The Indian government allowed on Thursday foreign national oil companies (NOCs) to fill India's Strategic Petroleum Reserve (SPR) at Padur, in a move to cut budget expenses for storage costs.
The SPR facility at Padur is an underground rock cavern with a total capacity of 2.5 million metric tons, the Indian government's press bureau said in a statement.
State-owned Indian Strategic Petroleum Reserves Ltd (ISPRL) has constructed and commissioned underground rock caverns at three sites to store a total of 5.33 million tons of crude oil, or 36.87 million barrels of crude oil, at Vishakhapatnam, Mangalore, and Padur.
In case of emergency, India has the first right to draw from the oil stored, Reuters quoted Indian law and justice minister Ravi Shankar Prasad as saying at a press conference.
Foreign NOCs have already expressed interest in signing deals to store oil at India's SPR sites.
In February this year, the Abu Dhabi National Oil Company (ADNOC) and the state-owned Indian Strategic Petroleum Reserves (ISPRL) agreed to form a partnership for the strategic crude oil storage facility in the southern Indian city of Mangalore. Under the partnership, ADNOC would store 5.86 million barrels of crude oil in underground facilities. According to ADNOC, the oil storage facility will both help ensure India's energy security and enable the Abu Dhabi company to efficiently and competitively meet market demand in India and in the fast-growing economies in Southeast Asia.
Last month, Saudi Arabia's Energy Minister Khalid al-Falih said that Saudi Aramco, the state oil giant of OPEC's largest producer and one of India's top oil suppliers, was willing to invest in strategic storage in India.
"Saudi Aramco's desire is to invest in consumer-facing segments such as retail fuels and petrochemicals, building an integrated downstream business in India as well as our commitment to invest in strategic storage," Reuters quoted al-Falih as saying at an energy forum in India in mid-October.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More