New Delhi, Aug. 20: Bharat Petroleum Corporation Ltd (BPCL) has tied up a 1.4 million barrel crude oil deal with Iraq, but plans to wait and watch before placing more orders in view of the continuing trouble in the country. The deal is expected to help the oil major test the waters before taking a bigger plunge into the country.
BPCL chairman S. Behuria said the consignment would comprise three shiploads of Basra light crude which would be brought to Mumbai.
He said the Basra light crude suited the BPCL refinery and the low freight cost conferred a major advantage. However, the situation in Iraq had still not stabilised as the sabotage of oil pipelines was still continuing. It is, therefore, not considered prudent to go in for any long-term deal at the moment.
He disclosed that BPCL would be importing 4.45 million tonnes of crude during the current financial year, while another 4.3 million tonnes would be picked up mainly from Oil and Natural Gas Corporationís (ONGC) Mumbai High fields.
BPCL will be getting 1 million tonnes of crude less from Mumbai High this year as it has been given 1.5 million tonnes of crude from the eastern offshore Ravva oilfields for its Numaligarh refinery. Since this crude was earlier being supplied to the Hindustan Petroleum Corporation Ltd (HPCL) refinery in Vizag, BPCL has been asked to give 1 million tonnes of its crude share from Mumbai High for HPCL's Mumbai refinery.
Behuria said BPCL had shed its dependence on Indian Oil Corporation (IOC) for crude imports and this had helped it to save around Rs 100 per tonne. Freight costs had declined since BPCL was bringing crude in bigger ships directly to Mumbai and this was also helping it to schedule its crude processing plans and crude imports in a better manner to bring down inventory costs. Demurrage cost of ships due to erratic scheduling earlier had also come down drastically. The company is also saving on the 0.25 per cent commission that was being paid to IOC for canalising the imports.
Behuria said BPCL was also planning to venture into the upstream oil exploration sector and would be allocating Rs 1,000 to 1500 crore for this segment.