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IOC submits report on creation of oil reserves

By Our Special Correspondent

NEW DELHI Oct. 1. Even as the U.S. is stepping up pressure for a strike on Iraq, the Government is working out contingency plans to deal with any eventuality, including blockage of crude supplies from the Gulf. These include a proposal to locate strategic reserves of crude oil at five different locations. This would ensure inventory levels of 15 days' requirements for crude oil in case of any crisis.

Stocks of oil products such as petrol and diesel are sufficient to meet any emergency demand as these currently exceed 45 days requirements in the country. The oil companies are also in the process of "topping up" storages to ensure that the full level of inventories is available in any contingency. In addition, the companies are tying up alternative sources of supply to ensure that the oil imports in the pipeline are not disrupted. Giving this assurance here today, the chairman of the Indian Oil Corporation, M.S. Ramachandran, said his company had submitted a report on the need for strategic oil reserves to the Government, which was now being considered. Discussions were on to finalise these proposals.

Addressing a press conference, he said there was no need to worry about availability of oil stocks either in case of a conflict involving Iraq or any border tensions. He recalled that the oil industry had ensured during all previous crises, including the Gulf war, that there was no disruption in supply. This record would be maintained even now.

In the case of crude oil, however, he conceded that stock levels were not as high as in the case of oil products. The IOC had, therefore, submitted a report on the creation of strategic oil reserves. The proposal being examined currently is to set up reserves at five locations in different parts of the country to provide an additional 15 days of inventories. Besides, the oil companies had broad-based supplies over the years. They had tested 45 varieties of crude to ensure that any blockage from some areas could be made up from other sources.

Referring to the war clouds over Iraq, Mr. Ramachandran said that even if Iraqi crude supplies were completely stopped, the OPEC had assured that it would be willing to make up the shortfall of roughly two million barrels a day.

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