Chennai Petroleum Corp Limited (CPCL)

In June 2020, CPCL was listed by the Connecticut Office of the Treasurer as a restricted company and therefore prohibits direct investment in the company due to its involvement in Iran.  (https://portal.ct.gov/-/media/OTT/Doing-Business/080420SudanStatutoryInvestmentRestrictionsJun2020.pdf)

Chennai Petroleum is a subsidiary of the Indian Oil Corporation. The National Iranian Oil Company, through its Swiss-based subsidiary Naftiran, owns a minority stake in the company.. (http://www.unitedagainstnucleariran.com/company/indian-oil-corporation) (http://unitedagainstnucleariran.com/company/naftiran)

“For standalone refinery Chennai Petroleum Corporation Ltd (CPCL), the presence of an Iranian stakeholder is turning out to be an issue in the wake of U.S. sanctions against the West Asian country. A group company of Indian Oil Corporation, the refinery, after giving up plans to process Iranian crude this year, is now watching the situation as tightening of the sanctions may lead to more, significant repercussions. The 11.5 million-tonne refinery, bulk of whose capacity is in Chennai, was planning to process only 0.5 million tonne Iranian crude. It, however, dropped it after insurers, for the Iranian shipments, said reinsurance companies were reluctant to take up the business. While such small shortfall could be bridged without difficulty, what could significantly impact CPCL, in which Naftiran Intertrade Company Ltd., an affiliate of National Iranian Oil Company, holds 15.40 per cent stake, is when other countries refrain from supplying crude citing the Iranian interest. ‘Today, it is only the insurance, and the embargo is on Iranian crude. It can be a major issue if the American government says we will not allow anybody else to sell crude to CPCL. It will definitely be a concern if Arab countries like Kuwait, and Saudi Arabia are not allowed to sell crude,’ says CPCL Managing Director A. S. Basu. He, however, hastened to add that the Centre, which is the biggest shareholder in CPCL through IOC, was seized of the issue. ‘There can be certain constraints with respect to our business… all these developments [like] the pressure by the insurance companies, higher premium rate, non-processing of Iranian crude,’ he says to a query on the bearing because of Iranian partner. He was speaking to The Hindu recently. Though the U.S. sanctions do not stipulate actions such as reduction in the insurance cover corresponding to the Iranian stake in a company, they, nevertheless, were enough for companies to play it safe. CPCL had apprised the government and the Ministry of Petroleum and Natural Gas had taken up with Ministry of Finance and other authorities, but “so far no resolution has come.” (The Hindu, “Iranian ties put CPCL in a spot after U.S. sanction,” 12/26/12) (http://www.unitedagainstnucleariran.com/company/indian-oil-corporation) (http://www.thehindu.com/business/companies/iranian-ties-put-cpcl-in-a-spot-after-us-sanction/article4238467.ece)

CPCL continues to import oil from Iran, it also seeks to deepen business connections with the Iranian state by raising capital from NIOC. (The Financial Express, “CPCL looks at bringing equity funding from Iranian promoter,” 5/24/2015). (http://www.financialexpress.com/article/industry/companies/cpcl-looks-at-bringing-equity-funding-from-iranian-promoter/263949/)

CPCL is listed on the 4Q 2020 Minnesota State Board of Investment List of Unauthorized (Scrutinized) Iran Companies.  (https://www.lrl.mn.gov/docs/2021/mandated/210295.pdf)

“India's Chennai Petroleum will stop processing Iranian crude after it lost insurance for those supplies, and its cover for crude imports from other countries was reduced because an Iranian firm owns a stake in the refiner, industry sources said. Chennai Petroleum's plants refine 230,000 barrels per day and account for about 5.4 percent of India's total refining capacity. Iran's Naftiran Intertrade Co Ltd owns 15.4 percent, according to the Indian company's website. ’Reinsurers are not supporting because of Iran's stake in the company,’ said one of three industry sources who declined to be named because of the sensitivity of the issue…Chennai Petroleum's insurance firm, United India Insurance Co Ltd, renewed its policies for the refiner in September and October and said it would not provide any coverage for crude oil imported from Iran, one of the sources said. And because of the involvement of the Iranian firm, United India also said it would cover just 84.6 percent of the cost of any accidents that occur while Chennai Petroleum is importing crude from any other country. The insurance firm also said it would not cover any liability arising out of processing crude from Iran, the sources added…The insurer had previously provided full coverage. ‘The balance is (Chennai Petroleum's) responsibility. It is a dangerous thing,’ one of the sources said. He said the oil ministry has asked the finance ministry to investigate whether United India Insurance should consider raising the cover for Chennai Petroleum again. Chennai Petroleum's annual insurance premiums were also increased by a third to 260 million rupees ($4.9 million) compared to a year ago, the sources said. Chennai Petroleum is a unit of India's largest refiner Indian Oil Corp, which imported 42,000 bpd from Iran in 2011/12 and was planning to bring in 30,000 bpd in 2012/13. IOC, however, has so far not lifted any cargoes from Iran. Chennai Petroleum was planning to process about 5,000 bpd of Iranian oil in 2012/13 compared with 8,000 bpd in 2011/12, one of the sources said. It has increased imports of Arab Mix, Basrah and Upper Zakum as substitutes.” (Reuters, “Chennai Petroleum's insurance cover cut on Iran stake-sources,” 10/23/12) (http://www.reuters.com/article/2012/10/23/india-iran-chennai-idUSL3E8LM6CV20121023)

Chennai Petroleum  is formerly known as Madras Refineries Limited (MRL).

"Chennai Petroleum Corp., a unit of India's largest refiner, plans to resume crude imports from Iran after a two-year gap as insurers return to the market. 'This year, we plan to restart Iran oil purchases,' Managing Director S. Venkataramana said in a phone interview. 'We are already talking to the re-insurers for this, and we are getting positive responses so far.' Chennai Petroleum, controlled by Indian Oil Corp. (IOCL), plans to import about 300,000 metric tons of oil from Iran for the year ending in March 2015, he said." (Bloomberg News, "Chennai Petroleum Plans Iran Oil Imports After Two Years," 8/13/14) (http://www.bloomberg.com/news/2014-08-13/chennai-petroleum-plans-iran-oil-imports-after-two-years.html)

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On January 20, 2020, Minnesota SBI listed CPCL as a scrutinized investment. The managers are explicitly instructed to refrain from purchasing securities on this list. (https://www.leg.state.mn.us/docs/2020/mandated/200121.pdf)

As of October 2018, CPCL is listed as a restricted company on the North Carolina Final Divestment and Do-Not-Contract List-Iran. (https://files.nc.gov/nctreasurer/documents/files/DivestmentandDoNotContract/iran-divestment-act-annual-report-2018-10-26-x.pdf)

“Indian Oil Corp. (IOCL) and two other state-run refiners said they will defer resuming purchases of Iranian crude by at least three months, having failed to get reinsurance for shipments after Europe said it would relax a coverage ban…Chennai Petroleum Corp. (MRL), which hasn’t bought any oil this year from Iran, will continue to stay away, Managing Director A.S. Basu said. Curbed shipments from Iran may hamper plans by Indian refiners to benefit from lower prices and freight costs. The South Asian nation planned to buy 11 million tons of Iranian crude this fiscal year after the European Union eased its sanction on insuring cargoes following a six-month accord between the Persian Gulf state, the U.S. and five other nations.’The benefit of the Iran deal is not percolating down,’ Basu said in an interview in New Delhi. ‘Our insurers are saying foreign reinsurers want to observe the situation for six months before extending any cover.’ European rules have yet to be rewritten, so reinsurers are still unable to provide cover to Indian refineries that purchase cargoes from the Persian Gulf state, Andrew Bardot, executive officer at the International Group of P&I Clubs, said.” (Bloomberg, “India Refiners Delay Iran Imports on Failure to Get Reinsurance,” 1/7/14) (http://www.unitedagainstnucleariran.com/company/indian-oil-corporation) (http://www.bloomberg.com/news/2014-01-07/india-refiners-delay-iran-imports-on-failure-to-get-reinsurance.html)

"Indian Oil Corp (IOC) plans to pull down the 1 million tonnes per year Nagapattinam refinery of its subsidiary, Chennai Petroleum Corp Ltd (CPCL) and build a brand new 9 million tonnes unit in next 5-6 years. National Iranian Oil Co (NIOC), which holds 15.4 percent stake in CPCL, is keen to participate in the expansion project, Singh told reporters here." (Firstpost, 2/2/2019). (https://www.firstpost.com/business/iran-keen-to-participate-in-rs-35700-cr-cpcl-expansion-ioc-chairman-sanjiv-singh-5821321.html)

In 2015, CPCL was added to the Pennsylvania Treasury's List of Scrutinized Companies Determined as Having Involvement in Iran because of oil-related investment of US $20 million since 1996. (https://www.patreasury.gov/pdf/divestment/2015-Annual-Divestment-Report-print.pdf)

In January 2016, in the wake of the JCPOA, press reports indicated that CPCL was looking to benefit from the cessation of sanctions against Iran and its business partners. (Business Standard, “ Chennai Petroleum, Aban Offshore hope to gain with sanctions lifting against Iran,” 1/18/2016). (http://www.business-standard.com/article/companies/chennai-petroleum-aban-offshore-hope-to-gain-with-sanctions-lifting-against-iran-116011800486_1.html)

In 2017, the states of North Carolina, Iowa, Colorado,  South Dakota, listed CPCL on its Iran scrutinized companies list rendering CPCL ineligible for investment and/or state contracting. (https://www.nctreasurer.com/inside-the-department/OpenGovernment/Reports/Divestment%20-%202017-08-30%20-%20Iran%20Subsidiaries.pdf) (https://www.copera.org/sites/default/files/documents/iranreport1-19-18.pdf) (http://sdlegislature.gov/docs/referencematerials/requiredreports/RR901132017.pdf)

In 2015 CPCL was then removed from Pennsylvania Treasury's List of Scrutinized Companies Determined as Having Involvement In Iran because the company's "involvement in purchases of crude oil falls under the waivers granted by the U.S. government that meet Section (a)(2) of Act 44's expiration clause."   (https://www.patreasury.gov/pdf/divestment/2015-Annual-Divestment-Report-print.pdf)