Iran’s NICO tasked to resume crude oil swap

Business Materials 1 June 2016 12:30 (UTC +04:00)

Baku, Azerbaijan, June 1

By Fatih Karimov - Trend:

The National Iranian Oil Company (NIOC) tasked Naftiran Intertrade Company (NICO) to prepare grounds to resume crude oil swap with Caspian Sea littoral states as soon as possible, Hamid Reza Shahdoust, an official with the NIOC, said.

NICO, a subsidiary of the NIOC was tasked with crude oil swap operations during the former administration and will resume the halted swap operations under the decree, Shahdoust, who is North Oil terminal manager at NIOC, said, oil ministry's SHANA news agency reported June 1.

Iran's route for oil swap is more safe and economic in comparison with other paths, he said, adding talks are underway with Caspian littoral states on the issue.

"Kazakhstan and Azerbaijan are interested in transferring some part of their crude oil to the global markets through Iran," Shahdoust said.

Earlier, Pirouz Mousavi, the managing director of the Iranian Oil Terminals Company (IOTC), said that Russia and Kazakhstan have expressed readiness to resume crude oil swap with Iran.

"The IOTC has the capacity to swap 200,000 barrels of crude oil per day," Mousavi said.

Meanwhile, the head of the Department of International Affairs of the NIOC, Mohsen Ghamsari said previously that the former counterparts do not trust Tehran yet on oil swap. In 2010, Iran stopped oil swaps with Kazakhstan, Turkmenistan and Azerbaijan.

The Hague International Court of Justice fined NICO of Iran $5.5 million due to stopping the swap of oil with its international partners. Under oil swap agreements, which started in 1997 and were in place for over 12 years, Iran received crude oil of Azerbaijan, Kazakhstan and Turkmenistan in the Neka port and delivered an equal volume to the clients of the same countries in Persian Gulf.

The total income received by Iran from these swap transactions from 1997 to 2009 amounted to about $880 million.