According to a source in the know, Indian Oil Corporation (IOC) will soon sign a joint venture agreement with international energy trader Vitol, in a big deal to increase its global presence in the crude and fuel trade. The strategic alliance is an important change to the largest state-owned refiner in India, which aims to follow the path of the world oil giants like ExxonMobil and Shell by using the vast trading network and willingness of Vitol in the market.
The proposed California and Singapore JV will be based in Singapore which is the core of the oil trading industry in Asia and it will initially operate over five to seven years, and there is an exit clause to both partners. The partnership will raise the global competitiveness of Indian oil through the improvement of its trading efficiency, minimization of costs of sourcing crude and even accessing new buyers and markets, as indicated by the source.
Presently, Indian oil and its subsidiary Chennai petroleum corporation own approximately 31 percent of the 5.17 million barrels per day (mbd) of refining capacity in India. Although the refiner is basically oil and fuel trader, using its own facilities; it is hoped that the joint venture with Vitol will turn it into an international trader.
In the case of Vitol, one of the largest independent oil traders in the world, the joint venture will cement its presence in India which is the third-largest oil consumer and importer of the world as the country shapes up to become a global refining center.
India is looking to grow its refining capacity of 5.17 million barrels per day to 6.2 million barrels per day and eventually to 8 or 9 million barrels per day by 2030, as observed by Oil Minister Hardeep Singh Puri. He observed that this growth will aid in consolidation of India as one of the three leading refining stations in the world especially since an estimated 20 percent of the global oil refining will be possibly closed by 2035.
Click Here for Chhattisgarh News
Click Here for Entertainment News