INTERVIEW-UPDATE 1-Italy govt to help oil firms if Iran banned -lobby

Reuters: Italy’s government will give diplomatic help to the country’s oil companies to find alternative sources of crude if sanctions are imposed on imports from Iran, a senior industry official said on Monday, adding Saudi Arabia could make up the shortfall.

By Svetlana Kovalyova

MILAN, Nov 28 (Reuters) – Italy’s government will give diplomatic help to the country’s oil companies to find alternative sources of crude if sanctions are imposed on imports from Iran, a senior industry official said on Monday, adding Saudi Arabia could make up the shortfall.

“They have taken our information about the negative impact of the possible suspension of supplies from Iran to see what they can do on the diplomatic level to help find sources to replace imports from Iran,” Pietro de Simone, director of oil industry lobby Unione Petrolifera (UP), told Reuters after meeting government officials.

European Union foreign ministers are due to meet on Thursday to approve new sanctions against Tehran that could cut financial links and ban oil imports over suspicions that it is trying to develop nuclear weapons.

With the new sancations appearing inevitable, the lobby has asked the government to ensure the measures against Tehran would be gradual so that oil companies had more time to diversify supplies, de Simone said in a telephone interview.

There was no immediate comment from Italy’s foreign ministry which chaired the meeting.

Italy, which relies on Iran for about 13 percent of its total crude imports, would be able to replace an eventual shortfall of Iranian supplies with imports from Saudi Arabia, de Simone said.

“It would not be easy to replace Iran (with heavy oil imports) … Saudi Arabia is the only country which could replace Iran …. It is the only country which could immediately increase production and exports of such kind of crude,” de Simone said .

Saudi Arabia is Italy’s No.3 crude oil supplier and accounts for about 14 percent of total oil imports to Italy, according to UP.

Italy’s major oil refiners, including Eni’s refining division and independent refiners such as ERG, Saras and unlisted API import heavy oil from Iran which is used mostly to make bitumen, de Simone said.

Russia, Italy’s No.2 oil supplier, could help fill an eventual gap in imports to be left by Iran, but it would take Moscow longer to raise crude exports than for Saudi Arabia, he said.

International oil prices have already risen on expectations of the sancations on Iran and would rise further when the sanctions are approved, he said.

UP represents major national and foreign refiners and oil product distributors working in Italy.

(Additional reporting by Roberto Landucci; Editing by William Hardy)