* Made loss on Iranian oil trading shortly before embargo
* Cannot pay $2.3 bln to Tehran due to sanctions
* Previous attempts to settle debt failed to get approval
By Dmitry Zhdannikov
LONDON, March 20 (Reuters) - Oil major Royal Dutch Shell lost money trading Iranian crude in 2012 shortly beforea European Union embargo and still owes $2.3 billion to Tehranfor oil purchases.
The details, revealed in Shell regulatory filings, is thefirst disclosure of its dealings with Iran in 2012, when it keptbuying Tehran's oil right up to the mid-year EU embargodeadline.
The loss raises questions about Shell's decision to continuetrading with Iran in the first half of 2012, taking advantage ofan exception for pre-existing contracts, when many of its rivalshad stopped.
The firm said its trading division generated a gross revenueof $481 million in 2012 on Iranian oil purchases and a net lossof $6 million. Condensate and fuel oil purchases from Irangenerated a gross revenue of $631 million and a net profit of $4million, failing to compensate for the loss in crude.
"None of these purchases has been paid for, and allcontracts were terminated and activities ceased before June 28,2012," said Shell referring to the date when sanctions onIranian oil came into force.
"Currently, we have approximately $2,336 million payable to,and $11 million receivable from, National Iranian Oil Company.We are unable to settle the payable position as a result ofapplicable sanctions," Shell said.
Shell suspended all trade with Iran before June but failedto settle its accounts with the National Iranian Oil Company(NIOC) ahead of the embargo, which was imposed as part of theWest's standoff with Iran over Tehran's nuclear programme.
Shell ceased upstream activities and suspended new businessdevelopments in Iran back in 2010 and is closing itsrepresentative office in Iran, it said.
REPAYMENT DILEMMA
Shell said it would not comment further on its trading withIran in 2012 and could not comment on how it planned to repayits debt to Tehran.
Industry sources previously told Reuters the company wasworking on a number of options including a grain barter deal viaU.S. agribusiness giant Cargill.
The deal was blocked by authorities in Europe and the UnitedStates. It came after Shell was denied permission by the Britishgovernment to pay Tehran direct via bank transfer. Sanctions barEuropean banks routing payments for oil back to Iran.
Shell was among critics of the EU embargo with its chiefexecutive Peter Voser saying last year that "from a purecommercial prospective" EU consumers would be the main losersbecause the embargo would mean higher prices.
While oil prices recorded an all-time high average in 2012of above $111 a barrel, prices fell from a peak near $130 inApril after Saudi Arabia opened the taps and a boom in U.S.shale oil production offset fears about the loss Iran's supply.
Iranian output more than halved to around 1 million bpd,down from 2.5 million bpd before the sanctions.
At the beginning of 2012, chief executive of Shell's rivalTotal, Christophe de Margerie, also cast doubt aboutsanctions, saying Iran would reroute its oil to other markets.
Total stopped buying Iranian oil at the start of 2012despite buying big volumes in 2011, when it purchased 49 millionbarrels of oil and refined products worth 3.7 billion euros($4.81 billion).
Italy's Eni purchased over 7 million barrels ofIranian oil in 2011 paying $742 million.
