India to Pay Iran $400m Frozen Oil Money This Week

India will soon pay a third tranche of $400 million to Iran ahead of a Nov. 24 deadline to an interim deal with six world powers that allows Tehran to recover part of its overseas frozen oil revenues, industry sources said in Wednesday.

Indian oil refiners are preparing to release the payments this week, the sources said, adding Mangalore Refinery and Petrochemicals Ltd and Essar Oil will make the bulk of the payment.

The other refiners that will also make payments are Indian Oil Corp and Hindustan Petroleum Corp.

India has already paid $900 million in two installments under the interim deal that allowed Iran to recover $2.8 billion of its funds held in foreign banks, in addition to $4.2 billion paid between January and July.

"Payment could be made as early as tomorrow," said a second source. The sources declined to be named due to the sensitivity of the matter.

Western powers and Iran are in talks this week to hammer out a final deal to ease sanctions against Tehran in exchange for curbs to its nuclear programme.

Iran has said it would resist Western pressure to make what it considered to be excessive concessions in nuclear talks, highlighting obstacles that could prevent a historic deal being reached by Nov. 24.

The latest payments would be made using an existing mechanism of a series of back-to-back transactions in different currencies that are initially channeled through the Reserve Bank of India (BANKINDIA.NS) (RBI). Iran will eventually get paid in Dirhams from the central bank of United Arab Emirates.

Iran's top oil client after China, India has imported 40.3 percent more oil from Tehran in the first ten months of this year than in the same period last year, data obtained from trade sources show.

(By Nidhi Verma; Editing by William Hardy)