NEW DELHI: Indian refiners have been told to prepare to pay Iran $1.4 billion in oil dues, two sources with knowledge of the issue said, in one of the first signs that last month’s nuclear deal is helping Tehran unlock frozen funds.

The landmark nuclear deal between Iran and six major world powers was struck on July 14 and sanctions could begin to be removed later this year if UN inspectors confirm Tehran is complying with its provisions.

Indian Finance Secretary Rajiv Mehrishi asked refiners this month to prepare to pay Tehran two instalments of $700 million, part of the money owed for oil imports, said the sources, who declined to be identified due to the sensitivity of the issue.

Head of finance at Indian Oil Corp A.K. Sharma said the first instalment could be made this month although the finance ministry has yet to instruct refiners on the specific timeline for payments.

“Some payment may happen this month. We are waiting for instruction (from the finance ministry),” Sharma told reporters.

He did not specify the size of the first instalment but estimated his company’s share in the initial tranche would be $60-$70 million, in proportion with IOC’s share of more than $6.5 billion in Iranian oil revenue stuck with local refiners.

Iran is desperate for funds and investment to help its economy, crippled by decades of sanctions.

Published in Dawn, August 14th, 2015

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