New Delhi: European trader Mabanaft plans to open an office in India in the fourth quarter to coordinate trading in the country as it emerges as a lead player in oil product flows, a top company official said on Tuesday.
Mabanaft, which has international trade offices in Singapore, the Netherlands and the United States, has asked for Reserve Bank of India approval to set up the office, Barathan Pasupathi, managing director of Singapore-based Mabanaft Pte Ltd told Reuters.
Pasupathi said Mabanaft planned to open the Indian office in October-December quarter and it has hired industry veteran and former Essar executive G. P. Aggarwal as president last month to head its India operation.
“The process is underway to complete the formation of a representative office (for trading) in Q4 of 2010,” he said. “Plans are at a preliminary stage and India is a key strategic market.”
The Indian office will help strengthen trading volumes for the trader, whose main Indian deal is to buy six cargoes of 90,000 tonnes each of 10 ppm diesel from Reliance Industries, primarily to feed its fuel stations in Europe.
Pasupathi did not elaborate on Mabanaft’s further expansion plans in India. But a trade source said: “It will hire more staff after getting RBI approval.
“New opportunities have emerged after the start up of Reliance’s new refinery, so Mabanaft is looking at expanding its India operations.”
The trade source said expansion in India will help Mabanaft source enhanced quantity of low-sulphur diesel for trading and serving its European retail outlets. “Mabanaft will also look at buying 500 ppm diesel, naphtha and fuel oil for trading,” the source added.
Before Essar, 57-year-old Aggarwal was with Indian Oil Corp for about 30 years from 1976, where he was in charge of international trading and introduced risk-management activities, the first state-run refiner to do so.
Mabanaft already has a representative office in India but its activities are confined to coordinating operations of Matrix Bharat Marine Services Pte Ltd, a 50:50 joint-venture between Matrix Marine Fuels, a subsidiary of Mabanaft and India’s Bharat Petroleum Corp Ltd.
Many trading firms including Glencore, Mercuria, Trafigura, Nexen, Mitsui and Itochu have set up shop in India to coordinate their trading, as they vie for the increasing volumes of oil products flowing from India to world markets and for the supply of crude taken by Indian refineries.