At a meeting with journalists, he said: "These are strategic calls to be taken and we will not cut imports completely. We will sort out the problems faced by Indian refiners soon." Petroleum secretary Vivek Rae said the government was mulling the creation of a separate fund to provide insurance, if European reinsurers continued to refuse to cover Indian refineries using Iranian crude oil.
"The fund will have contributions from the national insurance companies, industry players and the Oil India Development Board. The details will have to be decided," said Rae. The ministry is in consultation with various other stakeholders and ministries on this and the department of financial services was working on the proposal, he said. New sanctions imposed by the American government have made matters tougher. The aim is to also stop foreign subsidiaries of US companies dealing with Iran and US financial institutions are being allowed to freeze Iranian assets. Importing countries would have to go for payment by exchange of goods or in local currency. Before the fresh sanctions, India was routing 55 per cent of its payment for the National Iranian Oil Company through Turkey's Halk Bank and the rest through Kolkata-based UCO Bank.
"We have no other option but to pay in Indian rupees. We have to sort out the reinsurance issue," Rae said. Indian insurers were hesitant to give insurance to refineries as European companies were not ready to reinsure it. "Reinsurance contributes 90 per cent of the insurance cover provided by Indian companies," Rae added.
Separately, Moily said the Cabinet Committee on Investment (CCI) is to consider 31 blocks for exploration and development, which might see an investment of about $3 billion this week. "On its first meeting, CCI has cleared three proposals and in the second meeting, another seven were cleared. We are going to the committee with another 31 proposals which would be cleared this week," he added.
He also said the government would come up with a final draft on shale gas exploration policy within 15 days. "We are going before the cabinet with the draft policy for clearance," he added.