Exclusive: India's HMEL bought 2 million barrels of Iranian oil: sources

Sat Oct 13, 2012 11:25am EDT
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By Nidhi Verma

NEW DELHI (Reuters) - India's HMEL, part-owned by steel tycoon Lakshmi Mittal, has emerged as a new oil client of sanctions-hit Iran, potentially complicating New Delhi's bid for a renewal of its waiver from U.S. sanctions for buying crude from Tehran.

HPCL-Mittal Energy Ltd (HMEL) has taken two shipments of Iranian oil since the start of September to maximize margins at its 180,000 barrels per day (bpd) Bathinda refinery in northern India, two sources with knowledge of the deals told Reuters. The purchases came to a total 2 million barrels.

In June Washington granted India a waiver on sanctions that would have cut it off from the U.S. financial system because it had reduced its purchases of the OPEC nation's oil.

India's waiver from the sanctions, which are designed to dissuade Tehran from pursuing its nuclear program, will only be renewed in December if imports have been cut further.

Mark Dubowitz, a U.S. lobbyist for tougher sanctions on Iran and head of the Foundation for Defence of Democracies, said HMEL was taking a significant risk in buying this oil.

"The U.S. government in December will be looking to see whether India has indeed significantly reduced its purchases of Iranian oil and the addition of one more customer - especially with significant exposure to the U.S. and Europe - will raise eyebrows in Washington," Dubowitz said.

HMEL is part-owned by Indian tycoon Mittal, who heads ArcelorMittal, the world's largest steelmaker. ArcelorMittal produces 35 percent of its steel in the Americas and 47 percent in Europe, according to the company's website.

State-run refiner Hindustan Petroleum Corp and Mittal own 49 percent each in the joint venture HMEL.   Continued...

The chairman of ArcelorMittal Lakshmi Mittal poses for a photograph at the top of the ArcelorMittal Orbit in the London 2012 Olympic Park in east London May 11, 2012. REUTERS/Ki Price