Impact of Iraq Crisis on Import Oil

The Minister of State (I/C) in the Ministry of Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply on 09th July 2014 that currently, there is no impact on import of crude oil from Iraq due to the prevailing crisis in that country. Indian oil companies import Iraqi crude oil from the Basrah terminal located in southern Iraq and the export facilities at Basrah are operational and the loading of crude oil are going on normally.

In order to deal with any contingency arising out of further deepening in crisis in Iraq, the Indian oil companies have formulated their short and medium term contingency plans. The contingency plans, inter-alia, include the following measure:

i) The oil companies will approach other term suppliers i.e. National Oil Companies of countries with whom they presently have crude oil term contracts for additional volume, over and above the existing planned term lifting, so as to compensate for any reduction in imports from Iraq.

ii) The oil companies can also make up any subsequent uncovered shortfall in crude oil availability by increasing spot procurement of high sulphur and low sulphur grades from the International market through the tender route.

iii) Standalone refiners viz Reliance, Essar and MRPL would be requested to reserve additional stock of HSD/SKO/MS/LPG over and above the normal month to month requirement, to enable the PSU oil marketing companies to meet the domestic demand.

iv) In case there is a shortfall in availability HSD/SKO/LPG from indigenous refineries due to shortfall in crude oil availability, then the same can be imported.

v) Ministry of Railways and Ministry of Shipping could be requested for supported for support regarding priority movement of POL products and berthing of POL tankers, respectively.

vi) ONGC Videsh Ltd. (OVL) has equity sweet crude in Sakhalin-I, Imperial (Russia), Sudan (North and South), Brazil and Azerbaijan. Besides these, OVL also has equity sour and heavy crude from Colombia and Venezuela. OVL’s share of crude oil can also be brought to India.