Crude oil storage will be built with OIDB money

Vol 9, PW 1 (20 Apr 05) News in Brief

Oil ministry officials will soon ask cabinet to approve the use of funds from the Oil Industry Development Board to finance a strategic crude oil storage project.

There is neither any need for fresh legislation nor for amendment of the OIDB Act, oil secretary Sushil Tripathi writes in a note to cabinet. The existing Act, and the organisation created under the Act, the OIDB can very well set up and operate the strategic storage facility for crude oil.

OIDBs funds will be used to set up the terminal and also to purchase crude oil. The grant is estimated to be around Rs1640cr ($372m) and OIDB can fund this out of its existing resources, the note said.

The oil ministry has pegged the crude oil purchase costs to be around Rs5000cr ($1.13bn) and operations and maintenance of the terminal at around Rs115cr ($26m). Indian Oil has already set up a wholly owned subsidiary, Indian Strategic Petroleum Reserve, to execute the project.