Utkal Reporter Bureau | 3 October 2017
India received its first consignment of crude oil from the US on Monday to mark the “start of a new chapter in the history of Indo-US trade in oil and gas sector. “ This arrangement is hoped to maintain stablity in price of Oil and strengthen its enrgy security in India.
MT New Prosperity, a Very Large Crude Carrier (VLCC), of 2 million barrels capacity arrived India at the Paradip port, Odisha on Monday with 1.6 milliom barrels of crude for Indian Oil Corporation, the largest public sector refiner in India. IndianOil will process the crude at its East-Coast base refineries, located at Paradip, Haldia, Barauni and Bongaigaon.
Sunjay Sudhir, Joint Secretary (International Cooperation) in the Ministry of Petroleum and Natural Gas said that the inclusion of the US as a source for crude oil imports by India’s largest refiner will go a long way in mitigating the risks arising out of geo-political disruptions. He hoped that the new arrangement would also usher in price stability and energy security for India, which is witnessing robust growth in demand for petroleum products.
As per a press release by IOC, IndianOil has placed a cumulative order 3.9 million barrel from the US. Bharat Petroleum and Hindustan Petroleum, India’s two other public sector refiners have also placed orders for about 2.95 million barrels and 1 million barrels respectively for their Kochi and Vizag refineries from the US. The total volume of the crude presently contracted by Indian public sector refineries is, therefore, 7.85 million barrels. The three refiners are sourcing sweet, sour and heavy crudes for their refineries which are equipped to handle complex mix of crude oils.
Indian companies, both public and private, have made sizeable investments in US Shale assets with a total investment of approximate US $ 5 billion.
Indian companies have also contracted MMTPA of LNG from the US and the first shipment is expected to be delivered to India in January 2018, reads the IOC statement.
In the recent times, India-US bilateral relations have developed into a strategic partnership of global significance. Prime Minister Narendra Modi, during his visit to the US in June 2017 had mentioned that India was looking to strengthen its hydrocarbon engagement with US. The deal to source crude from the US came through shortly after the visit of PM to the US. The sourcing of the crude from the US is, therefore, a step towards strengthening of India-US bilateral relations in the hydrocarbon sector. The US and India are the world’s largest and third largest consumers of energy respectively. Rich in hydrocarbon assets, the US can be a significant supplier for Indian demand.