Govt expanding list of foreign firms to buy crude

Tags: News
In a bid to widen supply sources, the government is expanding the list of foreign firms that can sell crude oil to state-run oil companies, by including global giants like Italy's Eni and Russian companies.

Besides national oil companies of oil producing nations, the government had on May 21, 2001 permitted state refiners to buy crude oil from top 10 foreign firms. Of this list, a few firms have subsequently merged and some are no longer major players in global oil production and supply business.

The Oil Ministry has now decided to revise the list of multinational companies with whom the PSU oil companies can enter into term contracts for supply of crude oil, official sources said.

Currently, refiners like Indian Oil Corp are allowed to buy crude oil from 10 MNCs -- Exxon (which has merged with Mobil), Shell, BP, Elf (merged with Total Fina), texaco (merged with Chevron), South Korea's SK, Chevron, USX of USA, Spain's Repsol and Nippon Mitsubishi of Japan.

In the new list now being prepared, suppliers from South Korea, Spain and Japan as well as USX of USA have been dropped while Eni, Valero Energy, Russia's Lukoil, Conoco Phillips, Occidental and Marathon have been added.

The new list comprises of 13 MNCs, sources said.

Oil refiners buy crude oil from suppliers in Middle East and elsewhere on term or fixed quantity contracts as well as through spot tenders. Term quantities are fixed at the beginning of the year and contracts entered into.

Sources said that for 2014-15, state refiners IOC, Bharat Petroleum Corp (BPCL), Hindustan Petroleum Corp (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL) require 125.12 million tons of crude oil.

Of this, 25.52 million tons will be sourced from domestic fields and the remaining 99.60 million tons will be imported.

Of the imports, 80.51 million tons will be done on term contract and the remaining 19.09 million tons on spot tender basis.

IOC plans to buy 44.40 million tons on term and another 10.30 million tons spot tender basis. BPCL will import 13.48 million tons on term, HPCL 10.90 million tons and MRPL 11.73 million tons.

State refiners together account for about 56 per cent of the nation's refining capacity.

Sources said the term contracts will be on the basis of official selling price of that country.

EDITORIAL OF THE DAY

  • Enhanced allocations are needed for research to ‘Make in India’ for India

    Even as India flaunts its ambitious ‘Make in India’ initiative from February 13, it spurs several questions.

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Urs Schoettli

The importance of Indonesia

A few weeks ago, the wo­rld was shocked by a ...

Rajgopal Nidamboor

Try to awaken the archaeologist within

Our mind is far ahead of René Descartes’ famous maxim, ...

Bubbles Sabharwal

Social media versus real life

It’s amazing how social media brings out the best side ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture