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P. Manoj

New Delhi , Jan. 18

THE world's biggest oil firm Saudi Aramco is keen on partnering Indian Oil Corporation (IOC) for building strategic crude oil reserves in India. It has also evinced interest in the Indian petro-products retail market.

The Saudi Aramco President and Chief Executive Officer, Mr Abdallah S. Jum'ah, met the IOC Chairman, Mr M.S. Ramachandran, to discuss joint proposals in India and Saudi Arabia. Mr Jum'ah is currently on a visit to India to attend the on-going Petrotech 2005 conference.

"Saudi Aramco has said it will consider participation in building 5 million tonnes of storage capacity for strategic crude oil in Vizag and Mangalore," Mr Ramachandran said after the meeting.

IOC has formed a special purpose vehicle (SPV) to set up strategic oil storage facilities to help improve India's oil security.

The capital cost of building the facilities will be about Rs 1,650 crore, while the crude inventory will be roughly worth Rs 5,000 crore.

The storage, equivalent to 15 days of oil consumption, will boost India's existing 7.3 million tonnes of crude tankage and 6.8 million tonnes product tankage capacity.

The current total crude oil storage capacity can meet the country's oil requirement for 19 days. India has an import dependency of about 69 per cent for crude oil, of which roughly 67 per cent comes from the Persian Gulf.

According to Mr Ramachandran, Saudi Aramco has assured it was ``really committed to India, and New Delhi should consider it as its strategic storage partner. Mr Jum'ah said Saudi Arabia has been meeting India's demand and will continue to do so even during disruptions.''

India imported 23.5 million tonnes from Saudi Arabia out of the over 90 million tonnes of crude oil imports in 2003-04.

Saudi Aramco has evinced interest in entering the Indian petroleum products retail market. The company, which was one of the shortlisted bidders for the now-aborted privatisation of Hindustan Petroleum Corporation Ltd (HPCL), however made no specific proposals for its entry into the Indian market.

On its part, Saudi Aramco has invited IOC to join the proposed 400,000 barrel per day refinery the company plans to set up in Saudi Arabia mainly for exports.

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