The Hague fines Iran’s NICO $5.5 mln in oil swap dispute

Photo: The Hague fines Iran’s NICO $5.5 mln in oil swap dispute / Iran

Baku, Azerbaijan, June 16

By Fatih Karimov - Trend:

The Hague International Court of Justice has fined Naftiran Intertrade Company (NICO) of Iran $5.5 million due to stopping the swap of oil with its international partners.

An informed source told Iran's IRNA news agency that The Hague issued the verdict on June 14.

One of the partners, Caspian Oil Development, had requested $97 million as compensation, the source said, adding that Vitol Company and some other partners have abandoned their complaints against NICO.

Iran had signed deals with Select Energy Trading, Dragon Oil of the UAE, Vitol of Switzerland, and Caspian Oil Development of Ireland, to swap crude oil from Kazakhstan and Turkmenistan.

On August 19, 2013, the chairman of the Iranian parliament's energy committee Masoud Mirkazemi, who also served as the oil minister for 1.5 years during the second term of Mahmoud Ahmadinejad's presidency, said that NICO may be involved in a fraud case, which was related to an oil swap.

At that time, Mirkazemi said that three years after stopping crude oil swaps, Caspian Oil Development filed a complaint against NICO for $100,000 compensation due to unilateral cancelation of its deal.

NICO is a subsidiary of the National Iranian Oil Company and was tasked with crude oil swap operations.

Mirkazemi also said that the then managing director of the National Iranian Oil Company had ordered a reduction of the national oil output by 300,000 barrels per day.

He said that officials had referred to "problems in sales" as the main reason, but he found out later that 150,000 barrels of oil had been sold by European firms, which have invested in Iran's northern regions, to another company.

That was not a kind of a swap, because the same amount of oil had not been delivered to European firms at Kharg port, in the south of the country, he said.

Follow us on Twitter @TRENDNewsAgency