With sanctions easing out again Iran, Aban Offshore has said that it has started receiving payments, and hopes to collect $280 million. While banking channels aren't fully open yet, there is a good sign they will, shortly, company officials said. Aban Offshore provides drilling and support services for offshore oil exploration and production

While addressing the analysts on company's fourth quarter performance, C P Gopalkrishnan (Deputy Managing Director & Chief Financial Officer), Aban Offshore said oil prices had risen substantially and now are now hovering around $48 per barrel, but the market condition continues to be difficult because of huge supplies.

Gopalkrishnan said with the increase in the oil prices, the company expects the activity to increase at least in the next 6-8 months, so that it sees a better trend in the coming years. This year, the company had a net loss of Rs 119 crore for the quarter on a lower revenue of Rs 629 crore.

For the whole year, the group reported a profit of Rs 51.27 crore as against profit of Rs 544.94 crore in the previous year.

There are two positive drivers, said Gopakrishnan -- slow easing of Iran sanctions, which were lifted on January 18, and recovery of oil prices.

To a question on receivables, which remained flat QoQ at around $340 million, S Srinivasan, Senior Vice-President, Aban Offshore, said of this, around $280 million was due from Iran.

"As you know the sanctions are easing slowly, so we have started receiving the payments. Between April and now, we have received about $45 million already. However, banking channels are not fully open yet, but there is a good sign that things will improve in the coming months," he said.

He said the company collected around 15 per cent of its receivables in a month and a half.� The company has started talking with the Iran Government to get more contracts so that it can deploy its rigs in Iran waters.

Aban has been in talks with companies in Iran are as far as contract deployment is concerned. These include several subsidiaries of National Iranian Oil Company, which are already the company's client. Once the company completed its contracts on the Deep Driller 2 and Deep Driller 4 rigs, it would have had to made an exit as no further jobs were available. However, after recent negotiations the company got them redeployed.

Earlier the company said the lifting of sanctions on Iran, the largest market for jack-up rigs, will make it possible for it to deploy rigs profitably as well as optimising the insurance premia.

Around 35 per cent of the company's revenue comes from the five rigs deployed in that country. The suspension of sanctions would help it improve its working capital situation.

The insurance cost, which is around nine per cent of the operating expense would reduce, would help the company to increase its profit. The removal of sanctions is also expected to increase the demand of jack-up rigs globally, said an analyst earlier.

By Business Standard