IOC plans crude spot purchase of 15.27m tonnes

Vol 8, PW 20 (12 Jan 05) Midstream & Downstream
     

Read on for full details of Indian Oils government-approved crude oil import plans for the financial year beginning April 2005.

We learn the ministry has finally backed down and accepted IOCs demand for 24.83m tonnes of imported crude on a term contract basis for FY 2005-06. This includes 8.37m tonnes of Basrah light from January to December 2005 for which government approval is already in place.

Crude oil traders note that IOC intends to make spot purchases of the balance 15.27m tonnes to meet its full requirement of 40.10m tonnes of imported crude during 2005-06. IOC reveals in a strategy paper that its crude imports during 2005-06 will be 6.66m tonnes higher than last year for three reasons: Hike in domestic crude processing capacity of 4.2m tonnes over 2004-05 1.92m tonnes lower domestic availability of crude 540,000 tonnes crude required for line fill of new pipeline feeding Panipat refinery Sweet crude will account for 4.42m tonnes of the 24.83m tonnes term contract imports and sour crude 20.41m tonnes.

Ministry officials caution IOC to restrict spot purchases to a bare minimum. IOC should also endeavour to increase term contracts for low sulphur crudes, particularly from Nigeria, advises the ministry.

Below is a list of countries from which IOC will be importing crude on a term contract for the next fiscal. Country Type Total Quantity Saudi Arabia, Saudi Aramco Arab Mix 4.5m tonnes Iraq, SOMO Basrah Light 8.37m tonnes Abu Dhabi, ADNOC Upper Zakum, Murban 1.94 m tonnes Kuwait, KPC KEC 6.5 m tonnes Iran, NIOC Foroozan 520,000 tonnes Malaysia, Petronas Labuan, Miri 1m tonnes Nigeria, NNPC Bonny, Forcados 2m tonnes Total 24.83m tonnes Below is a breakdown of the crude requirement for IOCs refineries and its two subsidiaries: Chennai Petroleum and Bongaigaon Refineries: Indian Oil Chennai Petroleum Bongaigaon Refineries Total Total processing 40.2m tonnes 9.3m tonnes 2m tonnes 51.5m tonnes Indigenous crude processing 9.04m tonnes 900,000 tonnes 2m tonnes 11.94m tonnes Imported crude processing 31.16m tonnes 8.4m tonnes 0.00 39.56m tonnes Imported crude for line fill 540,000 tonnes Total crude imports 31.7m tonnes 8.4m tonnes 0.00 40.1m tonnes