NEW DELHI, May 29 (UPI) -- Tehran has offered incentives to lure India to import more oil from Iran.
The Iranian sweeteners, presented during Oil Minister Rostam Ghasemi meeting with his Indian counterpart M. Veerappa Moily in New Delhi this week, include oilfields on lucrative terms, rerouting a natural gas pipeline to avoid Pakistan and offering reinsurance cover to Indian refineries that process crude from the country, Press Trust of India reports.
India's crude oil imports from Iran fell to 13.3 million tons in 2012-13 from 18 million tons the previous year as United States and European sanctions made it difficult to ship oil from the Persian Gulf nation.
This year, imports are expected to plunge further to around 11 million tons as Mangalore Refinery and Petrochemicals Ltd. hasn't imported any Iranian oil so far this fiscal year. In 2012-13 it had bought 3.9 million tons from Iran.
"The Indian side explained [to the Iranians] 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," a statement issued by the Indian oil ministry said.
Ghasemi said that Tehran would provide the reinsurance for Indian refineries that process Iranian crude, the PTI report said, without providing further details, adding that India was skeptical about the offer.
India has faced a reinsurance dilemma as insurance companies, unable to get backup or reinsurance cover from European counterparts because of the sanctions against Iran, have refused to provide cover to refineries using oil from the Persian Gulf nation.
As another incentive, Tehran also offered a production sharing contract to state-run ONGC Videsh Ltd. for the Farzad-B gas field, estimated to hold 13 trillion cubic feet of recoverable reserves.
The PTI report cited sources as saying that Tehran was also open to rerouting the Iran-Pakistan-India gas pipeline via an under-sea route to avoid going through Pakistan.
"The Iranian delegation was assured that imports would pick up after the first week of June," an unnamed official was quoted as saying by the Indian Express.
India's dependence on imports is as high as 80 percent for crude, says India's oil ministry.
Separately, in an interview with Indo-Asian News Service, Iraq's Minister of Water Resources Mohanad Salman Alwan Al-Shaibani said his country was likely to increase oil supply to India by about 30 percent, as shipments from regional rival Iran have dropped due to the sanctions.
India has requested 80,000 barrels per day of additional crude oil supply. We will increase the supply depending on the availability," Shaibani said.