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Official: Iran to Revive Oil Swap Deals with Foreign Companies

August 15, 2014

TEHRAN (FNA)- Foreign firms are slated to resume oil swap deals with Iran in the near future, a senior energy official said.

"The Oil Minister (Bijan Namdar Zanganeh) ordered resumption of oil swap contracts with foreign companies," Adviser to Oil Minister Mahmoud Astaneh told reporters on Thursday. He noted that Iran gained a total of $880 million between 1999 to 2009. Iran started crude oil and oil products swaps with its neighboring countries, mainly with land-locked littoral states in the Caspian Sea region in 2000 but former administration under President Mahmoud Ahmadinejad decided to halt this kind of trade with neighbors. In February, Zanganeh complained of ambiguities in Iran's Oil swap deals, and said taking any firm decision on resuming oil swaps requires removal of such uncertainties. "We won't take any step toward oil swaps operations unless the uncertainties to be removed," Zanganeh told the oil ministry's website. In March 2014, Iranian Deputy Oil Minister Ali Majedi invited foreign firms to resume oil swap deals with Iran, and said Tehran has considered more flexible contracts to attract foreign investors. "We are looking for reviving swap deals and we invite the foreign companies willing to work with us in this field," Majedi said. Iran had swap deals with Central Asian countries, but it was halted in August 2010. In January, Head of the National Iranian Oil Products Distribution Company (NIOPDC) Abbas Kazzemi announced that his company has decided to boost fuel swaps with the neighboring countries, including Pakistan and Afghanistan, in a bid to curb fuel smuggling. Kazzemi said that the company is involved in drafting guidelines for supervision and curbing fuel smuggling. "These guidelines will reduce smuggling to a great extent", the official said. He further said that fuel price gap between Iran and its neighboring countries was another factor that lures smuggling. "Even though gasoil and gasoline are distributed through fuel smart cards but moving toward applying a single price system will massively reduce fuel smuggling", Kazzemi noted.          

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Source: FARS News Agency

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