RIL (Reliance Industries Limited) , India’s leading energy giant signs a deal with Venezuela’ s PDVSA paving way for an increase in the quantity of oil to India (RIL). This 15 year old deal signed in Carcus on Tuesday will increase the supply of crude oil per day to around 4,00,000 barrels from the present amount of 2,70,000 barrels per day in accordance with the 2008 agreement. Oil Minister Rafael Ramiraz mentioned that they would pull off the deal by initially sending 3,00,000 barrels and increase the count to 4,00,000 within a span of time.
This agreement to seep in ultra heavy crude from the Orinoco belt will enable India to fulfill its energy requirements that is going at a swelling rate. Besides, it will also root for an increase in production in the Venezuelan state owned petroleum company. The key associates in the meeting include Venezuela’s energy minister and president of PDVSA, Rafael Ramirez, executive vice – president of Reliance, PMS Prasad and members of Indian embassy in Caracas.
BN Kanpur, former director of Indian Oil Corporation mentioned that companies like RIL have been competent in processing colossal amount of heavy crude and ultra crude that are relatively 8 % to 10% cheaper enabling them to enjoy a higher gross refining margin of around $10/barrel. Their sophisticated refinery has served to be a reason for the same.
Mukesh Ambani, Chairman, and CEO of RIL stated that the company intended to source eight new crudes that will leverage the margin at the Jamnagar refinery that presently has around 1.3 million barrels per day of crude on an average basis.
With Indians looking out for alternatives other than Iran owing to the western sanctions, Venezuela is making headways. In fact, Reliance Industries that used to source substantial amount of crude oil from Iran until fiscal 2010 put an end to its dealing with Iran since 2011. Rafael Ramiraz, Oil minister mentioned that Reliance has been supportive to the Venezuelan state oil company PDVSA for developing a project in the Orinoco extra heavy crude belt. He also mentioned that they would be working together in the Ayacucho area especially in Boyaca block 4.
India’s crude oil requirements have been rising incessantly. At present, it imports 83% of crude oil. The crude oil import that accounted for 163.59 million tonne in 2010-11) rose to 172.11 million during 2011-12. Indian refineries have also increased their processing from 196.5 million tonne in 2010-11 to 204.8 million tonne crude oil.