The first US crude oil cargo of 1.6 million barrels bought by Indian Oil Corporation from the US was received at Paradip Port today. A sample of the crude was symbolically presented to Shri Sunjay Sudhir, Joint Secretary (International Cooperation) in the Ministry of Petroleum & Natural Gas, by Shri Anish Aggarwal, Director (Pipelines), IndianOil. Shri Munu Mahawar, Joint Secretary, Ministry of External Affairs, Govt. of India; Ms. Katherine B Hadda, US Consul General in Hyderabad, Senior Officials from Ministry of External Affairs and IndianOil were also present at the ceremony.
Calling it as a new chapter in the history of Indo-US trade, particularly in the oil and gas sector, Shri Sudhir 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.
MT New Prosperity, a Very Large Crude Carrier (VLCC), of capacity 2 million barrels of crude, left US Gulf Coast on 19th August and arrived at Paradip port today. IndianOil will process the crude at its East-Coast base refineries, located at Paradip, Haldia, Barauni and Bongaigaon.
Indian Oil which became the first Indian public sector refiner from India to source US crude 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.
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.