Store our oil and take 2/3rd for free: UAE’s offer to India
NEW DELHI: In a first of its kind deal, UAE’s national oil company Adnoc has agreed to store crude oil in India’s maiden strategic storage, and give two-third of the oil to it for free.
India, which is 79% dependent on imports to meet its crude oil needs, is building underground storages at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka to store about 5.33 million tonnes of crude oil to guard against global price shocks and supply disruptions, PTi reported on Thursday.
Abu Dhabi National Oil Company (Adnoc) is keen on taking half of the 1.5 million tonnes Mangalore facility, oil minister Dharmendra Pradhan said on Wednesday.
It will stock 0.75 million tonnes, or 6 million barrels, of oil in one compartment of Mangalore facility. Of this, 0.5 million tonnes will belong to India and it can use it in emergencies. Adnoc will use the facility as a warehouse for trading its oil.
The 1.33 million tonnes Visakhapatnam storage, and 2.5 million tonnes Padur stockpile together with 1.5 million tonnes Mangalore storage will be enough to meet India’ oil requirement of about 10 days.
After talks with visiting UAE minister for energy Suhail Mohammed Al Mazrouei, Pradhan said tax issue remained to be sorted out before Adnoc could begin storing oil at Mangalore.
Congress-ruled Karnataka government has not yet agreed on waiving VAT on the crude oil imported for the strategic storage, which UAE wants to use to stock oil when prices are low and supply to its customers when rates are good.
Besides Adnoc, Kuwait Petroleum Corp (KPC) has also evinced interest in hiring a part of the maiden strategic storage.