Hindustan Petroleum Corporation Ltd (HPCL) may start importing crude oil from sanctions-hit Iran from December, if the issue over insurance of ships ferrying oil is resolved.

“The Ministry has given feedback that it (insurance problem) would be resolved. This month, things would get formalised. For the remaining four months, we can get around 0.8 million tonnes from Iran,” said B.K. Namdeo, Director (Refineries) of HPCL.

Insurance issue 

However, Namdeo cautioned that unless the insurance issue gets resolved, HPCL would not place any order with Iran. In 2013-14, the Government-owned refiner has not imported any crude oil from the Islamic nation. Last fiscal, HPCL had bought about 2.3 mt of crude oil from Iran.

Indian Energy Insurance Pool

India proposes to set up Rs 2,000-crore Indian Energy Insurance Pool to help refineries get Iranian crude oil. Though Indian insurance companies are not governed by the US and the EU sanctions, they do depend on re-insurance from Western companies because of the high risks involved.

Iran's nuclear programme

The sanctions against Iran’s disputed nuclear programme discourage global re-insurers from taking on the risk.

Namdeo said that HPCL has substituted Iranian crude oil with more supplies from Iraq. In the current financial year, the refiner and oil marketing company would import nearly 5 mt from Iraq. It also buys crude oil from Saudi Arabia.

HPCL has a crude oil demand for nearly 11-12 million tonnes a year.

Vizag refinery

HPCL targets to fully operate its Vizag refinery from February. The Government-owned company had partly shut down the plant after a major fire in August.

Right now, the refinery is processing about 17-18 thousand million tonnes (TMT), which would go up to 23 TMT in December. From February, it would achieve its full capacity of around 26.5 TMT, Namdeo added.

HPCL shares were trading at Rs 212.55, up 0.66 per cent at around 12.50 pm on the BSE.

 

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