Govt to sell half of Mangaluru strategic oil reserves by yr-end

New Delhi, October 21

India has started selling crude oil from its strategic reserves to state refiners with a view to soften the blow from surging global crude prices, while also creating space for leasing out to private and international companies.

“We have started selling to oil marketing companies. This will help to create space that we will then offer for leasing,” Indian Strategic Petroleum Reserves Ltd (ISPRL) CEO HPS Ahuja said on Thursday.

As much as 0.3 million tonne of Upper Zakum crude stored at the Mangaluru cavern has already been emptied and the remaining 0.45 million tonne will be sold by the end of the year.

ISPRL will lease out Mangalore cavern of 0.75 million tonne capacity to state-owned Mangalore Refinery and Petrochemicals Ltd (MRPL).

“MRPL has bought the crude the government had stored at Mangaluru at market rate,” he said adding that MRPL wants to store Saudi crude at Mangaluru SPR.

Mangaluru strategic petroleum reserve (SPR) has two caverns of 0.75 million tonne capacity each. ADNOC of the UAE has stored Upper Zakum crude at Mangaluru second cavern, Ahuja said. About 0.15 million tonne of crude oil from Vizag cavern has also been sold to HPCL.

The sale follows the government decision earlier this year to liberalise its oil policy by allowing ISPRL to commercialise up to 50% of its reserves — under which ISPRL can use 20% of the volumes for trading and lease out the remaining 30% of the capacity.

The government had bought the crude when international oil prices had crashed in April/May last year to $19 per barrel and it is now earning a profit on selling it when prices have risen to $80. — PTI

Move to soften blow from surging prices

• As much as 0.3 million tonne of Upper Zakum crude stored at the Mangaluru cavern has already been emptied and the remaining 0.45 million tonne will be sold by the end of the year
• Indian Strategic Petroleum Reserves Ltd will lease out Mangalore cavern of 0.75 million tonne capacity to state-owned Mangalore Refinery and Petrochemicals Ltd