Aug 1 Italian oil refiner Saras has paid back 100 million euros ($112 million) of the debt it owes Iran for cargoes of crude oil taken before sanctions were imposed on the country in 2012, the company's managing director said on Monday.

Saras, which had an outstanding debt of around 350 million euros with Teheran, paid a first instalment of 50 million euros in the second quarter and another 50 million euros in July.

"We expect a smooth repayment over time," Dario Scaffardi told analysts on a conference call on second-quarter results.

International financial sanctions on Iran were lifted in January after a deal aimed at preventing the country from developing nuclear weapons but banking ties have only been secured with a limited number of smaller foreign institutions.

U.S. banks are still forbidden to do business with Iran while European lenders also have to cope with rules prohibiting dollar transactions with Iran being processed through the U.S. financial system.

Saras, which is partly owned by Russian oil giant Rosneft , used to take a significant part of its crude feedstock from Iran before the embargo on the country.

Earlier this year Scaffardi said the company had renewed its crude oil supply contract with the National Iranian Oil Company but added there were still some hurdles to overcome on the banking payment front.

"We took our first cargo of crude in June ... There are some interesting opportunities from this area in the future," Scaffardi said.

Saras, controlled by brothers Gian Marco and Massimo Moratti with a 25 percent stake each, said the payments to Iran would contribute to reducing its current net cash position of 140 million euros to close to zero by the end of the year. ($1 = 0.8956 euros) (Reporting by Stephen Jewkes; Editing by Greg Mahlich).

By Reuters