IOC to buy 57 mt crude in '06-07

Indian Oil Corporation will buy about 57 million tonnes of crude oil in 2006-07 for its refining requirements. About 45 mt of this quantity will be imported. According to company executives, the company would buy 12 mt sweet oil from domestic companies.

The company will need to import about 18 mt of sweet crude and 27 mt of sour crude. Sweet crude has sulphur content lower than 0.5 per cent, while sour crude has higher sulphur content. IOC, with a 54-mt refining capacity, is the biggest refiner in the country, but most of its refineries are tuned in to process sweet crude.

The company's Panipat refinery, currently undergoing expansion, will be putting up a desulphurisation plant of 6 mt capacity. The plant will be commissioned in April next year and will be able to process sour crude.

India imports crude oil to fulfil 70 per cent of its requirements, which rose from just over 90 mt in 2003-04 to 95.314 mt in 2004-05. IOC imported almost 32 mt of crude oil and over 3 mt of petroleum products, while exporting over 1 million tonne of products in 2004-05.

IOC executives said the company was also trying to negotiate a crude oil supply contract with Nigeria, a sweet crude producer, which supplied 2 mt under a term contract during 2004-05. IOC is seeking about 4-6 mt from Nigeria under the term contract.

A term contract involves a purchase agreement with oil exporting companies for a certain period and comes with supply surity. "It does not have any price advantage over spot purchases because crude price in both the cases is determined at the time of loading," said an IOC executive.