The Hindu : Oil companies' stockpile for 40 days

Online edition of India's National Newspaper
Friday, Jan 10, 2003

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Oil companies' stockpile for 40 days

By Our Special Correspondent

NEW DELHI JAN. 9. The oil companies have set up a stockpile of 40 days for petroleum products and 15 days for crude oil, which can meet the country's demand for two months even if supplies from abroad are disrupted by a conflict in Iraq.

Disclosing this here, the Petroleum Secretary, B.K. Chaturvedi, said the companies have topped up their tanks to create the satisfactory inventory position. As for international oil prices, he said they were too high and that India would prefer the price band to be brought down to around $20 a barrel.

Talking to newspersons at the Petrotech conference, he said there was no proposal to merge the Indian Oil Corporation (IOC) and the Oil and Natural Gas Corporation (ONGC) though the Disinvestment Ministry had made a suggestion in this regard. The Government policy was to encourage the two companies to develop on individual strengths.

Earlier, the ONGC chairman, Subir Raha, said his company would take up the development of three new oil and gas fields at an investment of Rs. 500 crores and expected to yield up to 1.3 million tonnes of oil and oil equivalent gas. These include the G-1 offshore field in Krishna-Godavari basin, D-1 exploration block in offshore Mumbai and the recent oil and gas field east of the gigantic Vasai gas field.

The three fields together would give an incremental 150 million tonnes of oil and oil equivalent gas reserves that are expected to go on production in about two-and-a-half years. The three fields are expected to yield roughly 1.2 to 1.3 million tonnes of oil and oil equivalent gas annually. The ONGC is also seeking removal of the ban on exporting indigenous crude oil on the ground that this would not have any security implications. Mr. Raha maintained that crude oil was a tradeable commodity and not a strategic resource. He did not expect any security implications by lifting of the export ban. Besides, he pointed out that in case of contingency situations, the ONGC itself would not export.

He disclosed that the company would soon enter into a pricing agreement with refiners for its crude which has been benchmarked to West African Bonny light crude. The broad principles have been agreed and the ONGC will charge refining companies on the basis of daily price quotes of the crude of similar quality in the international oil market. The ONGC was negotiating a two-year contract with the IOC, the Bharat Petroleum Corporation Limited and the Hindustan Petroleum Corporation Limited for about 25 million tonnes of crude oil. This is the same amount produced by the company in 2001-2.

On the current fiscal, he said an increase of about one million tonnes in crude oil production is expected owing to the good results shown by the Mumbai High re-development and improved oil recovery schemes.

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