PM pushes for enhancing storage facilities for crude

Oct 20,2021

Prime Minister Narendra Modi on Wednesday called for enhancing storage facilities for crude oil during a virtual meeting with chief executives of global oil companies.

Those who attended the meeting included Amin Nasser, president and CEO of the world’s biggest oil producer Saudi Arabian Oil Co, Russia’s OAO Rosneft chairman and CEO Igor Sechin and London-based BP Plc CEO Bernard Looney.

“Talking about the oil sector, he said that the focus has shifted from ‘revenue’ to ‘production’ maximization. He also spoke about the need to enhance storage facilities for crude oil,” the Prime Minister’s Office said in a statement.

This comes against the backdrop of plans by Indian Strategic Petroleum Reserves Ltd (ISPRL) to sell 2.17 million barrels of crude oil each to Hindustan Petroleum Corp. Ltd (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL) by December, totalling 4.34 million barrels.

This is the sixth such meeting that Modi has held with CEOs of energy majors. Attendees also included petroleum and natural gas minister Hardeep Singh Puri, Schlumberger Ltd CEO Olivier Le Peuch, Honeywell president and CEO Bryan Glover, Reliance Industries Ltd chairman Mukesh Ambani and Vedanta chairman Anil Agarwal.
Modi’s call comes as India reels under high transportation fuel prices.

India’s strategic petroleum reserves have started supplying crude oil to state-owned refiners. Last year, India bought crude oil at $19 a barrel to fill up its 5.3 million tonnes (mt) of strategic reserves, saving $685.11 million in the process. However, India has an existing crude storage capacity of 5.3 mt built at a cost of $600 million sufficient to meet around nine-and-a-half days of India’s crude oil requirements. The government has also approved the construction of an additional 6.5 mt of strategic crude oil reserves to support 12 days of crude oil requirements.

In comparison, countries that are part of the International Energy Agency (IEA) hold 1.55 billion barrels of public emergency oil stocks. In addition, 650 million barrels are held by industry under government obligations and can be released as needed.

“Prime Minister recounted that since 2016, the suggestions provided in these meetings have been immensely useful in understanding the challenges faced by the oil and gas sector. He said that India is a land of openness, optimism and opportunities and is brimming with new ideas, perspectives and innovation. He invited the CEOs and experts to partner with India in exploration and development of the oil and gas sector in India,” the PMO said.

Speaking at the Fifth India Energy Forum by CERAWeek, Puri said, “India believes that access to energy must be affordable and reliable.”

India has been making repeated appeals to the Opec- plus grouping that also includes Russia to hike production, as global energy markets across fuel sources including crude oil, gas and coal have been on a boil due to inadequate investments in view of the energy transition.