New Delhi, Feb. 23: India has sought an additional 5 million tonnes (mt) of crude from Saudi Arabia to feed its increasing refinery capacity and meet growing demand, while inviting Riyadh to invest in the country's hydrocarbon sector.
"Our relationship with Saudi Arabia is purely bilateral. We have been seeking to increase supply every year. It has nothing to do with our ties with any other country, including Iran," oil minister Jaipal Reddy told reporters.
"We have sought 5mt more crude from Saudi Arabia in 2012-13," said minister of state for petroleum R.P. N. Singh, after a meeting with Abdul Aziz Bin Salman bin Abdulaziz, assistant minister for petroleum affairs, Saudi Arabia. The demand for additional crude is seen as a contingency measure to meet the shortfall in supply from Iran.
India buys 27mt of crude per year from Saudi Arabia ' the country's largest crude supplier ' while its annual import from Iran ' the second biggest source ' is about 18.5mt.
Oil ministry officials said imports from Iran might fall this fiscal because of the sanctions imposed by the US and the EU.
HPCL plans to curtail the amount of crude it buys from Iran by 0.5-3mt next fiscal and increase its procurement from Saudi Aramco to 3.5mt from 1.75mt in this fiscal.
"Whatever Indian oil markets require, they will approach (Saudi) Aramco (Saudi Arabia's national oil firm), and as long as they can work it out on a commercial basis, we as a government don't interfere," Abdulaziz said. "We are concerned with keeping the market well supplied, and that has always been our endeavour."
He said Saudi Arabia had a spare production capacity of 2.5 million barrels per day beyond the current output of 9.8 million barrels a day.
India's refining capacity is likely to increase 22 per cent to 238mt by 2013. The country also sought more LPG to meet rural cooking gas demand. India imports nearly 2mt of LPG from Saudi Arabia.
The country also sought Saudi participation in the upstream and downstream petroleum sector, including the projects at Dahej and Mangalore.