The Union Cabinet on Wednesday allowed Abu Dhabi National Oil Co (ADNOC) to export oil from its Mangalore strategic petroleum reserve (SPR), a minister mentioned, marking a coverage shift that might improve overseas participation as authorities seeks to develop its storage capability. Allowing ADNOC to export its oil mirrors a mannequin adopted by international locations corresponding to Japan and South Korea which permit oil producers to re-export crude storage. India doesn’t enable oil exports.
“The move will facilitate trade for ADNOC,” Prakash Javadekar, minister of atmosphere, advised a information briefing.
ADNOC had been looking for permission from the Indian authorities for the export of its oil from the cavern because it was discovering tough to promote to Indian refiners, a few of which have lower crude processing as a result of falling demand.
ADNOC can now export oil saved within the Mangalore SPR in overseas flagged ships. So far Indian flagged ships have been used for coastal motion of the oil from the cavern.
Indian corporations can have a primary proper of refusal in case of any re-exports by ADNOC, a authorities supply mentioned.
India, the world’s third-biggest oil importer and client, imports about 80 per cent of its oil wants and has constructed strategic storage at three places in southern India to retailer as much as 5 million tonnes oil to guard in opposition to provide disruption.
Government additionally plans to construct strategic storage at Chandikhol in Odisha and Padur in Karnataka for round 6.5 million tonnes of crude.
The Indian Strategic Petroleum Reserve Ltd has leased half of the 1.5 million tonnes capability in Mangalore storage to ADNOC, whereas ISPRL has retained the rest.
The earlier lease allowed ADNOC to promote solely 35% of its oil saved in Mangalore to Indian refiners and one other 15 per cent with permission from the federal government. The the rest was saved for India’s wants.