Mumbai: Capitalising on low global oil prices, India will fill its underground strategic oil reserves with oil from Saudi Arabia, the UAE and Iraq as it shores up supplies to meet any supply or price disruption.
India has built 5.33 million tonnes of emergency storage -- enough to meet its oil needs for 9.5 days, in underground rock caverns in Mangalore and Padur in Karnataka and Visakhapatnam in Andhra Pradesh.
The stat Mangalore and Padur are half-empty and there was some space available in Vizag storage as well. These will now be filled by buying oil from Saudi Arabia, the UAE and Iraq, sources with direct knowledge of the development said.
Oil Minister Dharmendra Pradhan had in the last few days held talks with his counterparts in Saudi Arabia and the UAE with a view to shoring up supplies. India built the underground storages as insurance against supply and price disruptions.
It allowed foreign oil companies to store oil in the storages on condition that the stockpile can be used by New Delhi in case of an emergency. Abu Dhabi National Oil Co (ADNOC) had previously hired half of the 1.5 million tonnes of Mangalore storage.
It has stored for its commercial purposes 0.75 million tonnes of oil at Mangalore and the remaining space was empty, sources said adding the UAE's Upper Zakum crude will be bought for storing in the empty space. Padur, the biggest of the three storages, has a total capacity of 2.5 million tonnes (about 17 million barrels).