India takes stock of oil supplies after Iraq attack

Friday, 21 March 2003, 08:00 Hrs
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NEW DELHI: India Thursday directed its oil companies to firm up supplies from countries outside the war zone amidst fears that the U.S. attacks on Iraq could affect petroleum stocks in the country.

Dependent on imports for 70 percent of its crude oil requirements, India also took stock of petroleum supplies within the country.

The strategy put in place by the Indian government includes directing refineries to defer their annual maintenance shut downs by at least four months.

But government officials expressed optimism that the Iraq war would not last beyond a couple of weeks.

"We have told refineries not to shut down operations for maintenance now. They can do it after four months," Petroleum Secretary B.K. Chaturvedi said after reviewing the situation at a meeting with officials of oil companies.

In anticipation of the war, the petroleum ministry had last month asked oil firms to defer maintenance operations till April.

With global oil prices sliding on news of the start of war, pressure on India on the price front has eased a little, but officials say it is too early to speculate which way the prices will swing.

Oil prices fell to a three-month low after the U.S. launched missile strikes against Baghdad. While U.S. light crude slid $1.35 to $28.53 a barrel, London's Brent crude dropped $1.02 to $25.73 a barrel.

The Organisation of Petroleum Exporting Countries (OPEC) too has pledged to fill any supply gap if Iraq's supplies are disrupted.

Against the practice of Indian refineries maintaining an inventory of 15 days supplies, oil companies had tanked up to capacity in anticipation of the war.

Their total stock of some 20 million tonnes of crude and petroleum products is enough to meet domestic needs for about 45 days. This includes crude oil for three weeks.

In addition, some more stocks are expected soon with oil companies expecting to take deliveries of tankers en route to India.

"In a crunch, India has the security of domestic production, which though not adequate, would be able to generate enough for another 15 days supplies, taking the whole supply situation to 60 days," a senior official said.

India annually imports some 78 million tonnes of crude oil and produces about 30 million tonnes. The country's 17 refineries can process 2.3 million barrels of crude oil a day.

"We have enough stocks to meet the country's oil demand for next two months. There will be no shortage even if supplies from Iraq are disrupted," Chaturvedi said.

India had recently cut its imports of Basra light crude, which is currently about two to three million tonnes obtained mostly through the tendering route.
Source: IANS
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