India to buy 1.4 million barrels of Iraqi crude
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India to buy 1.4 million barrels of Iraqi crude

Wednesday, 20 August 2003, 07:00 Hrs
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India's state-owned Bharat Petroleum Corporation Ltd (BPCL) is in the process of finalising a deal to buy 1.4 million barrels of crude oil from Iraq.

NEW DELHI: "We are in the process of finalising the deal on term contract with supplies in November/December. We have reached an understanding with Iraq's State Oil Marketing Organisation (SOMO)," BPCL's executive director S.K. Sharma told IANS on the sidelines of a press conference here.

"We will be participating when Iraq signs contracts for the next quarter January-March as Basra Light (crude oil) is technically very suitable for our refineries and strategically very good for India," said Sharma.

With this deal, Indian companies would have finalised three term contracts for getting crude oil from Iraq.

The other deals finalised include one million tonnes by Reliance Industries and six million barrels (0.8 million tonnes) by state-owned refining and marketing major Indian Oil Corporation (IndianOil) earlier this month.

IndianOil is hopeful of getting contract for supply of three million tonnes of Basra Light this year.

"We have got a term contract for 0.8 million tonnes or six million barrels till December and are hopeful of a rollover of contract in January that will help us secure three million tonnes of Basra Light for the year," an IndianOil spokesperson said.

Under the U.N.'s oil for food programme, India was getting around three million tonnes of Iraqi crude annually till last year.

With supplies from Iraq still to normalise, Indian companies are contracting for oil from different sources while taking whatever is available from Baghdad, which has pegged its oil to an average of the price of Oman and Dubai Crude average.

"We have signed up term contracts with Saudi Aramco for three million tonnes, Kuwait Petroleum for two million tonnes, Abu Dhabi National Oil Company for 1.5 million tonnes and Petronas of Malaysia for 0.5 million tonnes. This would help us to spread our risks of supplies," said Sharma.

In addition to around seven million tonnes of crude from Mumbai High, BPCL currently sources 70 percent of its remaining requirement of nine million tonnes through term contracts and the rest through spot purchases.

Source: IANS

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