Bharat Petroleum anger over Jamnagar offtake

Vol 4, PW 11 (05 Jul 00) Midstream & Downstream

Bharat Petroleumis locked in a potentially bitter dispute with Reliance Petroleum over a commitment to lift products from the latter's 27m tonnes a year refinery in Jamnagar.

At issue are supplies of diesel with a sulphur content of 0.05% - the lowest in India. A source tells Petrowatch that Bharat Petroleum resents Reliances attempts to force it to offtake the diesel when it has quantities of its own looking for a home.

Bharat Petroleum admits that diesel produced from its 6.9m t/y refinery at Mahul in Mumbai has a higher sulphur content of 0.25% but argues that this is within government norms and is not a reason to reject its own products in favour ofReliance. Soon Bharat Petroleum may have no choice.

It is reliably learnt that the Prime Ministers Office in Delhi has intervened in the dispute, following a communication from Reliance, accusing Bharat Petroleum's representative on the Oil Coordination Committee P Bhargav of "obstructionism" during negotiations. All of a sudden he (Bhargav) is sending us memos asking us why we are not lifting more of Reliances products, reveals a middle-ranking Bharat Petroleum official.

Opposition to Reliance from within Bharat Petroleum and Hindustan Petroleum is nothing new. Last year, both companies fiercely resisted government attempts to force them into an agreement with Reliance to jointly lift 50% of Jamnagar production.

Reliance spokesman Yogesh Desai confirms that the company has an agreement with Indian Oil Corporation to lift 50% of production from Jamnagar, with the balance lifted by Bharat Petroleum and Hindustan Petroleum.

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