India on Monday committed Iran that it would remain engaged in lifting crude oil from the Persian Gulf nation and that its refiners would be encouraged to increase their purchase once the US decision on extending the sanctions waiver is known.
Imports from Iran have turned a trickle with Indian Oil Corp and Essar Oil Ltd buying 0.5 million tonnes and 0.75 million tonnes respectively since April. Other buyers MRPL,Hindustan Petroleum Corp and Hindustan Mittal Energy Ltd have yet to order a cargo.
The Iranian delegation was assured that imports would pick up after the first week of June, said an official.
Indias pledge coincides with the US announcement of waiver extension likely on June 6 and a meeting by the Finance Ministry on June 4 to resolve the reinsurance problem.
Reinsurance cover for the composite insurance of Indian refineries,mainly MRPL and Essar,is estimated at Rs 18,000 crore of which the Indian government is willing to set up a corpus of only Rs 2,000 crore.
The finance ministry is expected to extend a sovereign guarantee for the rest at the June 4 meeting.
The Indian side explained that it would encourage companies to maintain their engagement in terms of crude oil purchase,taking into account their requirements,based on commercial and international considerations, said a government statement.
Tehran wants New Delhi to raise oil imports which fell to 13.3 million tonnes in 2012-13 from 18.1 million in the previous year.
In return,Iranian Petroleum Minister Rostam Ghasemi,who is visiting India,offered discovered oil fields on lucrative terms and assured gas supply through a sub-sea gas pipeline avoiding Pakistan.
Ghasemi also agreed to consider shifting a proposed production sharing contract for the Farzad-B gas field from ONGC Videsh Ltd-led consortium to another nominee of the Indian government.
Farzad-B holds 13 trillion cubic feet of recoverable gas — three times the size of known reserves in Reliance Industries KG-D6 block and if OVL were to invest in its development,they would be barred from doing business with the US and other western nations.
Iran also offered to provide marine insurance from its insurers out of Dubai as well as shipment of oil to India through Iranian tankers.