As per the Commerce and Industry Ministry order, ADNOC has been given permission to re-export crude oil from its commercial stockpile at Mangalore strategic petroleum reserve at its own cost.
Mar 28, 2024
In order to give operational flexibility to the Abu Dhabi National Oil Company (ADNOC), the Government of India has given permission to the oil company owned by the United Arab Emirates to export crude oil it has stored in underground strategic storages at Mangalore.
Crude oil, which is the essential raw material for production of fuels such as petrol and diesel, is currently not allowed to be exported except through the state-owned Indian Oil Corporation (IOC).
As per a recent order issued by the Ministry of Commerce and Industry, the condition of export being allowed only through IOC would continue, but the AMI {Adnoc Marketing International (India) RSC Limited} has been exempted from STE conditions and allowed to re-export crude oil from their commercial stockpile at Mangalore strategic petroleum reserve, at their own cost.
India is the world’s third-biggest oil importer and consumer, which imports over 85 percent of its oil needs and has built strategic storages at three locations to store up to 5.33 million tonnes of oil as insurance against any supply disruption.
The storage at Visakhapatnam (1.33 million tonnes) in Andhra Pradesh, Mangalore (1.5 million tonnes), and Padur (2.5 million tonnes) in Karnataka can meet about nine days of national demand.
On January 25, 2017, the Indian Strategic Petroleum Reserves Ltd (ISPRL) had signed an agreement with ADNOC to establish a strategic crude oil storage in Mangalore. As per the agreement, the ISPRL leased half of the 1.5 million tonne capacity to Adnoc to cover its 5.86 million barrels of crude oil in underground facilities at the Karnataka facility.
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The remaining was retained by ISPRL.The idea behind leasing the storage to foreign companies was that they could store oil for sale to domestic refiners. But in case of an emergency, India held the first right on oil usage.
Adnoc had sought permission for the export of its oil from the cavern in cases where it could not find buyers in Indian refiners. After the notification, Adnoc can now export oil stored in the Mangalore storage, opening avenues for optimized utilization of resources for the company.
