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Current Affairs 13-11-2018

  • The Indian Strategic Petroleum Reserves Ltd (ISPRL) on November 12, 2018 signed a Memorandum of Understanding (MoU) with the Abu Dhabi National Oil Company (ADNOC) in Abu Dhabi to explore the possibility of storing ADNOC crude oil at ISPRL’s underground oil storage facility at Padur in Karnataka, which has a 2.5 million tonne capacity.
  • Union Petroleum Minister DharmendraPradhan was present on the occasion along with UAE Minister of State and ADNOC Group CEO Dr. Sultan Ahmed Al Jaber.

Key Highlights:

  • Under the agreement, ADNOC is expected to store crude in compartments at Padur.
  • The MoU follows the arrival of the final shipment of the initial delivery on November 4 of ADNOC crude to be stored in another ISPRL underground facility at Mangalore, also in Karnataka, which will store 5.86 million barrels of ADNOC crude oil.
  • ISPRL is an Indian government-owned company mandated to store crude oil for emergency needs.
  • ADNOC is the only foreign oil and gas company, so far, to invest by way of crude oil in India’s strategic petroleum reserves program.
  • Significance:

    • India is an important oil market and the MoU underscores the strategic energy partnership between the UAE and India that leverages the UAE and ADNOC’s expertise and oil resources.
    • The agreement will allow ISPRL to explore, with ADNOC, opportunities related to the possible storage of ADNOC crude at Padur, which would help to significantly strengthen the country’s strategic petroleum reserves.
    • Further, it reflects the strong bonds of cooperation between India and the UAE and provides a foundation for strengthening and expanding the strategic energy relationship between the two nations.

    Background:

    • ISPRL has already built 5.33 million tonnes of underground storage capacity at three locations – Visakhapatnam (1.33 million tonnes), Mangalore (1.5 million tonnes) and Padur (2.5 million tonnes), that can meet around 9.5 days of the country’s oil needs as per consumption data of last financial year.
    • In June 2018, the Union Government had announced the creation of two new reserves, a 4 million tonnes storage facility at Chandikhol in the eastern state of Odisha and an additional 2.5 million-tonne facility at Padur.
    • The existing and newly announced strategic reserve facilities put together will provide around 21 days of emergency coverage for India’s crude oil requirements.
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