Reliance buys Iranian oil after a six-year break

Reliance Industries has bought crude oil from Iran after a six-year break and is looking to strike a long-term fixed quantity deal, post lifting of sanctions.

RIL, which operates the world's biggest refining complex at Jamnagar in Gujarat, is looking at quickly ramping up purchases to the earlier levels of about five million tonnes a year.

"Re-established relationship with Iran, sourced crude oil post lifting of sanctions," the company said in an investor presentation after reporting 2015-16 earnings.

Bowing to international pressure to isolate Iran over its nuclear programme, Reliance Industries Ltd (RIL) in January 2009 had stopped exporting gasoline or petrol to Iran. And from February 2010, it stopped buying crude oil from the West Asian nation.

RIL, which has substantial investments in the US shale gas projects, besides being a big supplier of fuel, shelved its business with Iran over fears of being sanctioned.

With sanctions on Iran ending in January this year, RIL has re-established its ties with the country.

Its joint CFO V Srikanth, in a press briefing in Mumbai on Friday, said the company is engaged in talks with Iran for bigger supplies, including a term or annual fixed quantity contract.

"We have had engagements with Iran before the sanctions and they have grades of crude that are attractive to us," he added.

Mangalore Refinery and Petrochemicals Ltd (MRPL) and Essar Oil are the main buyers of Iranian oil in India, importing between them about 10 million tonnes a year.

Besides, Indian Oil Corporation (IOC) is looking at doubling imports from Iran to four million tonnes this year. Hindustan Petroleum Corporation Ltd (HPCL) too may pick up small quantities this year.

Soon after, Iran reached a deal with western nations on curbing its nuclear programme in exchange of lifting of sanctions in July last year, a top RIL official had stated that RIL would look again at starting petrol and diesel exports to the Persian Gulf nation.

Nearly 63% of the oil products from RIL's refining complex at Jamnagar, with a total capacity of 62 million tonnes, are currently exported.

RIL ships petrol to the Middle East, the US, South-East Asia and Australia while diesel is exported to Europe, Africa, South East Asia, the investor presentation said. "Successfully placed a product into key markets of Turkey, East Africa and Australia," it said.

Domestically, it has operationalised 950 out of the 1,400 petrol pumps it has at present. "Achieved highest retail outlet throughput of about 240 kilolitres per month in March 2016 compared to all key competitors," the presentation said.