New Delhi, June 11: ONGC-Videsh is selling its share of one million barrels of crude from the Sudan oilfield this month to China for which it will be raking in a neat $ 26-27 million.
The last two months’ cargoes were supplied to the ailing Mangalore Refineries and Petrochemicals Ltd (MRPL) in which ONGC has a 51 per cent stake.
A senior ONGC official told The Telegraph that China had offered the best price for the oil. MRPL is reported to have adequate stocks and, if the need arises, some purchases can be made from the international market which could turn out to be cheaper.
Sources disclose that ONGC-Videsh is banking on the crude sales from the Sudan oilfield to make its net profit soar to anywhere between Rs 500 crore to Rs 1,000 crore during this fiscal.
The wide range factors in the huge fluctuations in international crude prices . If this target is achieved, the fledgling company would make a sudden leap into the big league as the net profit clocked in the last fiscal was only Rs 59 crore.
Senior ONGC officials say: “Oil security for the country does not mean that ONGC Videsh’s oil has to be directly consumed by Indian refineries. In case there is an emergency and no crude is available from elsewhere or prices spin out of control, this oil is always there.”
However, in the normal course the best economic option for the country is to sell the Sudan crude at the highest price and buy oil for Indian refineries at the lowest possible price. Since ONGC-Videsh is bringing in the dollars, these can be used to make the purchases.
“These dollar receipts are also an aspect of the country’s increased energy security,” a senior official said.
India imports around 70 per cent of its crude requirements. The price of imported crude in the past has varied over a range of $ 10 to $ 30 per barrel. This wide variation represents the element of volatility in crude prices and makes concrete economic planning difficult.
ONGC-Videsh’s stake in the Sudan oilfield, which assures the country a 3 million-tonne per annum share, reduces the share of the volatile imports by another 5 per cent. This additional comfort level at the planning level is seen as another aspect of the enhanced oil security.
The two very large crude carriers which cruised into the Mangalore harbour with the Sudan crude during the last two months can, therefore, be viewed more as a live demonstration of the increased oil security through overseas acquisitions.