Indian Strategic Petroleum Reserves Ltd Current Affairs - 2019
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The Union Cabinet chaired by Prime Minister Narendra Modi has approved the filling of Padur Strategic Petroleum Reserves (SPR) in Karnataka by overseas National Oil Companies (NOCs). The filling of the SPR will be under PPP model and is being undertaken to reduce budgetary support of Union Government. The SPR facility at Padur is underground rock cavern with total capacity of 2.5 million metric tonnes (MMT) having four compartments of 0.625 MMT each.
Indian Strategic Petroleum Reserves Ltd. (ISPRL) has constructed and commissioned underground rock caverns for storage of total 5.33 MMT of crude oil at three locations namely Mangalore (1.5 MMT), Vishakhapatnam (1.33 MMT), and Padur (2.5 MMT). The total 5.33 MMT capacity under Phase-I of the SPR programme is currently estimated to supply approximately 9.5 days of India’s crude requirement. Government also has given ‘in principle’ approval for establishing additional 6.5 MMT SPR facilities at Chandikhol in Odisha and Padur in Karnataka in phase II which is expected to augment India’s energy security by 11.5 days according the consumption data for FY 2017-18.
India received first consignment of 2 million barrels of crude oil from United Arab Emirates (UAE) for its strategic petroleum reserve (SPR) at Mangaluru (on west coast), Karnataka. This first consignment from UAE fill one of two strategic reserve caverns at Mangaluru under agreement between Indian Strategic Petroleum Reserves Ltd (ISPRL) and Abu Dhabi National Oil Company (ADNOC).
Central Government under phase I of SPR programme had announced to build three underground crude oil storage facilities with total capacity of 5.33 million tonnes at Vishakhapatnam (Andhra Pradesh, storage capacity of 1.33 million tonnes), Mangalore (Karnataka, 1.5 million tonnes) and Padur (Kerala, 2.5 million tonnes) to provide energy security of 10 days of consumption in response to external supply disruptions. They are maintained by ISPRL, a special purpose vehicle (SPV), which is wholly owned subsidiary of Oil Industry Development Board (OIDB) under Ministry of Petroleum & Natural Gas.
Note: In 2017-18 budget, Government as part of phase 2 of SPR programme had announced to set up two more such SPR at Chandikhole (Odisha) and Bikaner (Rajasthan). This will take the strategic reserve capacity to 15.33 million tons.
During official visit of Prime Minister Narendra Modi to UAE in February 2018, ISPRL and ADNOC had signed agreement under which ADNOC will store about 5.86 million barrels of crude oil in India’s SPR facility at Mangalore at its own cost. The agreement made ADNOC first private foreign entity to store crude oil in Indian SPR facility. The agreement stipulates that during emergency oil shortage situation Indian government will use entire available crude oil stored by ADNOC in Mangalore SPR facility for its use. It also allows ADNOC to sell part of crude oil stored at its own cost to Indian refineries during normal times.
India-UAE Hydrocarbon relations
India is 82% dependent on imports to meet its crude oil needs. UAE is 6th largest crude oil source for India and supplies around 6% of petroleum requirement. India and UAE recently elevated their bilateral relationship to comprehensive strategic partnership especially in energy sector, transforming from buyer-seller relations to two-way investment relations. The relationship was further strengthen with recent acquisition of 10% stake in UAE’s Lower Zakhum offshore producing field by Indian public sector oil and gas companies and investment by ADNOC in Indian SPR facility.