Reliance says it did not trade Iraqi oil

Reliance Industries today broke its silence on the Volcker report to say that the Iraqi crude oil it had purchased under the oil-for-food programme was for use in the Jamnagar Refinery and that the company had not traded any of it.

The purchases, said a statement from the company, were made at prevailing international prices and in conformity with UN norms.

"The company wishes to clarify that the Volcker Committee report itself, in no uncertain terms, states that in respect of allocations by State Oil Marketing Organisation (SOMO) of Iraq to us, no payment of any surcharge was made or committed to anybody," said the statement.

Referring to a complaint filed by activist Arun Kumar Agrawal with the Enforcement Directorate alleging that Reliance Petroleum (now merged with RIL) had paid "illegal surcharge" and indulged in "illegal trading" of Iraqi oil, RIL said several facts in the complaint were distorted and several others were false.

The company said it had, between April 2000 and May 2002, bought 30.6 million barrels of Basrah light crude oil from various trading companies at a negotiated, market-competitive price based on declared official selling prices approved by the UN.

In 2002, it also got a direct allocation from SOMO and bought 2.8 million barrels of Basrah light directly from it. RIL said all payments were made to a designated UN escrow account through letters of credit and no surcharges were paid.

"Apart from the quantities of 33.4 million barrels of crude oil mentioned above, RIL has not directly or indirectly purchased any crude of Iraqi origin during the period in question. RIL reiterates that all purchases of Iraqi crude were for use only in the Jamnagar Refinery only and RIL has not traded any quantities of Iraqi crude in the international market," said the company.

All payments, it said, were made through normal banking channels to the account of relevant trading parties. In each case, a representation was made to Reliance that the allocation was in accordance with the UN's Oil-for-food Resolution 986 and did not involve payment of any surcharge.