The United Arab Emirates’ national oil company, the Abu Dhabi National Oil Company or ADNOC, is keen on storing crude oil in India’s maiden storage facility, according to the Press Trust of India. The UAE has also offered two-thirds of the stored oil to India for free, Indian Minister of State for Petroleum and Natural Gas Dharmendra Pradhan said on Wednesday.
India is building underground storage facilities at Visakhapatnam in Andhra Pradesh state, and Mangalore and Padur in Karnataka state, with a capacity to store about 5.33mn tonnes of crude oil to guard against global price shocks and supply disruptions.
“We are very happy that the UAE is interested in the strategic reserve project. ADNOC and ISPRL are working to sort out all issues for early implementation of the project,” Pradhan told a press conference in New Delhi, referring to the Indian Strategic Petroleum Reserve Limited (ISPRL) to store crude at India’s soon-to-be completed strategic oil reserve project in Mangalore.
ADNOC has decided to use half of Mangalore’s 1.5mn tonne facility, which would make up 6mn barrels of oil.
“ADNOC will partner ISPRL for phase 1 of the project, while an agreement for a similar arrangement for the second phase has also been proposed,” Pradhan said.
However, Pradhan has said that tax issues need to be sorted out before ADNOC can start using the storage facility.
“There are certain taxation, VAT (Value Added Tax) and revenue-related issues — these are being dealt with on an urgent basis,” he said.
Pradhan said India, which imports about 80% of its oil, was also on track to increase its oil imports from the UAE. “The UAE makes up for 8% of India’s oil imports. The total imports from UAE amount to 16.11mn metric tonnes for the current fiscal, of which Indian public sector companies imported 10.2mn metric tonnes. In the next financial year, India will increase its imports from the UAE by another 2.5mn metric tonnes,” he said.
His comments came following a meeting with the UAE’s Energy Minister Suhail Mohamed Al Mazrouei, ahead of the arrival of His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, on a three-day official visit to India.
“We discussed a lot of hydrocarbon projects and the discussion was very fruitful and cooperative,” Pradhan said. “We have placed several proposals for consideration before the UAE as part of the $75bn investment plan. These include scope for investments in refineries, LNG terminals and pipelines — from the OPaL petrochem complex in Gujarat (western Indian state) to the HPCL-GAIL petrochemical complex in Andhra Pradesh to Bina refinery expansion in Madhya Pradesh (central Indian state).”
Pradhan also said that there was a lot of untapped potential on both sides in the hydrocarbon sector. “Indian state oil companies such as ONGC, IOL and BPCL are all interested in seeking exploration opportunities in the UAE, while others are interested in acquiring a stake in the Abu Dhabi Oil Company (ADCO) for onshore oil operations,” he said.
