Indian Oil Corp (IOC) will next week import a shipload of crude oil from Iraq to fill up the nation’s maiden strategic oil reserves to insulate it from supply disruptions.
India, which is 79 per cent dependent on imports to meet its crude oil needs, is building emergency stockpiles with millions of barrels of crude that mirror the reserves that the US and its western allies amassed after the first oil crisis of 1973 to 1974.
Underground storages are being built at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka to store about 5.33 million tonnes (28 million barrels) of crude oil.
This is enough to meet nation’s oil requirement for 11-12 days. The first of the storages at Visakhapatnam (Vizag) is ready and IOC and Hindustan Petroleum Corp Ltd (HPCL) have been tasked to import Basra Light crude oil of Iraq to fill it, official sources said.
IOC will import a very large crude carrier (VLCC) of Basra Light crude oil on June 10, they said adding HPCL will import a VLCC in July/August.
In all, IOC and HPCL will bring in 2 VLCCs each with 2 million barrels of Basra Light oil. The Finance Ministry has provisioned Rs 2,399 crore for buying crude oil to fill the Vizag facility. Indian Strategic Petroleum Reserve Ltd (the firm that is creating the reserves) has been asked to use cheaper oil to fill the storage, sources said.
Visakhapatnam facility would have the capacity to store 1.33 million tonnes of crude oil in underground rock caverns. Huge underground cavities almost ten storey tall and about 3.3 km long are being built.