India Continue to Buy Crude Oil from Iran

Indian public sector companies have already placed orders with Iran for crude oil supply during November, a senior Government official said.

“Our public sector companies have already placed orders for the month of November with Iran,” said Sunjay Sudhir, joint secretary for international cooperation at the Ministry of Petroleum & Natural Gas.

“Iran, historically, has been a key supplier of crude for India,” he stressed after presenting investment opportunities in the Indian Strategic Petroleum Reserve programme Phase II (ISPR) to Singapore-based investors.

“In India, we are guided by our consideration for energy security,” Sudhir said.

He also said Indian officials were in talks with the US on waivers relating to Washington’s sanctions on dealing with Iran.

Sixty-five per cent of India’s crude supply comes from the Middle East from Iraq, Saudi Arabia and Iran. The other two main suppliers are Venezuela and Nigeria.

Crude oil supply from the US has been choked due to pipeline and terminal infrastructure at the supply points. “The constraints are on the US infrastructure side,” he said.

India’s has imported about 30 million barrels of US crude over the last year, starting October, 2017. India imports over 80 per cent of its crude oil needs.

Touching on the ISPR II programme, Sudhir said “we are exploring the Public Private Partnership (PPP) model”.

The final investment model will depend on investors’ participation, he said. The Indian Government’s participation will depend on how the investors respond to ISPR II.

Investors are being sought for the $1.6 billion cavern-type facilities at Chandikhol in Odisha and Padur in Karnataka for storing 6.5 million metric tons of crude oil.

The ISPR I, in partnership with ADNOC of Abu Dhabi, is for holding 5.33 million metric tons of crude oil, on a seven-year contract basis.

National security is served by the fact that there is always the minimum threshold, with the Government having the first right of refusal, said Sudhir.

ISPR II would be a contractual obligation based on a seven-year contract as is the case for ISPR I with ADNOC.