Talks Underway to Buy Essar Stakes

Talks Underway to Buy Essar StakesTalks Underway to Buy Essar Stakes

The National Iranian Oil Company has started a new round of negotiations to buy the stakes of a refinery owned by India’s Essar Oil as part of a long-term supply deal, managing director of the National Iranian Oil Refining and Distribution Company said on Tuesday.

"The purchase of large oil refineries' stake tops NIOC's priority list in post-sanctions era," Abbas Kazemi was quoted as saying by Mehr News Agency.

Kazemi noted that new rounds of negotiations are underway to buy refineries' share from across the world, especially in India, Europe and South America.

The official stressed that the most important reason for embarking on such a venture is to guarantee Iran's crude delivery to international markets in the long run.

"NIOC is doing its best to invest in foreign refineries so that Iran's oil can be refined overseas due to its economic viability," he said.

Essar has a global portfolio of onshore and offshore oil and gas blocks, with about 35,000 sq km available for exploration. It has about 700,000 barrels per stream day of global crude-refining capacity. In marketing, the company operates a network of over 1,400 retail outlets across India, with another 600 under various stages of commissioning.

Underlining intense negotiations with different Indian refineries to purchase their stakes, Deputy Oil Minister Rokneddin Javadi said, "Buying India’s Essar Oil is well underway."

Endorsing talks with African, Asian and European refineries, Javadi emphasized that Iran's crude must be transferred to markets whose customers are loyal and regular.

"Plans have been made so that Iran's crude has a strong presence not only in consumers' markets but also in international commercial markets," he said.

India's oil imports from Iran fell 41.5% in October from a year ago to the lowest in seven months, according to tanker arrival data obtained by Reuters.

India, the world's fourth-biggest oil consumer, bought 21.8% less Iranian crude for January-October at about 212,600 barrels per day, the data also showed.

The Essar Oil refinery produces LPG, Naphtha, light diesel oil, jet fuel and kerosene. It has been designed to handle a diverse range of crude—from sweet to sour and light to heavy. It is supported by an end-to-end infrastructure setup, including single buoy mooring, crude oil tanker facility, water intake facilities, a captive power plant, product jetty and dispatch facilities by both rail and road.

Essar's exploration and production business has 2.1 billion barrels of oil equivalent of reserves and resources.

Oil prices edged up on Monday and front-month Brent Crude prices were up 34 cents at $44.81 a barrel.