Iran

Markets remain composed after Iran attack on Israel

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Oil markets, weighing the consequences of Iran’s first ever direct attack on Israel over the weekend, with missiles and drones, opened cautiously in early Asian trade Monday and will be shaped by the extent of Tel Aviv’s response.

First signs indicate that investors are relieved by the scope of Iran’s attack as it has been perceived as a controlled attack that is not expected to force Israel to escalate action and prompt a forceful response from the US and allies, which would certainly lead to a regional conflict.

In early Asian trading Monday morning, Brent crude oil futures were trading at a level of 90.50 dollars a barrel, marginally up compared to Friday, while WTI futures fell slightly to 85.57 dollars a barrel.

Over the past month, Brent prices have risen by 8.5 percent, in expectation of action by Iran. Though this ascent cannot be ignored, forecasts of a spike to levels of between 95 and 100 dollars a barrel have yet to be confirmed.

Worse-case scenarios entailing further escalation – which would consequently cut off oil supply from the region and, worse still, prompt Tehran to block the Strait of Hormuz, a highly important strategic location for international trade offering passage to a third of the world’s liquefied natural gas and almost 25 percent of total global oil consumption – still seem far off.

Markets have remained composed. Iran has tested reactions, while Israel’s ability to intercept and the support of its allies have both been confirmed.

This means that any oil price rises, as an initial reaction following Iran’s weekend attack, will be short-lived.

Iran launched drones and missiles at Israel over the weekend as retaliation for an attack on its consulate in the Syrian capital Damascus on April 1. Israel has not claimed responsibility for the consulate strike but is widely regarded to have been behind it.

 

Major east Mediterranean projects brought to a standstill

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The Brent crude price began trading today 5 percent up, over 88 dollars a barrel, as markets have not ruled out stricter US sanctions by the US against Iran, which supports Hamas, responsible for the weekend’s shock attack on Israel.

European and US markets are also expected to rise today, reflecting anxiety over an escalated conflict that would be brought about by an Israeli ground military operation in Gaza and the involvement of the powerful Hezbollah from the Israel’s north, with the support of Iran and Syria.

Should the US impose stricter sanctions on Iran, global oil supply would be reduced, creating an opportunity for Russia to increase its share, analysts have noted.

Washington, since late 2022, has turned a blind eye to an increase in Iranian exports circumventing US sanctions, on the basis of an informal détente with Tehran, analysts have reminded. The US has pursued such a course knowing it would hurt Russia.

Israel’s energy-related interests in the eastern Mediterranean, including talks with Cyprus and other regional players for gas exports to Europe, will now be put on hold following the Hamas attack on Israel.

Earlier today, Israel’s energy ministry ordered US oil giant Chevron to halt operations at the Tamar gas field, off the coast of Israel. The company stated it is complying with the ministry’s request.

The development of a Cypriot LNG terminal, planned to receive Israeli pipeline gas, and, even more crucially, a recent push by Israeli Prime Minister Benjamin Netanyahu for decisions promoting exports from east Mediterranean fields within the next three to six months, are now being brought to a standstill.

As for the role of Turkey, statements made yesterday by President Recep Tayyip Erdogan, who called for restraint from both sides without condemning the Hamas attack on Israel and spoke again of a Palestinian state with Jerusalem as its capital, probably reinforce Israel’s reservations against Turkey.

At a recent meeting in New York, Netanyahu and Erdogan agreed to schedule an exchange of visits aimed at restoring relations between the two countries. Erdogan, at that meeting, had proposed the transportation of Israeli gas to Europe via a subsea pipeline running alongside the Turkish coast.

Operations by Greece’s Energean Oil & Gas, listed on the London Stock Exchange, at licenses within the Israeli EEZ have not been disrupted by the conflict, company officials informed, noting the Energean Power FPSO and all other company facilities are not situated close to the battle zone.

 

 

Bioethanol, Iran tension lift gasoline prices by four cents per liter

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Motorists, in recent days, have faced the prospect of gasoline price hikes of as much as three to four cents per liter, compared to December 31 levels, escalating tension in the Middle East following the assassination of Iranian military commander Qasem Soleimani in a US drone attack ordered by President Donald Trump and the event’s impact on the international oil market being a key factor.

Another – less publicized and possibly more important – factor also leading to fuel price rises concerns an EU law requiring greater use of bioethanol, produced from a renewable source. Over the past year, a new EU law for cleaner energy has obligated refineries to include biofuels in their fuel mix.

As a result, the percentage of bioethanol included in conventional gasoline mixes has increased as of January 1, increasing gasoline production costs.

Subsequently, the price of gasoline at local refineries has risen from 1,173.59 euros per cubic meter on December 31 to 1,198.59 euros in prices registered January 1 and 2. This represents an overnight price increase of 25 euros per cubic meter or 2.5 cents per liter. The price rise will begin taking effect at petrol stations today, the end of the extended festive season in Greece.

The rising concerns in the Middle East combined with the cleaner auto fuel initiative will result in a retail price increase of approximately four cents per liter.

Worse still, a retaliatory attack by Iran on Saudi facilities, or an effort by Tehran to block the Strait of Hormuz, a corridor through which 20 percent of global oil is transported, would prompt far sharper price hikes. The latter scenario would lift oil prices to over 150 dollars a barrel, according to a report by research company Capital Economics.

 

 

Interim dividend likely at ELPE, favorable DEFSA sale progress

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ELPE (Hellenic Petroleum) could offer an interim dividend as a result of favorable developments concerning the privatization of DESFA, Greece’s natural gas grid operator, approaching finalization, ELPE deputy chief Andreas Siamisiis noted yesterday during a teleconference held for the presentation of the corporate group’s first-half results.

ELPE expects to receive approximately 300 million euros for the sale of its 35 percent stake of DEFSA. The Greek State offered 31 percent of DESFA’s 66 percent being sold.

An all-European investment team comprising Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys emerged as the tender’s winning bidder.

In other news emerging during the session, ELPE officials informed that outstanding debt owed by ELPE to NIOC, the state-run National Iranian Oil Company, is the equivalent of four million barrels of crude, or two tankers.

During the session, many analysts focused on ELPE’s exposure to Iranian crude supply, disrupted three months ago as a result of the resumption of US sanctions on Iran and the wider repercussions of Washington’s move.

“We received two tankers of [Iranian] crude between May and June and have fully replaced Iranian supply with orders from the Urals [Russia] and Saudi Arabia. We have zero Iranian exposure,” informed ELPE deputy chief Andreas Siamisiis.

Prior to the latest sanctions on Iran, ELPE crude orders from Iran and Iraq represented 22 percent of the company’s total, according to its annual financial report in 2017.

ELPE acts against any possible fallout of US sanctions on Iran

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ELPE (Hellenic Petroleum) has stopped placing new Iranian crude orders and also settled the biggest part of an older outstanding amount owed to the country’s state-run oil company as protection against any negative fallout that could result from US President Donald Trump’s new sanctions against Iran, announced in May.

Like other petroleum firms in various countries, ELPE reached its decision to stop ordering Iranian crude to safeguard itself against a variety of problems, including exclusion from transactions, with American banks and oil companies.

The US president has issued a strong warning to anyone trading with Iran, following his re-imposition of sanctions on the country.

“Anyone doing business with Iran will NOT be doing business with the United States,” the president tweeted.

Some re-imposed sanctions have just taken effect and tougher ones relating to oil exports will begin in November.

The EU, China and India have announced they do not intend to follow the American example and impose sanctions on Iran, as they had done in 2012, when the US last imposed sanctions on the country, international news agencies have reported over the past few days. However, all three could end up succumbing to market pressure if their oil firms find themselves in danger of being blocked out of US financial and oil markets.

Returning to ELPE, the Greek petroleum firm has already taken action to fill the void created by its decision to stop placing Iranian crude orders. A wider strategy adopted by the firm’s administration to diversify crude supply sources for ELPE’s three refineries – two west of Athens in Aspropyrgos and Elefsina, as well as a third facility in Thessaloniki – has helped cover the shortage.

According to ELPE’s annual economic report for 2017, Iranian and Iraqi crude represented 22 percent of total orders placed by the Greek firm. Russia and Kazakhstan each represented 10 percent of ELPE’s crude orders in 2017, Saudi Arabia supplied 5 percent, Mediterranean countries provided 9 percent, as did Libya, Egypt’s share was 4 percent, while various other countries supplied 13 percent.

Iranian crude exports declined by 300,000 bpd (barrels per day) to 2.3 million bpd in July as a result of reduced orders by European refineries, according to international news agency reports. Officials in Washington anticipate Iran’s crude exports could drop to a level of less than one million bpd.

 

 

 

Iranian crude buyers brace for prospect of new US sanctions

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The latest deterioration of US-Iran relations, prompted by US President Donald Trump’s policy shift towards the country since taking office, is likely to impact the global oil market, including supply to Greece, as the possible cancellation of a bilateral nuclear agreement between the two countries, which would lead to new US trade sanctions against Iran, cannot be dismissed.

A previous embargo imposed on the country had disrupted Iranian ol exports, forcing long-time buyers, including ELPE (Hellenic Petroleum), to turn elsewhere for supply.

The establishment of a nuclear agreement in 2016 enabled Iran to resume its oil exports. At present, these cover approximately 25 percent of ELPE’s needs.

According to Platts, the energy and commodities information provider, numerous Asian buyers of Iranian crude are preparing for the prospect of a new embargo. Some of these countries are believed to be looking at solutions that would restrict oil imports.

The pressure now being felt by buyers as a result of the unstable climate could prompt them to seek improved supply deals, sector pundits believe.

The US president is expected to discuss issues concerning Iran next week.

New trade sanctions on the country would be embraced by OPEC members as the resulting global oil supply reduction would raise international oil prices and, as a result, enable the cartel to relax or even end an agreement between its members to cut back on output.

PPC, joined by China’s CMEC, looking to expand as far as Iran

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Main power utility PPC, which recently signed a Memorandum of Agreement with CMEC (China Machinery Engineering Corporation) for joint development of a second lignite-fired power station in Meliti, close to Florina, northern Greece, plans to establish a broader strategic partnership with the Chinese company for business ventures in foreign markets as a means of covering at least some of the losses expected by the the utility from its bailout-required market contraction in Greece.

PPC’s chief executive Manolis Panagiotakis and CMEC president Zhang Chun, leading a group of company officials on a visit to Athens, are expected to sign a strategic partnership agreement in the Greek capital today. It will make official the Greek utility’s plan to seek new business opportunities beyond Greece with CMEC as a partner.

According to sources, PPC and CMEC plan to begin their endeavors by trying to penetrate the Albanian electricity market. If successful, the pair will also tap the Fyrom (Former Yugoslav Republic of Macedonia) and Kosovo markets. The PPC-CMEC partnership plans to eventually stretch out even further to the markets of Iran and Egypt, as well as Turkey.

PPC views an expanded presence in foreign markets as the only way of compensating for bailout-required losses in the Greek retail and production electricity markets. The utility needs to reduce its market share in Greece to less than 50 percent by the end of 2019. PPC’s retail market share slipped to 88.07 percent in September, down several percentage points over the past year. The utility’s virtual monopoly in Greece is gradually eroding.

As part of its foreign markets campaign, PPC has already established a subsidiary firm in Albania but has yet to do likewise in Fyrom and Kosovo.

“If PPC wants to make up for the planned Greek production and retail market share losses over the next few years, joint ventures with a foreign partner for business in the Balkans stand as more than just a strategic choice,” an official told energypress, implying the company’s survival will be at stake.

CMEC will take on a key role that may help PPC succeed in the Balkans following a series of failed attempts in the previous decade or so. The Greek utlity made its first attempt in 2003 in Romania and has since made many more unsuccessful efforts to penetrate neighboring markets. This overall failure can be attributed to the preferences of respective Balkan country governments for stronger western partners, based on reasons concerning wider political expediency, as well as poor judgement on behalf of PPC’s previous administrations.

Iran pursuing Greek market interest for refinery, LNG unit

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The European Central Bank is expected to reach a decision in October on whether to lift banking restrictions on Iranian capital currently deposited at European banks, which would facilitate the country’s business trading ability in Europe, including a proposal for joint business dealings with ELPE (Hellenic Petroleum).

Currently in Athens on an official visit with these prospects in mind, the head of Iran’s central bank, Valiollah Seif, met yesterday with Hellenic Bank Association officials and is scheduled to hold talks today with his Greek counterpart, Yiannis Stournaras.

Seif will be hoping to gain the support of Greece’s central bank governor ahead of the anticipated ECB decision in Iran’s banking restrictions.

In another meeting yesterday, the Iranian bank chief met with Greek energy minister Panos Skourletis. The two officials discussed the Greek market partnership plans proposed by Iran.

Following up on an initial expression of interest for an equity share of ELPE, Iran has also proposed the co-development, with ELPE, of a new refinery in Greece or an overall upgrade, including a capacity boost, of an existing unit in Thessaloniki. This would serve the crude export interests of NIOC, the state-run National Iranian Oil Company.

As for the natural gas sector, Iran is now ready to begin suppling LNG and is seeking distribution channels and buyers. Iran is interested in supplying LNG to the planned LNG terminal in Alexandroupoli, northeastern Greece, and is also contemplating becoming an equity partner for this facility’s construction and operation.

All these thoughts and plans will remain at a theoretical level if the European banking restrictions on Iran are not lifted. The restrictions have remained in place despite the lifting of western-imposed trade sanctions on Iran last January.

Most European banks have prefered to avoid financing Iranian enterprises. The upcoming US elections and presence of European banks across the Atlantic has influenced their ongoing refusal to do business with Iranian enterprises.

Banking restrictions blocking Iran’s Greece investment plans

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Iran’s plan to establish partnerships with Greek refineries cannot be developed unless European banking restrictions, still lingering despite the lifting of western-imposed trade sanctions earlier this year, are ended.

The general optimism expressed over the prospects of Iran’s possible entry into Greece’s oil refinery market needs to be reined in, one Greek government official who is well informed on the west’s view of Iran has told energypress.

Most European banks have kept their doors shut to transactions involving Iranian companies even though western-imposed sanctions on Iranian crude oil exports were officially lifted last January.

Just three European banks, two Italian and one German, all small in scale, are currently willing to handle Iran-related transactions. As a result, Iran is desperately seeking to establish banking links with countries that have constituted traditional trading partners, including Greece.

According to sources, Iran’s central bank chief Valiollah Seif will be in Athens on September 29 and 30 for a series of meetings, one of these being with his Greek counterpart Yiannis Stournaras. The Iranian official, whose upcoming visit represents part of the country’s wider effort to resolve its international banking problems, will seek to establish ties with Greek banking institutions. The Greek central bank, reflecting all major European banks, is currently opposed to the prospect.

Should Greek banks remain closed to Iranian business, Iran’s investment plans for ELPE’s (Hellenic Petroleum) existing refinery in Thessaloniki and a new facility in Thrace, northeastern Greece, intended to facilitate exports to southeast Europe, will be affected.

The imminent US elections are influencing the overall stance maintained for trade with Iran. Hillary Clinton, the Democratic Party’s presidential nominee, has publically stated the sanctions on Iran should remain intact. Republican nominee Donald Trump has not voiced an opinion.

When the trade sanctions on Iran were lifted nine months ago, Washington had signed a clause specifying that US-based banks facilitating Iranian transactions would be subject to fines. Another US condition states that top-ranked officials of any US firm conducting business with Iran must not hold American passports. This measure alone blocks the majority of US companies and banks from doing business with Iranian firms.

 

ELPE officials set for Iran visit to further discuss cooperation

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ELPE (Hellenic Petroleum) officials are preparing to soon visit Tehran, energypress has been informed, for further talks with Iranian government and NIOC (state-run National Iranian Oil Company) officials on the prospects of Iran’s support in the development of a prospective floating LNG station in Alexandroupoli, northeastern Greece, as well as joint development of a new refining facility in Greece.

In the lead-up to the visit, Greece’s energy minister Panos Skourletis met yesterday with Iran’s ambassador to Greece, Majid Motallebi Shabestari.

Iran is currently working on two objectives, one to increase oil production to the country’s pre-embargo levels, the other to establish a base in Europe for refining and selling its production in the continent.

Iranian officials have also held talks with Bulgaria as an alternative option to this plan, while other countries in the region may also be at play, which means that Greece needs to act fast if it wants to be a part of these Iranian business interests.

At this stage, Greek officials are believed to be considering either an expansion of an existing ELPE refinery in Thessaloniki or development of a new one in Thrace, in the country’s northeast.

The Iranian proposal for business in Greece is not linked to outstanding debt owed by ELPE to NIOC as a result of lingering banking restrictions in Iran following the lifting of the western-imposed trade sanctions early this year.

Iran is now ready to start supplying LNG. Last month, following a meeting between Iran’s oil minister Bijan Namdar Zangeneh and Bulgarian energy minister Temenuzhka Petkova, Bulgarian media reported that Zangeneh expressed an interest to start supplying Iranian LNG to Greece and Bulgaria once the IGB (Interconnector Greece Bulgaria) project is completed.  The Iranian minister also stressed Iran’s interest to help develop the Alexandroupoli LNG station.

NIGC’s registration for an oil and gas conference in Athens on September 28 is indicative of Iran’s interest. The event will provide Iranian officials with the opportunity to hold crucial talks at political and entrepreneurial levels.

Iran displaying two-pronged interest in the Greek market

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Iran, active on the global energy circuit after being sidelined for years as a result of western-imposed sanctions, is expressing an interest to participate in the development of a prospective floating LNG station in Alexandroupoli, northeastern Greece, through NIGC, the National Iranian Gas Company, while a proposal has already been extended by NIOC, the National Iranian Oil Company, to ELPE (Hellenic Petroleum) for joint development of a new refinery in Greece.

Now ready to start supplying LNG, Iran is seeking distribution channels and customers. Last month, following a meeting between Iran’s oil minister Bijan Namdar Zangeneh and Bulgarian energy minister Temenuzhka Petkova, Bulgarian media reported that Zangeneh expressed an interest to start supplying Iranian LNG to Greece and Bulgaria once the IGB (Interconnector Greece Bulgaria) project is completed.  The Iranian minister also stressed Iran’s interest to help develop the Alexandroupoli LNG station.

Iran is considering taking its interest in the Alexandroupoli LNG station a step further by examining the prospect of acquiring a stake in the venture, energypress has been informed. NIGC’s registration for an oil and gas conference in Athens on September 28 is indicative of this interest. The event will provide Iranian officials with the opportunity to hold crucial talks at political and entrepreneurial levels.

As for the oil sector, Iran’s interest in acquiring a stake in ELPE, a move supported by the country’s oil ministry, emerged at the beginning of this year through statements conveyed by Iranian state-run news agencies.  The prospect has been linked to settlement of ELPE debt owed to NIOC. ELPE officials have not taken the proposal any further despite a reference on the matter by Greece’s minister for foreign affairs Nikos Kotzias during a visit to Tehran.

Iranian officials have made clear their interest for the joint development of a new refinery in Greece, which would primarily serve Iranian export needs. This proposal has been looked into by Greek officials. Two options are being examined, one for the expansion of an existing facility in Thessaloniki, the other the construction of a new unit in Thrace, Greece’s northeast. This Iranian proposal has not been linked to ELPE’s debt owed to NIOC.

Iranian state companies are expecting to receive billions of euros in payments from various countries as a result of lingering banking restrictions in Iran, despite the lifting of sanctions early this year. Iran plans to invest some of this money into production units facilitating the country’s oil and gas exports. Besides Greece, development of units in Bulgaria is also being examined.

Mytilineos upbeat for 2016, Iran solar farm project revealed

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The Mytilineos corporate group’s leadership, speaking with market analysts via a conference call yesterday, presented an upbeat picture for 2016, noting that second-half results will be better than those of the first half, and also disclosed that group member METKA, a leading international contractor and industrial manufacturing group, has been awarded a project to develop Iran’s first solar farm, a 10-MW capacity facility.

Evangelos Mytilineos, chief executive at the Mytilineos corporate group, stressed that the group’s financial performance in 2016 will exceed analyst forecasts. Last year, the Mytilineos group had performed better in the first half than in the second.

Evangelos Mytilineos was particularly optimistic about the corporate group’s energy division results for the second half of this year. He told analysts that the Mytilineos group is striving to make gradual and steady progress and highlighted a strategic agreement established by the group’s subsidiary firm Protergia with Cosmote, the country’s leading mobile telephony retailer, to serve the retail electricity market. Cosmote controls an extensive network of Germanos and Cosmote retail outlets around Greece.

CAT mechanism payments, which local electricity producers were deprived of during the first four months of the year as a result of the delayed implementation of the country’s temporary CAT system, will boost the Mytilineos group’s second-half results, the corporate group’s administration informed analysts.

As for the group’s metallurgy division, the chief executive informed that increased Chinese supply to the global market is lowering aluminium prices. Mytilineos said a new cost-cutting program would be implemented at group member Aluminium of Greece in 2017 and 2018, following two previous cost-cutting initiatives taken by the subsidiary.

Giannis Mytilineos, the head at METKA, announced the news of the company’s agreement to develop Iran’s first solar farm. Already underway, it is scheduled to be completed by the end of this year.

Also for Iran, the company has signed a Memorandum of Understanding (MOU) to develop a 900-MW power station and is currently engaged in talks concerning financing options.

Banking restrictions in Iran have yet to be overcome despite the lifting, early this year, of western-imposed trade sanctions on the country. Once the banking hurdle is cleared, the power station’s development is expected to make swift progress and significantly boost METKA’s results.

Greece a ‘bridge linking Iran’s energy, trading interests with EU’

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Prime Minister Alexis Tsipras, currently on an official visit to Tehran, presented Greece’s framework of a strategy, as he put it, for collaboration with Iran during a speech delivered at the Pardis Technology Park (PTP). The Greek leader noted the two countries can join efforts in the fields of technology and innovation, energy, commerce, culture, and shipping.

Mahdi Safarinia, president of the technology park in Tehran, described Tsipras as Europe’s most independent leader. The official noted that over thirty high-tech enterprises are members of the PTP park, which, he added, employs over 3,000 researchers.

The Greek government is aiming to establish strategic ties with Iran, Tsipras noted, while assuring Iran that Greece will stand as a bridge linking Iran’s energy, economic and trading interests with the European Union.

The Greek prime minister has been joined by foreign minister Nikos Kotzias, his deputy Dimitris Mardas, economy minister Giorgos Stathakis, environment and energy minister Panos Skourletis, the Greek Foreign Ministry’s Secretary General for International Economic Relations, Giorgos Tsipras, a cousin of the Greek leader, as well as a delegation of Greek entrepreneurs on this official visit.

He is scheduled to meet Iranian political and state leaders during the day.

 

Top Greek officials, including PM, in Tehran from Sunday

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The recent agreement reached between ELPE (Hellenic Petroleum) and NIOC, the state-run National Iranian Oil Company, for a resumption of trade following the lifting of western-imposed sanctions on Iran, will be sealed over the next few days, when a Greek delegation to be headed by Prime Minister Alexis Tsipras travels to Tehran for an official visit beginning on February 7.

Besides the signing ceremony for the deal, expected to be a triumphant occasion, a wider effort will be made by Greek officials to re-establish business ties with Iran in various fields.

ELPE and NIOC recently reached an agreement on the payment terms for a 600 million-euro outstanding amount owed by the Greek refinery to the Iranian company as a result of banking restrictions prompted by the sanctions on Iran in 2011.

The Greek company, as has been previously reported, will cover 50 percent of its debt owed to NIOC through the supply of an equivalent amount of finalized products, such as auto diesel and fuel. Also, a further 10 percent will be covered through engineering services to be offered to Iran by Asprofos, an ELPE subsidiary firm.

In monetary terms, ELPE will export finalized products worth 300 million euros and engineering services worth 60 million euros, which adds up to 60 percent of the 600 million-euro amount owed to NIOC.

ELPE expects to cover between 20 to 30 percent of its daily crude needs through Iranian supply, once trade recommences. This is expected in March or April.

Certain details remain unresolved, such as the credit period to be granted by NIOC to ELPE for new supply. The Iranians have asked for a one-month period. ELPE prefers two months.

ELPE’s supply of 300 million euros worth of finalized products, as part of the payback deal, should help the Greek refinery get its foot in the door of the enormous Iranian economy.

It remains unknown whether Iranian officials will reiterate their interest for a stake in ELPE during the PM-led Greek delegation’s visit. Just days ago, Iran’s deputy oil minister, Amir Hossein Zamaninia, speaking on Iranian state radio, noted Iran is keen to acquire an equity share of ELPE.

ELPE officials have said that such a prospect was not raised during Zamaninia’s recent visit to Athens. Greek officials closely linked with Greek energy minister Panos Skourletis have informed that the Greek state has no intention of reducing its stake in ELPE.

The Greek state holds a 35 percent stake in ELPE. It has been transferred to TAIPED, the State Privatization Fund. The Latsis group, which owns a 42.6 percent equity share of ELPE through Paneuropean Oil, has officially rejected any chance of selling its interests in ELPE.

Certain market officials believe Tehran’s expressed interest in ELPE may be part of the negotiating tactics being applied by Iran with the aim of getting the country back into the European market following the recent lifting of sanctions.

At present, Iran is negotiating lower-priced crude supply deals with countries such as Greece, Italy and France. The country is also seeking to invest capital in Europe with the aim of generating Iranian crude sales and motivating countries to settle respective outstanding debt amounts owed to Iran as a result of the embargo, as was the case with Greece and the aforementioned 600 million euros.

ELPE to service 40% of NIOC debt with finalized products

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Greek refinery ELPE (Hellenic Petroleum) will cover at least 40 percent of debt owed to the Iranian state-run National Iranian Oil Company (NIOC), estimated at 600 million euros, through supply of an equivalent amount of finalized products such as auto diesel to NIOC, the two sides agreed on Friday, it has been revealed.

An agreement on the outstanding amount owed by ELPE, prompted by banking restrictions that came with the western-imposed trade sanctions on Iran in 2011, needed to be found before the two sides could resume trading, now that the international sanctions have been lifted. The total debt amount owed by ELPE is scheduled to be repaid over a four-year period.

The measures imposed on Iran led to the gradual dilapidation of crucial infrastructure, including the country’s refineries. The deal will open the door for ELPE to Iran, a country with a population of 80 million, 70 percent of which is under the age of 35 and eager for consumption. Car sales in Iran are predicted to soon rise sharply, which will prompt a hefty auto fuel demand increase.

Details concerning the agreement last Friday between ELPE and NIOC – the first to be reached between Tehran and a western-world enterprise since the lifing of sanctions just over a week ago – have not been officially revealed following a request made by Iranian officials, energypress has been informed. NIOC is currently also engaged in similar talks with a range of oil companies, including BP and Shell, which also owe significant amounts to NIOC from the pre-sanctions area.

It has become known that ELPE’s deal with NIOC will cover 25 percent of the Greek refinery’s crude needs. The Iranian company is expected to begin exporting crude quantities of about 75,000 to 80,000 barrels a day to ELPE as of February or March. Last year, ELPE’s three refineries, in Aspropyrgos, Elefsina, and Thessaloniki, were supplied about 300,000 barrels of crude on a daily basis from various other sources.

Besides the new crude supply deal with Iran, ELPE also maintains a long-term deal with Saudi Arabia. The remainder of the refinery’s needs is covered via traders linked with Iraq, Russia, Libya, Kazakhstan, and Egypt. Last year, these countries, including Saudi Arabia, provided ELPE’s refineries with 13 million tons of crude.

ELPE, Iran’s NIOC strike deal for immediate crude oil supply

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Greek oil refinery ELPE (Hellenic Petroleum) struck a long-term crude supply deal with the state-run National Iranian Oil Company (NIOC) in Athens today following a series of meetings in the Greek capital and Tehran.

NIOC, now back in the international picture following last Sunday’s lifting of western sanctions imposed on Iran in 2011, will immendiately begin supplying crude to ELPE, according to a statement released following today’s between top-ranked officials representing both sides.

ELPE and NIOC, old trading partners, forged a new deal after agreeing on the level and payback terms of a disputed amount owed by the Greek refinery to NIOC from prior to the western-imposed sanctions. The amount had been left unpaid as a result of the suspension of banking transactions when the sanctions were imposed on Iran. Factors such as fluctuating exchange rates had prompted the dispute as to the actual amount owed.

Prior to today’s agreement, ELPE had contended the amount was worth roughly 600 million dollars. The final amount agreed to was not disclosed in the statement released following the deal. ELPE’s administration expressed satisfaction over the deal, noting it is mutually beneficial.

Iran was supplying between 20 and 30 percent of Greece’s crude oil needs before being barred from international trade as a result of the sanctions.

Greek, Iranian officials meet today on crude trade restart

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The return of Iran to the international trading market following the lifting, last Sunday, of western-imposed sanctions on the country, and the impact this move is making on crude prices, which have fallen further as a result of the additional supply, has certainly dominated international media over the past few days. Iranian officials have been busy traveling the world in search of interested buyers of crude, already sitting in oil tankers and waiting to be shipped. At least 30 million barrels of crude are reportedly ready to be exported.

Two days ago, Iranian president Hassan Rouhani and his oil minister Bijan Namdar Zangeneh continued this campaign at the annual World Economic Forum now taking place in Davos, where they sought to re-establish ties with buyers as well as major petroleum companies, also represented at the Swiss event.

Today, Iran’s deputy oil minister, Amir Hossein Zamaninia, accompanied by officials of the Iranian state-run National Iranian Oil Company (NIOC), will meet with Greek energy minister Panos Skourletis and representatives of the Greek refinery ELPE (Hellenic Petroleum) in Athens as part of the ongoing campaign.

Greece is among the first countries eyed by Iran, planning its return to the international crude market. Bilateral trade between the two countries was abruptly stopped in June, 2012, by the western-imposed sanctions. At the time, Iran was supplying between 20 and 30 percent of Greece’s crude oil needs. ELPE and fellow Greek refinery Motor Oil benefited from favorable payment terms offered by Tehran, which made Iranian crude even more enticing.

Greek and Iranian officials will seek to re-establish their older trading ties at today’s meeting in Athens. Roughly 140,000 barrels of Iranian crude were exported to Greece every day prior to the sanctions.

However, a dispute concerning the level of an unpaid amount owed by ELPE to NIOC, which the Greek side believes is worth roughly 600 million dollars, will first need to be settled. The amount was left unsettled as a result of the suspension of banking transactions linked to the sanctions on Iran. Factors such as exchange rates have prompted a dispute as to the actual amount owed.

ELPE officials have already visited Tehran twice to discuss the issue. Both sides are confident an agreement will be reached. Various scenarios have been linked to the payback solution, including one claiming NIOC may acquire a stake in ELPE. The Latsis Group, ELPE’s main shareholder, with a 42 percent stake, denied these reports. The Greek state, which holds a 35 percent stake in ELPE, has not.

Iranian officials, anticipating a major influx of outstanding payments that had not been made as a result of the sanctions, are keen to pursue investments abroad and maintain capital amounts outside the country. Certain sources have reported Iran expects to regain access to 56 billion dollars of confiscated profit that had been generated by older crude oil sales. Iranian crude sales are expected to reach 150 million dollars per day now that the sanctions have been lifted.