implementation of the deal with NIOC for two loads of 1 million tons of crude oil per month and the gradual repayment of Hellenic Petroleum’s debts to NIOC, amounting to $600 million. Iran has so far received $400 million, paid in cash due to the reluctance of European banks to approve payments to Iraq (in spite of the lifting of the embargo) and due to the non-recognition by Iran of the letters of guarantee by Greek banks.

In an effort to overcome these obstacles and increase the Iranian crude quantities, the Greek side has proposed that Iran either accept the letters of guarantee from the National Bank of Greece or open an Iranian bank branch in Athens to serve transactions between the two countries, as well as those between Iran and other European Union states.

Sources say that the process for opening an Iranian bank in Athens is already at an advanced stage, though international developments in the credit sector due to the forthcoming exit of Britain from the European Union have delayed progress. People close to the effort say that although this plan is mature enough, it will not proceed further before the US election, whose result could overturn positive developments related to Iran’s return to international markets.

Ravanchi also expressed his country’s interest in refining Iranian oil at the installations of Hellenic Petroleum for Tehran but the Greek company rejected this proposal as it does not have the necessary capacity.

A statement by the Greek Energy Ministry added that Ravanchi’s meeting with Minister Panos Skourletis also focused on possible cooperation in the fields of liquefied natural gas (LNG), renewable energy sources and energy saving. The two sides agreed to examine – through a joint committee – the export to Iran of petrochemicals produced at Hellenic Petroleum’s refineries.

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