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    Post Saudi attack, India in talks with Russia to up crude supply

    Synopsis

    Russia is jostling to capture market share in fast-growing India against rivals Saudi Arabia, Qatar and United Arab Emirates.

    ET Bureau
    NEW DELHI: India and Russia have discussed ways of increasing Russian crude supplies to Indian refineries following a devastating attack on Saudi Arabia’s oil facilities that has cut its output in half and reduced global supplies by 5%.

    Oil minister Dharmendra Pradhan and Russian energy giant Rosneft’s CEO Igor Sechin met on Tuesday in New Delhi to discuss the global supply situation as well as the ongoing energy cooperation between the two countries.

    “The developments in energy markets, including global crude oil supplies, in the light of the recent attacks on Saudi Aramco’s facilities, were also discussed. In this context, a special focus was on increase of crude oil supplies from Russia to Indian refineries,” according to a statement by the oil ministry.

    Saudi Arabia has assured Indian refiners that all supply commitments will be made but refiners want to be prepared for any contingency as well as have a more diversified supply base for future. Indian state refiners are in talks with Russia’s Rosneft to finalise a term-contract for purchase of Russian crude to diversify their supply sources, Pradhan said on Tuesday after meeting Sechin.

    “The parties agreed to intensify their cooperation aimed at the strengthening of energy security in India and supplying of high-quality feedstock and crude oil products to Indian customers,” Rosneft said in a statement.

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    “The focus was made on bilateral cooperation and the establishment of an efficient energy bridge based on the vertical integration concept. This includes participation of the Indian partners in production projects and investments in refining as well as the joint operations on the global and regional markets,” Rosneft further said.

    Over the years, Indian refiners have been tapping new geographies to cut their over-reliance on any one region or country. State refiners barely use Russia crude though they have occasionally used it in the past. The high freight due to the long shipping distance between Russia and India makes Russian crude uneconomical.

    But a strong diplomatic push by Prime Minister Narendra Modi and Russian President Vladimir Putin will likely help overcome the expensive freight hurdle, officials said.

    Rosneft-led consortium is reviewing an option of a two-fold increase of the refining throughput at the Vadinar Refinery, the company said. “In the first stage, the consortium commits to investment of $850 million towards the building of a petrochemical unit in Vadinar within two years,” it said.


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