Polish Refiner, NIOC Discuss Crude Export Deal

The National Iranian Oil Company’s director for international affairs says the company is in talks with Poland's Lotos to finalize a long-term oil sales deal.

“Lotos has already received 2 million barrels of crude oil from Iran in a spot delivery,” Mohsen Qamsari was quoted as saying by Mehr News Agency on Saturday. According to the official, due to protracted negotiations, no contract has been signed yet.

Presently a quarter of Iranian crude oil export goes to Europe, he added, stressing that outbound gas condensates are destined solely to Asian markets.

"Polish refiner Lotos can sign a long-term oil deal with Iran after receiving its first supplies from Iran last month," Marcin Jastrzebski, the deputy head of Lotos said, noting that two tankers carrying 2 million barrels of oil from Iran arrived at the port of Gdansk on the Baltic Sea in mid-August.

"After the Iranian oil is refined, we will have detailed results of the analysis, which will confirm whether we will ultimately sign a long-term agreement with Iran on oil supplies to Gdansk," Jastrzebski said at the time.

Poland imports most of its oil and gas from Russia, but wants to reduce that dependence. Lotos' bigger rival PKN Orlen signed an oil supply deal with Saudi Aramco earlier this year.

Lotos has said that 25% of the oil it refines comes from sources other than Russia.

Poland has moved to diversify its energy supplies by shipping in crude oil from Arab brands as well as African crude and Azeri Light. In related news, NIOC has finalized a deal to export 1 million barrels of oil to Hungary's MOL in November.

The MOL Group operates refineries in Hungary, Slovakia and Croatia. It also has exploration and production assets in the North Sea and other countries, including Pakistan and Iraq. The oil export deal came after several rounds of negotiations between the two sides.

Iran has been ramping up oil production and export, aiming to regain market share after international sanctions over its nuclear program were lifted in January. It is currently producing slightly above 3.8 million barrels a day, according to government data.