Government Expanding List of Foreign Firms to Buy Crude: Report
New Delhi: In a bid to widen supply sources, the government is expanding the list of foreign firms that can sell crude oil to state-run oil companies, by including global giants like Italy's Eni.
Besides national oil companies of oil producing nations, the government had on May 21, 2001 permitted state refiners to buy crude oil from top 10 foreign firms. Of this list, a few firms have subsequently merged and some are no longer major players in global oil production and supply business.
The Oil Ministry has now decided to revise the list of multinational companies with whom the PSU oil companies can enter into term contracts for supply of crude oil, official sources said.
Currently, refiners like Indian Oil Corp are allowed to buy crude oil from 10 MNCs - Exxon (which has merged with Mobil), Shell, BP, Elf (merged with Total Fina), Texaco (merged with Chevron), South Korea's SK, Chevron, USX of the US, Spain's Repsol and Nippon Mitsubishi of Japan.
In the new list now being prepared, suppliers from South Korea, Spain and Japan as well as USX have been dropped while Eni, Valero Energy, Russia's Lukoil, Conoco Phillips, Occidental and Marathon have been added.
The new list comprises of 13 MNCs, the sources said.
Oil refiners buy crude oil from suppliers in Middle East and elsewhere on term or fixed quantity contracts as well as through spot tenders. Term quantities are fixed at the beginning of the year and contracts entered into.
For 2014-15, state refiners IOC, Bharat Petroleum Corp (BPCL), Hindustan Petroleum Corp (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL) require 125.12 million tonnes of crude oil, they said.
Of this, 25.52 million tonnes will be sourced from domestic fields and the remaining 99.60 million tonnes will be imported.
Of the imports, 80.51 million tonnes will be done on term contract and the remaining 19.09 million tonnes on spot tender basis.
IOC plans to buy 44.40 million tonnes on term and another 10.30 million tonnes on spot tender basis. BPCL will import 13.48 million tonnes on term basis, HPCL 10.90 million tonnes and MRPL 11.73 million tonnes.
State refiners together account for about 56 per cent of the nation's refining capacity.
Sources said the term contracts will be on the basis of official selling price of that country.
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