Eni, Italy's biggest oil and gas group, is still owed over $1 billion worth of oil by Iran and has a special exemption enabling it to continue receiving that crude despite an EU embargo on Iranian oil, its chief executive said.
"The amount is in a range of $1.0-1.4 billion," CEO Paolo Scaroni said in a meeting with foreign reporters on Friday.
Iran for years has been using oil to pay back Eni for decade-old deals. Three years ago Eni was owed around $3 billion in oil.
The long-simmering confrontation between the West and Iran over its nuclear programme entered a decisive phase in January. and the United States and European Union devised new sanctions to prevent Tehran from selling oil. Iran says its nuclear programme is for peaceful purposes.
EU countries with existing contracts to import crude from Iran can continue with them only until 1 July.
Scaroni said Eni was exempt from the embargo since it was the subject of a "special rule" granted by both the United States and EU covering oil it receives from Iran as payment for investments already carried out.
Under the agreement, Eni withdraws about 10,000 barrels per day from Iran, he said.
At the same time, Eni has been reducing its purchases of Iranian crude, which have been in addition to the amounts of the oil the group withdraws under the special rule, Scaroni said.
He said the company is looking for alternative crude suppliers such as Saudi Arabia, which has enough capacity to boost crude supplies to international markets.
Eni's oil and gas output in Libya, which stood at about 280,000 barrels of oil equivalent before last year's civil war in the oil-rich African country, is now some 20 per cent below pre-war levels, Scaroni said.
Responding to market talk that Eni could sell part of its stake in the giant Mamba gas field in Mozambique, Scaroni said it was too early to make such a decision, although he adding that a global oil and gas company or a power utility could be potential buyers.
Eni, which is focused on developing its oil and gas reserves, has "very modest appetite for big acquisitions" but could opt for small deals to boost its resources, he said.
Eni is the biggest foreign oil operator in Africa.
The loss of Iranian imports could be painful for the Italian refining sector, which traditionally was heavily dependent on Russian Urals crude and Iranian oil, he said.
Italy's crude imports from Iran accounted for 13.7 per cent of total oil imports last year, when Iran was Italy's fourth-biggest oil supplier, according to data from the country's oil refining industry body Unione Petrolifera.
Eni can reduce capacity at its loss-making refining division by temporarily halting operations if markets remain depressed, but bound by an earlier agreement with trade unions, the group would not close refineries until 2014, Scaroni said.
"If the market remains weak we can reduce capacity. But we have a commitment not to close any plants until 2014," he said.
Scaroni would not comment on whether Eni would shut down any of its refineries beyond 2014.
He said Eni will restart its 70,000 barrel-per-day Porto Marghera refinery near Venice in early May as planned after suspending production in November for six months.
Eni's refining and marketing division has lost 1.2 billion euros over the past three years, leading to speculation the group might downsize its refining operations.