India's biggest refiner Indian Oil Corp Ltd said that Iran may still invest in a refinery expansion project at one of its subsidiaries. Mr. Sanjiv Singh Indian Oil's chairman said that Iran has not ruled out participating in the expansion at Chennai Petroleum Corp Ltd, a south India-based 20,000 barrels per day (bpd) refinery. After India cut back its Iranian crude oil imports following US sanctions, Iran's participation has been questioned.
However, Singh's comments come a few days after India exempted rupee payments to the National Iranian Oil Co for crude oil imports from a withholding tax. The exemption will allow Indian refiners to settle about USD 1.5 billion of outstanding payments to National Iranian Oil Company (NIOC) through direct rupee payments. It has been expected that these payments could help Iran invest in Indian projects, particularly the Chennai Petroleum Corp expansion.
Mr. Singh told Reuters, following a media conference "Iran has always been positive with this (the new rules). I think they should be able to invest."
Chennai Petroleum plans to replace the 20,000 barrels per day Nagapattinam refinery in Southern Tamil Nadu state with 180,000 barrels per day plant and to invest up to INR 356.98 billion.