India signed the long-term contracts as part of efforts to diversify its energy mix by importing crude oil from non-OPEC sources.
New Delhi: The state-owned Indian Oil Corp. ltd. signed long-term oil supply contracts with Brazil’s Petroleo Brasileiro SA (Petrobras) and Colombia’s state-owned company Ecopetrol SA, strengthening the country’s energy security.
The contract with Petrobras for 1.7 million metric tons per annum (mmtpa) was signed during Indian Petroleum and Natural Gas Secretary Pankaj Jain’s visit to Brazil last week, where he also met the CEO of Petrobras, Caio Paes de Andrade. The long-term contract with Ecopetrol was signed in Singapore.
Mint had signaled the intention of India, the world’s third-largest oil importer, to sign the long-term contracts as part of efforts to diversify its energy mix by importing crude oil from non-OPEC sources. (Organization of Petroleum Exporting Countries).
In a tweet, India’s Ministry of Petroleum and Natural Gas said Jain had had productive discussions with Petrobras CEO Caio Paes de Andrade on mutually beneficial deals for the export of crude oil to India since. Brazil and the export of petroleum products to Brazil.
“He also discussed collaboration in the refining, biofuels and PE sectors,” the tweet said and added, “Witnessed the signing of a 1.7 MMTPA futures contract between @ IndianOilcl and #Petrobras.”
This is the first-ever futures contract between an Indian company and Petrobras and comes against the backdrop of state-owned subsidiary Bharat Petroleum Corporation Ltd (BPCL) Bharat PetroResources Limited (BPRL) plans to invest $1.6 billion to develop the BM-SEAL-11 project in Brazil.
India’s Cabinet Committee on Economic Affairs (CCEA) in July approved the additional investment in the project which is expected to see production from 2026-27, in which BPRL has a 40% stake and Petrobras with a 60% stake. % is the operator.
“#IndianOil is committed to enhancing India’s energy security! In line with this objective, we have today signed a futures contract with Colombian national oil company Ecopetrol in Singapore as part of our continued efforts to diversify our crude oil supply,” said Indian Oil Corp. said in a tweet.
Indian Oil Corp. is commissioning its 15 mtpa Paradip refinery, which has a complexity factor of 10.7 based on the Nelson Index and can process high sulfur crude. India is a refining hub in Asia, with an installed capacity of over 249.36 million tonnes per annum (mtpa) across 23 refineries. It plans to increase its refining capacity to 400 mtpa by 2025. Major Indian refiners include IOC, BPCL, Hindustan Petroleum Corporation Ltd (HPCL), Nayara Energy Ltd (formerly Essar Oil) and Reliance Industries Ltd.
“A Memorandum of Understanding between @BPCLimited and Petrobras for long term cooperation has also been signed,” India’s Petroleum and Natural Gas Ministry said in a tweet.
BPCL has a refining capacity of 5.3 mmtpa. These long-term crude oil supply contracts are the result of negotiations between governments on preferential prices for India and stability of supply. India has tried to diversify its crude oil energy import basket, with its main sources of crude oil imports being Iraq, Saudi Arabia, UAE, Nigeria and the United States. .
Andre Aranha Correa do Lago, Brazil’s Ambassador to India, previously told Mint that Brazil is emerging as a central player in the oil market, currently being the world’s seventh-largest crude oil producer and exporter, and poised to rapidly become the world’s largest crude oil producer and exporter. 5th. world’s largest producer and exporter of crude oil.
“Today, India is the third largest market for Colombian crude oil,” Mariana Pacheco Montes, Colombian Ambassador to India, told Mint.
OPEC’s production cuts have weighed heavily on India’s energy market. The country also asked Opec for a reduction in the official selling price, an extension of the credit period from 30 days to 90 days from the bill of lading, a discount on freight and an open credit based on the solvency of the refineries. state-run Indians. India called for a global consensus on “responsible pricing”. India has also consistently argued for a correction in prices and conditions on the so-called Asian premium. Since most Asian countries are mainly dependent on Western Asia to meet their energy needs, customers on the continent pay the Asian premium compared to the prices paid by the United States or the EU.
Source: Living Mint