Italy Refiner to Clear Iran Oil Debt in 2017

Italian oil refiner Saras has paid $177 million of the debt it owes Iran for crude oil bought before sanctions were imposed and its chief financial officer said the total debt to Tehran will be cleared next year.

Analysts have estimated the company’s Iranian debt at about $400 millions and the company said it paid $55 million in the second quarter and $116 million in the third, Reuters reported.

“A further $110 million will be paid by yearend,” CFO Franco Balsamo told analysts in a conference call on Monday’s third-quarter results. “The rest will be paid in 2017.”

International financial sanctions on Iran were lifted in January after a deal over nuclear weapons development, though banking ties remain restricted.

Over the past nine months, Tehran has received billions of dollars from the likes of Shell, Greece’s Hellenic Petroleum, Italy’s Saras and Indian refiners in exchange for crude oil it sold under the spell of sanctions.

Saras, which is partly owned by Russian oil giant Rosneft, used to take a significant part of its feedstock from Iran before the embargo. The company reported third-quarter core earnings of $106.5 million, below a company-supplied consensus forecast of $38 million.

General Manager Dario Scaffardi said the worse than expected result was because the company had opted to stockpile gasoil for sale in the fourth quarter when it expects prices to be higher.

“October was extremely positive and November has started with a bang,” Scaffardi said. “All in all I’m pretty positive on the latter part of the year.”