The Union Cabinet has allowed Abu Dhabi National Oil (ADNOC) to export oil from its Mangalore Strategic Petroleum Reserve (SPR), with a minister marking a policy shift that said foreign participation could be enhanced because India wants to expand its storage capacity.
NEW DELHI (Natural Energy News): The Union Cabinet has allowed the Abu Dhabi National Oil Company (ADNOC) to export oil from its Mangalore Strategic Petroleum Reserve (SPR), a minister said, a policy change that could increase foreign participation as India Wants to expand its storage capacity.
Allowing ADNOC to export its oil mirror to models adopted by countries such as Japan and South Korea allows oil producers to re-export raw storage. India does not allow oil exports.
"The move will facilitate trade for ADNOC," Environment Minister Prakash Javadekar told in a news briefing.
ADNOC had sought permission from the Government of India to export its oil as it was finding it difficult to sell to Indian refiners, some of which have resulted in crude processing cuts due to falling demand.
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ADNOC can now export oil stored in Mangalore's SPR to foreign-flagged vessels. Till now Indian flagged ships were used for the cave from the coastal region of oil.
A government source said that Indian companies would have the first right of refusal in case of any re-export by ADNOC.
India, the world's third-largest oil importer and consumer, has imported about 80% of its oil requirements and has built strategic storage at three locations in South India to avoid supply disruption of 5 million tonnes of oil Can be stored.
India plans to build strategic storage for about 6.5 million tonnes of crude oil at Chandikhol in Odisha and Padur in Karnataka.
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Indian Strategic Petroleum Reserve Limited leased half of the 1.5 million tonnes capacity to ADNOC in Mangalore, while ISPRL retained the remainder.
The previous lease allowed ADNOC to sell only 35% of its oil stored in Mangalore to an Indian refiner and another 15% with permission from the government. The rest was kept for the needs of India.
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