Gov't to Pay $1.2b to Private Oil Contractors

Gov't to Pay $1.2b to Private Oil ContractorsGov't to Pay $1.2b to Private Oil Contractors

The government is keen to pay around $1.2 billion of its debt to private oil contractors in the current Iranian year (ending March 19, 2016), head of the Society of Iranian Petroleum Industry Equipment Manufacturers said on Sunday.

Reza Padidar estimated that the government's total debt to private domestic contractors in the oil sector's maintenance and development projects amounts to nearly $5.4 billion.

"The time of payment is still unclear," Padidar was quoted as saying by ILNA.

The exact amount of government debt to private oil contractors is not known, but the Oil Ministry's figures suggest the government apparently owes a larger sum to energy contractors compared to its multibillion dollar debt to private oil contactors. The government unveiled a plan of action last week as part of efforts to stimulate economic growth and help lift the sagging manufacturing sector.

According to reports, President Hassan Rouhani's administration is planning to clear roughly $11.6 billion of its debt to private contractors.

The move comes as Indian refiners reportedly paid $1.4 billion of oil dues to the Persian Gulf country over the past month. The sum was paid in two $700 million installments.

The historic July 14 nuclear agreement in Vienna between Iran and six world powers has allowed the Islamic Republic to make headways in receiving a part of its frozen assets.

Iran has over $100 billion frozen overseas. Most of the funds are oil revenues—Iran’s main export—but a portion belongs to Iranian companies.