The first US crude oil cargo of 1.6 million barrels bought by Indian Oil Corporation arrived from the US at Paradip Port on October 2, 2017.
The cargo was carried on board New Prosperity, a very large crude carrier (VLCC). The ship, having a capacity of 2 million barrels of crude, left US Gulf Coast on August 19.
IndianOil will process the crude at its east coast base refineries located at Paradip, Haldia, Barauni and Bongaigaon.
IndianOil, which became the first Indian public sector refiner to source US crude, has placed a cumulative order 3.9 million barrel from the US. Bharat Petroleum and Hindustan Petroleum, India’s two other public sector refiners, have also placed orders for about 2.95 million barrels and 1 million barrels respectively for their Kochi and Vizag refineries from the US.
Calling it “a new chapter in the history of Indo-US trade”, particularly in the oil and gas sector, Shri Sunjay Sudhir, Joint Secretary (International Cooperation) in the Ministry of Petroleum & Natural Gas, said that the inclusion of the US as a source for crude oil imports by India’s largest refiner will go a long way in mitigating the risks arising out of geopolitical disruptions. Sudhir expressed hopes that the new arrangement would also usher in price stability and energy security for India, which is witnessing robust growth in demand for petroleum products.
Indian companies, both public and private, have made investments in US Shale assets with a total amount of around USD 5 billion. Indian companies have also contracted MMTPA of LNG from the US and the first shipment is expected to be delivered to India in January 2018.
Recently, India-US bilateral relations have developed into a strategic partnership of global significance. Prime Minister Narendra Modi, during his visit to the US in June 2017 had mentioned that India was looking to strengthen its hydrocarbon engagement with the US.
The deal to source crude from the US followed the visit of the minister to the US.