One week after the Cabinet approved the closure of the strategic underground oil reserve in Padur in Karnataka by foreign oil companies, Abu Dhabi National Oil Co (ADNOC) signed an initial agreement with the Indian Petroleum Strategic Reserves on Monday ( ISPRL), the second one by the agreement United Arab Emirates this year.
In the first phase, India built a strategic reserve capacity of 5.3 million tonnes (MT) in three locations: Vishakhapatnam (1.33 MT), Mangaluru (1.5 MT) and Padur (2.5 MT), with a cost of 4,098 crore. In the second phase, ISRPL is looking to develop two more caverns, one second in Padur and another in Chandikhol, with a combined storage capacity of 6.5 MT at a cost of Rs 11,000 crore.
Created in June 2004, the ISPRL is an exclusive purpose vehicle owned by the Oil Industry Development Board under the ministry of oil and natural gas and was assigned to develop and maintain underground caverns to store crude oil to mitigate shortages during interruptions of the offer.
Once fully covered, these reservations can last for 21 days for India in case of requirements. This will be in addition to the stock of 65 days that oil companies in the storage facilities maintain.
ADNOC is the only company that has signed final agreements for the reserves, while the Saudi state company Saudi Arabia Aramco also showed interest. Petroleum Minister Dharmendra Pradhan said earlier that some commercial companies also showed an interest in participating in India's strategic reserve program.
The agreement between ISPRL and ADNOC was signed in Abu Dhabi in the presence of the Minister of State of Pradhan and the UAE, Sultan Ahmed Al Jaber, of the ADNOC group.