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Tue 8 Mar 2011 04:19 PM

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India's BPCL eyes 50% more Saudi oil in FY12

Refiner plans to import 120,000 bpd of oil from the Kingdom in next fiscal year versus estimated 80,000 bpd this year

India's BPCL eyes 50% more Saudi oil in FY12
OIL NEED: Indias Bharat Petroleum Corp (BPCL) aims to buy more oil from Saudi Arabia and other countries in 2011/12 (Bloomberg Images)

India's Bharat Petroleum Corp

(BPCL) aims to buy more oil from Saudi Arabia and other

countries in 2011/12 to feed its expanded capacity and hedge

against supply worries due to unrest in Libya and a payments

dispute with Iran.

India's No. 3 refiner plans to import 120,000 barrels per day

(bpd) of oil from Saudi Arabia in the next fiscal year beginning

April versus an estimated 80,000 bpd this year, a source

familiar with the matter told Reuters on Tuesday.

BPCL aims to process 70,000 bpd Saudi Arabia volumes at its

recently commissioned Bina refinery in Central India and the

rest at its Kochi and Mumbai plants that can together process

430,000 bpd, he said.

Oman Oil Co has a 26 percent stake in Bharat Oman Refineries

Ltd (BORL), which operates Bina refinery, while BPCL holds the

remaining 74 percent.

The source also said BPCL planned to continue lifting 10,000

bpd from Libya, 30,000 bpd from Algeria's Sonatrach and 5,000

bpd each from Malaysia and Brunei-Shell for its Kochi and Mumbai

plants.

"Companies like ADNOC, Saudi Aramco and Sonatrach have

agreed to boost supplies to compensate for oil supply loss from

Libya," he said, adding that in the next fiscal year BPCL wanted

flexibility in its crude import options.

India, Asia's third-largest oil consumer, imports more than

two-thirds of its oil needs and depends heavily on volumes from

the Middle East to power an economy that is growing about 9

percent.

With political unrest engulfing Libya and threatening to

spread to other oil producing countries, India has worried about

the stability of supplies, seeking to diversify its crude

basket.

A BPCL spokesman declined to confirm the changes in his

firm's crude import plan for 2011/12.

He, however, added: "BPCL has a process to make a tentative

plan in the beginning of the year. This undergoes periodic

review during the year.

"Necessary modifications are made based on global

developments, unforeseen circumstances and availability of

specific varieties of crude that are best for our refineries."

In 2010/11, BPCL signed an 8,000 bpd deal with Bahrain's

BAPCO and raised the imports from ADNOC by 10,000 bpd from an

initially agreed 40,000 bpd to replace 20,000 bpd of Saudi

Arabia volumes processed at Bina refinery, he said.

In the next fiscal BPCL aims to import 60,000 bpd from

ADNOC.

"If BAPCO agrees then BPCL would like to buy one million

tonne for the next fiscal," said the source, adding the Indian

refiner was also keen to raise imports from Iran to 20,000 bpd

versus 5,000 in this fiscal year if the payment issue between

the two nations could be resolved.

India's central bank, the Reserve Bank of India, said in

December payments to Iran could no longer be settled using a

clearing system run by regional central banks, winning praise

from Washington, but putting at risk imports of about 400,000

barrels per day of oil.

India has paid 1.5 billion euros ($2.08 billion) to clear

pending dues for oil imports from Iran, but a permanent

solution to the impasse has yet to decided.

BPCL also plans to import 10,000 bpd of oil from Kuwait for

Bina, taking its overall imports from the Islamic nation to

60,000 bpd versus 40,000 in the last fiscal year, the source

said.

It plans to raise supplies of term volumes for its two key

plants by 7.3 percent to 250,000 bpd and source 58,000 bpd from

the spot markets, he said, assuming supplies of 132,000 bpd of

locally produced crude oil.

"If you look at overall imports, next fiscal BPCL would be

importing 16.5 million tonnes from term contracts compared to

11.65 million tonnes this (fiscal)," said the source.

BPCL also owns a majority stake in a 60,000 bpd refinery in

northeast India and processes local crude oil at the plant.

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