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New Delhi: India has saved Rs 5,000 crore in foreign currency after investing capital at global low oil prices to fill its underground Strategic oil storage The Petroleum Ministry said on Wednesday that eliminating insurance against any supply or price disruption.
While 5.33 million tonnes of emergency storage – enough to meet India’s oil needs for 9.5 days – was built by the government in underground rock caves at Mangalore and Pandur in Karnataka and Visakhapatnam in Andhra Pradesh, state-owned. In April, oil companies were asked to buy import oil when global rates fell by two decades.
The ministry said in a tweet, advantage advantage India leveraged its strategic reserves to full capacity, taking advantage of lower crude oil prices due to the COVID-19 situation.
Globally, oil prices fell after demand for coronovirus.
Storage in Mangalore and Padur was half-complete and some space was also available in Vizag storage. These were filled by purchasing oil from Saudi Arabia, UAE and Iraq.
The ministry said that crude and LNG sourcing has been further diversified to strengthen India’s energy security.
Indian Oil Corp (IOC), the country’s largest oil firm, entered into a long-term contract for sourcing crude from the United States in 2019-20.
The Ministry signed a contract for the first time in 2020 to import 2 million tonnes of Urals grade crude oil from Russia’s Rosneft.
“The first Russian cargo of 2 million barrels under contract was received by the IOC in Paradip on April 8, 2020,” it said.
In just two years, bilateral hydrocarbon trade with the US increased from almost negligible in 2017 to 11 percent of total two-way trade, it said. “America is the 6th largest source of crude oil imports, while India has become the 4th largest export destination for US crude.”
However, it did not provide details.
India’s Strategic Petroleum Reserve Unit (ISRPL) built underground storage at Mangalore and Pandur in Andhra Pradesh and Visakhapatnam in Andhra Pradesh as insurance against supply and price disruption.
Mangalore has a total storage capacity of 1.5 million tonnes. Half of this was previously hired by the Abu Dhabi National Oil Company (ADNOC) to store crude oil. The remaining half was filled with oil brought by state-owned oil companies in April / May.
The largest of the three storeys, Padur has a total capacity of 2.5 million tonnes (about 17 million barrels). ADNOC signed in November 2018 to take half of this capacity but never actually held oil in it. Currently, the government-sour crude fills half of the Padur capacity, and the remaining 1.25 million tonnes of crude oil is now being sourced from Saudi Arabia.
There is a small amount of unfinished space in the storage of 1.33 million tonnes of Visakhapatnam which was loaded with Iraq’s crude oil.
While the oil to be deposited in the three caverns will belong to the government, the government is not paying for it.
State-owned Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Sources said that Corp Limited (HPCL) as well as Mangalore Refinery and Petrochemicals Limited (MRPL) were asked to store oil from Middle East countries.
India gets 83 per cent of its oil needs through imports. Its refiners maintain 65 days of crude storage, and when added to the planned and acquired storage by ISPRL, the Indian crude storage tally lasts for about 87 days. This is very close to the 90 days of storage mandated by the IEA for member states.
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