India, US to discuss strategic oil reserve: Naik

India will consult with the United States on building a 45-day strategic oil reserve, Oil Minister Ram Naik told reporters on Tuesday.

"I will visit the strategic reserves maintained by the USA at Bryan Mount near Houston on June 13 to study the aspects of developing and maintaining the critical reserves of crude oil," he said.

"The visit will help India in planning and financing its own strategic reserves in the country."

Asked if the United States would help India build the reserve, Naik said: "That will be discussed."

India is also consulting with the Paris-based International Energy Agency on the building of strategic oil stocks. The IEA manages oil security issues for 26 industrialised nations and is also working with China on developing a strategic reserve.

Naik is travelling to London (Jun 5-6), Calgary (Jun 9-10) and Houston (Jun 11-12) for road shows aimed at attracting global oil majors to bid for exploration blocks offered under the fourth round of India's New Exploration Licensing Policy.

India, which consumes about 100 million tonnes of oil products a year, imports 70 per cent of the crude oil requirement for its 17 refineries that can process 2.3 million barrels per day.

Prime Minister Atal Bihari Vajpayee, had on February 3 approved the project for building 45 days (15 million tonnes) strategic crude reserves, at an estimated capital cost of Rs 4,350 crore (Rs 43.5 billion) and an inventory (crude) carrying cost of Rs 1,800 crore (Rs 18 billion) per annum.

Naik said the locations and financing of the project are yet to be finalised.

"There are two ways of building reserves. One is that the government provides the cost as a budgetary grant and the second is to raise money through levy of cess on petroleum products," he said adding nothing has been finalised as yet.

During the road shows, Naik would emphasise the greatly improved prospects of discovering oil and gas in the country in view of the large gas discovery in Krishna-Godavari basin last year, discovery of oil in Rajasthan and the finds in Vasai (western offshore) and Cambay basin (Gujarat).

The delegation would make presentations demonstrating the globally competitive fiscal package offered under NELP, the changed investment climate wherein decisions are taken in a time bound manner and the attractive geological aspects of the blocks being offered under NELP-IV.

The government has invited global bids for 24 exploration blocks, which include 11 onland, 12 deepwater blocks and one shallow water block.

Besides Naik, the delegation comprised of petroleum secretary B K Chaturvedi (for roadshows in Calgary and Houston), additional secretary M S Srinivasan (for London), director general of the Directorate General of Hydrocarbons Avinash Chandra and joint secretary J M Mauskar.

Additional inputs: PTI