India's West Asian crude fix continues

The total oil imports from West Asia stood at 61.5 million tonnes during 2003-04.

India's dependence on West Asia for crude oil is expected to continue for some time even though it seeks to widen its portfolio of crude oil suppliers.

More than 68 per cent of oil imports during the nine-month period ending December 2004 were from the region. The country bought about 48.9 million tonnes from nine countries in the region, out of a total oil imports of 71.7 million tonnes, valued at Rs 85,541 crore.

The total oil imports from West Asia stood at 61.5 million tonnes during 2003-04, while countries outside the region supplied about 29 million tonnes.

Saudi Arabia continues to be the biggest exporter with 17.14 million tonnes of its crude oil finding its way to Indian refineries.

"There is big gap between the first and the second biggest importer of crude oil to India. Saudi Arabia is followed by Nigeria, a non-West Asian country, but one of the few sources of sweet crude needed by Indian refineries," said an official. India had imported 10.72 million tonnes from Nigeria till December.

Most of the Nigerian crude oil is imported through monthly and term tenders.

The Indo-Nigerian joint commission had in March 2000 agreed that Indian Oil and Nigerian National Petroleum Corporation would conclude a commercial agreement for the supply of about 6 million tonnes per annum of crude oil from Nigeria on long-term basis in stages but not much headway could be made.

With India making fresh attempts to get business in Nigeria, imports from that country are likely to increase. Besides Nigeria, there is no other significant oil source for India outside the West Asian region.

Officials give two reasons for the dependence on West Asia. The overall crude oil consumption has increased, though domestic production as a percentage of consumption has declined to 30 per cent, from 45 per cent in 1994-95. This means increased imports from the region.

Another reason cited by the official is that India was late when the race for oil and gas from other sources than West Asia began.

"Countries like Russia and Sudan will have a greater share in our import profile once our equity oil and gas start reaching the Indian shore," he said.

The increase in the range of oil suppliers will also depend on whether the domestic refineries are capable of processing more varieties of crude oil.

"Public sector refineries are tuned into processing sweet crude oil. This becomes a major roadblock for importing crude from countries like Venezuela, though Reliance has been importing crude from there for its Jamnagar refinery," said an Indian Oil executive.