BP in term deal with HPCL for 6m barrels Suez Mix
Hindustan Petroleum has signed a term contract with BP Oil International for 6m barrels of Gulf of Suez Mix crude in line with a government directive issued in March this year to buy more of its imported crude through term contracts instead of from the spot market.
HPCL is the most enthusiastic of India's three state-owned refiners to follow the government's new directive and look beyond India's traditional crude oil sources in the Middle East. A start was made in July with a term contract for "small quantities" of Malaysian crude from Petronas.
HPCL describes Gulf of Suez Mix as, "one of the top ranking crudes for our refineries." Indian state refiners usually sign crude import term contracts with national oil companies but with Gulf of Suez Mix crude the Egyptian national oil company expressed its, "inability to supply us this grade of crude oil as their share is used in their own refineries and not available for export." Frustrated, HPCL turned to BP, the only other equity producer of Gulf of Suez Mix. Below are the salient features of the HPCL term contract with BP: Quantity: 0.83m tonnes (six million barrels).
This quantity can be varied upward or downward by 5% at HPCL's option, "but always subject to acceptance at the terminal" Grade: Gulf of Suez Mix as is normally exported from Ras Shukeir Price: Average of the mean of all published quotations of 'Dated Brent' published in Platts Market Wire during the entire month of pricing adjusted by the official selling price for this grade of crude as published by the Egyptian national oil company for the month of pricing Delivery: FOB Ras Shukeir Period: October 2003 to September 2004 Other terms and conditions: As per BP's conditions for sales and purchases of crude oil (2000 edition)