IOC buys record 12 mn bbls of April crude

IOC buys record 12 mn bbls of April crude

New Delhi/Singapore: Indian Oil Corp (IOC) bought crude via a third tender for April, bringing the total for the month to possibly the highest on record at 12 million barrels as the state-run firm completes refining capacity additions.

Indian state refiners are purchasing record amounts of crude as they become an export powerhouse for products ranging from naphtha to diesel, supplying markets across Asia, Europe and the Americas.

They typically benefit from government incentives that maintain their profitability even when refining margins shrink.

IOC bought one very large crude carrier (VLCC) containing 1 million barrels each of Angolan Girassol and Nigerian Yoho crudes through its latest tender for the month, trade sources said on Thursday. It also took 1 million barrels of the Azeri Light grade from the Caspian.

Glencore furnished the crude on the VLCC, while Arcadia provided the Azeri load, the sources said, although this could not be confirmed.

In previous tenders for April-loading cargoes, IOC bought mostly West African crude, including Nigerian grades such as Qua Iboe, Escravos, and Erha. The company had taken 4 million barrels in the first tender and 5 million in the second one.

The company attempts to process as much crude as possible in the second quarter to meet targets for the financial year, a source close to the operations said.

The 12 million barrels of crude IOC has purchased via tender for April is the biggest amount for any single month, Reuters records show.

IOC operates about 10 refineries across India with a total capacity of more than 1.2 million barrels per day (bpd).

Some of the supplies from the VLCC of Girassol and Yoho that IOC bought in the latest tender were earmarked for processing at its Haldia refinery, which recently increased capacity by 25% to 150,000 bpd. Haldia is IOC’s only coastal refinery and caters to the demand of eastern India.

Part of the crude bought through this tender was scheduled to reach the Barauni refinery, located in eastern Bihar state.

Chennai Petroleum, a subsidiary of IOC, plans to double the capacity of the Manali refinery to up to 390,000 bpd by 2014 from 190,000 bpd, company officials said last month.