U.S., Japanese expertise sought for oil reserves

By SiliconIndia   |   Wednesday, 18 June 2003, 07:00 Hrs
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NEW DELHI: The petroleum ministry is sending a technical team to the U.S. and Japan to prepare a blueprint for building up India's strategic oil reserves.

The team, comprising experts from Oil and Natural Gas Corporation, Engineers India and Indian Oil Corporation, will visit the US to prepare a blueprint for phased building of 45 days strategic oil reserves.

Petroleum minister Ram Naik told reporters on Monday the U.S. has offered to support any industry expertise required by India to create its own strategic petroleum reserves.

The capital cost of building 45 days reserves (15 million tonne) would be Rs 4,350 crore. In the first phase, 15 days reserves are being planned. "The location, sourcing of crude, type of storage, maintenance and how to fund the construction and cost of crude will be explored," Naik said.

"The US stores 700 million barrels (about 95 million tonne) reserves in salt caverns. We don’t have such natural gifts and therefore facilities at other countries like Japan which stock oil in steel containers would also be examined," he said.

Naik said the expert committee would prepare a report in six months after which it would go to the Cabinet. The US plans to expand the capacity to 1,000 million barrels (135 million tonne).

At present the country stores reserves at four sites with an inventory of 604 million barrel (82 million tonne). The drawdown capability of these four reserves is 4.4 million barrels per day.

The Prime Minister on February 3 this year had approved the project for building 45 days strategic reserves, at an estimated cost of Rs 4,350 crore and an inventory (crude) carrying cost of Rs 1,800 crore annually. In the first phase, 15-days storage capacity is being planned at an estimated cost of Rs 1,250 crore, by 2006. u

Naik termed his three-nation roadshows to promote investments in oil and gas exploration as successful and said he expected big names to bid for 24 oil and gas blocks and nine CBM blocks on offer. "The recent discoveries have made Indian acreage attractive to foreign investors. Response at the roadshows in London (June 5-6), Calgary (June 9-10) and Houston (June 11-12) was very encouraging," he said.

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