India Eyes Oil Deals with Nations Including Russia

Indian Oil Minister Hardeep Singh Puri on Tuesday announced that state-run Bharat Petroleum Corp (BPCL.NS), plans to build a new refinery and the nation is looking at signing more oil import deals with countries including Russia at discounted rates.

Puri, who took charge of the ministry for a second time on Tuesday, said Prime Minister Narendra Modi wants to provide energy at affordable rates to customers to cushion them from the volatile oil markets.

India, the world's third biggest oil importer and consumer, emerged as the biggest buyer of Russian sea-borne oil, snapping up barrels sold at a discount as Western companies halted purchases after Moscow's invasion of Ukraine in 2022, Reuters reported.

"We are a longstanding partner of Russian federation. We have had discussion with the Russians on long-term deals," Puri said.

"I am confident that both our private and public sector players will sign long-term deals with countries where they see benefit in doing so," he said, when asked if Indian state-run companies are looking at signing such deals with Russia.

While private refiners Reliance Industries (RELI.NS), and Nayara Energy have signed an annual import deal with Russia, state refiner Indian Oil Corp (IOC.NS), has not yet renewed its deal.

Nayara Energy, majority owned by Russian entities, has also signed an annual crude supply deal with a trader to buy about 8-10 million barrels each month at a discount of $3-3.50 per barrel linked to the Dubai marker in 2024.

Indian state refiners BPCL and Hindustan Petroleum Corp (HPCL.NS), are also looking at signing term deals with Russia.

Puri said the location and capacity of a new refinery planned by BPCL have not yet been finalised.

He said India wants to raise its oil output which has been stagnant for years. State-run Oil and Natural Gas Corp (ONGC.NS), has floated a tender seeking technical tie-ups with global oil majors to boost output its western offshore Mumbai High Field, he said.

Output from the Mumbai High Field has been declining since 2018. Having hit a peak of 471,000 barrels per day (bpd) in 1984-85, it produced an average 134,000 bpd in the fiscal year to March 2024.