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JAN 22 2016

India to double crude oil import from Nigeria through term contracts in 2016

  • Economic Times, ET Bureau / Hyderabad
  • Created: Fri 22nd JAN 2016

India plans to double its term import of crude oil from Nigeria in 2016 and may help build a refinery in Sudan and a petroleum hub in Mauritius as part of its growing engagement with African nations in the hydrocarbon sector.

"As a matter of policy, the present Indian government is keen to move towards a geographically diversified energy basket. This has resulted in India's greater focus on Africa as a vital region for sourcing petroleum products in the coming years,"

oil minister Dharmendra Pradhan said at the two-day India-Africa Hydrocarbons Conference that began on January 21 and has attracted participation from 22 African countries.

India is seeking closer ties with the resource-rich continent, hoping to source a significant chunk of its energy needs to power its economy that is growing at the fastest pace in the world.

Nigeria, the third-largest crude oil supplier to India, has now offered a term contract to supply 3 million tonnes of crude oil this year to Indian Oil Corporation, the nation's largest refiner. This is more than double of what IOC purchased in 2015 in term deals from Nigeria.

The company buys a lot more Nigerian crude in the spot market where prices are volatile. "A term deal makes it more affordable to us," said IOC chairman B Ashok. Nigeria has recently overhauled its oil contracts and is now selling directly to refiners and other downstream companies.

Sudan has sought India's help in upgrading an existing refinery or setting up a new one on the coast, said Narendra Verma, managing director of ONGC Videsh (OVL), which has investments in the country's upstream sector.

OVL has a 25 per cent stake in the 2B block that produces about 50,000 barrels a day. The production contract for the block will come up for renewal in November and OVL is seeking an extension of five to 15 years, Verma said.

Sudan is yet to pay about $240 million for the crude oil it has taken from OVL over the years. The two countries are negotiating means to settle the dues, Verma said. "For future, we are negotiating a sale-purchase agreement," he said.

Algeria, Morocco and other African nations are also seeking enhanced investment in their upstream sector and increased exports of oil and gas to India, Pradhan said. Mauritius is planning to be a petroleum trading hub and wants IOC to help in that, he said. Mauritius gets most of its oil supplies from state-run MRPL and its filling stations are run by IOC.

Tags

Mangalore Refinery And Petrochemicals Limited Gas Oil ONGC Hydrocarbon Petroleum Products Energy Refinery ONGC Videsh United States Import Petroleum Oil and Gas Hydrocarbons Power Crude Oil Trading India

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