Indian refiners look beyond Iran for oil

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, July 20 -- Indian refiners, faced with Iran’s uncertain ability to provide adequate levels of oil supplies, say they are now looking to Kuwait, Saudi Arabia and the UAE for increased shipments of crude oil.

Mangalore Refinery & Petrochemicals Ltd., India’s biggest buyer of Iranian oil, said the availability of Iranian crude “may be difficult” and that supply “may not continue” indefinitely.

MRPL attributed potential disruptions in supplies from Iran as due largely to the continuing sanctions regimes imposed on Tehran by the US, the European Union, and the United Nations.

MRPL said it also is facing difficulty in remitting the payments against import of Iranian oil due to EU sanctions and the dismantling of the Asian Clearing Union (ACU) by the Reserve Bank of India.

India's debt to Iran for unpaid oil has mounted to more than $5 billion after RBI last December stopped using the ACU, winning praise from the US which is using sanctions to force Tehran to halt its nuclear program (OGJ Online, July 19, 2011).

But the failure to pay Iran has resulted in threats by Tehran to cut supplies of oil to India as early as next month. Iran provides 400,000 b/d of oil to India, about 12% of the country’s import total.

With just 11 days until the end of July, Iran has yet to tell Indian refiners what shipments—if any—will load in August.

As a result of the uncertainty, India's Bharat Petroleum, Hindustan Petroleum and Essar Oil each are reported to have asked for 1 million bbl of extra oil from Saudi Arabia for August.

However, a US official accompanying US Sec. of State Hillary Clinton to India this week said a solution to the payment problem is in the offing and that US Treasury officials were working with India to end the impasse.

"Our Treasury is working with the relevant Indian officials. We're not there yet but I think that a solution is in sight," the official said.

Meanwhile, looking farther ahead, MRPL said it is seeking additional supplies from other producers, and that it has already finalized negotiations to purchase crude from Kuwait, which it described as a “new source” of supply, from 2011.

MRPL also said it has had “some success” in its discussions with its other term oil suppliers, namely Abu Dhabi National Oil Co. and Saudi Aramco.

“These will reduce the dependency on few sources of supply and reduce the crude supply risk,” MRPL said in its latest company report.

“Accordingly, it has been decided to finalize the term contracts for crude oil import for the year 2012-13 well in advance by September 2011, in order to have more suppliers,” MRPL said.

The Indian firm added that “it is also envisaged to import crude oil in [very large crude carriers] from far-flung areas and discharge through lighterage [until the] SPM becomes operational.”

MRPL last year proposed setting up a single-point mooring facility in the Mangalore Port area aimed at receiving oil in VLCCs. As of May, MRPL said construction of the facility was about 16% complete.

Contact Eric Watkins at hippalus@yahoo.com.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

SIBUR plans MTBE expansion at Togliattikauchuk

07/01/2015 Russian conglomerate OAO SIBUR Holding, Moscow, has started preparatory work for a project designed to expand production capacity for methyl tertia...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...

Case for Keystone XL has grown stronger, TransCanada tells Kerry

06/30/2015 Canada is taking strong steps toward combating climate change, and the proposed Keystone XL pipeline crude oil pipeline remains in the US national ...

OxyChem-Mexichem JV lets contract for ethylene storage

06/30/2015 Ingleside Ethylene LLC, a 50-50 joint venture of Occidental Chemical Corp. (OxyChem) and Mexichem SAB de CV (Mexichem), has let a contract to CB&am...

Court rejects BP, Anadarko Macondo appeals

06/30/2015 BP PLC and Anadarko Petroleum Corp. have lost separate appeals to the US Supreme Court to overturn a lower-court decision expanding their financial...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected