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India has oil stocks to last 2 months: Naik
A Correspondent in Mumbai | March 20, 2003 17:13 IST
Union Petroleum Minister Ram Naik said that India has enough stocks of petroleum products to last at least two months.
He made the statement at a press conference in Mumbai on Thursday, hours after the United States attacked oil-rich Iraq.
India currently imports 1.7 million barrels of crude oil per day, with almost 64 per cent coming from the Middle East.
"We have large stocks of crude oil, petrol, diesel, kerosene and liquefied petroleum gas, which will last us for at least two months," Naik said.
Naik said India does not think that the war would last for over two months.
He said India's recent acquisition of oil equity in an oil field in Sudan would also help meet any possible supply disruptions."Our share in the Sudan field means we will get 3 million tonnes per year of crude oil."
India's state-owned Oil and Natural Gas Corporation along with Oil India Limited has bought a 25 per cent stake in Greater Nile Corporation from Canada's Talisman Energy.
The project near Bentiu, 750 km south of the capital Khartoum, pumps about 230,000 barrels a day of oil which is shipped by pipeline to the Red Sea.
The other partners are China National Petroleum, Malaysia state oil company, Petronas and Sudan's Sudapet.
"Our oil security will be further strengthened because of this transaction. We have made a conscious choice to spread our purchases and not depend on the Middle East too much," said Naik.
Refiners told to defer maintenance shutdowns
The petroleum ministry has also put into place a few contigency measures to deal with the situation. All 17 refineries in India have been asked to postpone their plant maintenance shutdowns till the situation improves.
India has also had informal discussions with countries outside the war zone for emergency supplies if necessary. Naik has assured that the country too can step up domestic crude output to meet a temporary shortfall.
As part of its long-term plans, India is considering more acquistions and has zeroed in on 3-4 oil blocks in countries like Myanmar, Iran and US.
"The blocks where we would like to acquire equity have been finalised and we are working out the details. It is part of our strategy to have more oil equity abroad in the region apart from the Middle East," Naik said.
A month ago, during a review of India's preparedness for a war, in a meeting with the prime minister, deputy prime minister and the Planning Commission, the petroleum ministry had suggested that the country's tankage capacity be increased for greater oil security.
Though the suggestion was accepted, implementation was seen to require an investment of Rs 4,000 crore (Rs 40 billion). To decide on the modalities of how the capital for the project could be raised, the government will appoint an consultant to advise on the process, Naik said.
He also reassured consumers that domestic oil companies would try their best to cushion consumers in in case global crude oil prices shoot up.
"Over the last one year crude oil prices have increased by 60-70 per cent. However, not all of that has been passed on to the consumers in India. Even now, the government is vigilant and will ensure that consumers do not suffer as a result of high international oil prices. After all, oil companies are public sector units and they will protect the interest of the citizens," he said.
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