Efforts Underway to Collect Shell’s $1.3b Debt

Efforts Underway to Collect Shell’s $1.3b DebtEfforts Underway to Collect Shell’s $1.3b Debt

Iran's Bank Mellat is making efforts to open an account for the National Iranian Oil Company in an unnamed European bank to facilitate the transfer of Royal Dutch Shell's $1.3 billion outstanding oil debt to the NIOC.

Citing the public relations department of Bank Mellat, ISNA said on Monday the privately-run bank has opened accounts in several financial institutions in Asia and Europe to fast-track the receipt of billions of dollars in Iran's blocked revenues.

Broad international sanctions imposed on Iran during 2010-13 over its nuclear energy program cut its oil exports from around 2.5 million barrels a day in 2011 to little more than 1 million bpd.

Financial restrictions also cut off Iran from the global banking system, hampering the Persian Gulf country's ability to receive money from its crude buyers.

According to the US Treasury Department, sanctions cost Iran over $160 billion in oil revenues since 2012.

But the implementation of Iran's nuclear agreement on January 16 gave Iran the leeway to pursue its frozen petrodollars.

Tehran's nuclear accord, officially known as the Joint Comprehensive Plan of Action, came into effect six months after it reached a monumental agreement with six world powers to place time-bound limits on its nuclear program in exchange for sanctions relief.

Iran has started to cash in on some of its blocked oil revenues in the past few months.

In September, India settled $1.4 billion in oil debts to Iran in two equal installments through the Indian bank UCO. Indian refiners owed about $6.6 billion to Iran as of the end of August. Essar Oil owes about $3.1 billion, Mangalore Refinery and Petrochemicals Ltd $2.8 billion, followed by Indian Oil Corp, which owes $581 million to the Iranian government.

Greece's biggest refiner Hellenic Petroleum also said last week it would start buying oil from Iran immediately after settling its multimillion dollar outstanding debt to NIOC.

The refiner is estimated to owe Iran around $550-600 million for oil it bought before the sanctions, but was unable to pay when the international embargos were imposed.