IOC looking to source 1-mn tonnes of crude from RIL's KG field

Indian Oil Corp (IOC), the nation's largest PSU refiner, is looking to buy 1-million tonnes of crude oil from Reliance Industries' KG basin field for two refineries operated by a subsidiary in Tamil Nadu.

Indian Oil Corp (IOC), the nation's largest PSU refiner, is looking to buy 1-million tonnes of crude oil from Reliance Industries' KG basin field for two refineries operated by a subsidiary in Tamil Nadu.

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"RIL had indicated that it would produce 2-million tonnes of low sulphur crude from its KG basin field. We are looking to source 1-million tonnes of this crude for two refineries run by Chennai Petroleum Corp (CPCL)," Chairman Sarthak Behuria told shareholders at the company's AGM in Mumbai on Wednesday.

CPCL, which is 51 per cent held by Indian Oil, runs a 9.5-million tonnes per annum refinery at Manali in Chennai.

It operates a second refinery at Narimanam, at Cauvery Basin near Nagapattinam, with a refining capacity of 1-million tonnes.

"We have already bought a few cargoes from Reliance through tankers," Director Refineries, B N Bankapur, said, adding the company was expecting more deliveries.

He, however, did not specify the amount of discount and international benchmarking at which RIL was selling crude to CPCL.

The MA field in KG-D6 off the Andhra coast flowed first oil in September 2008 and had produced 7,90,000 barrels till December, when output ceased due to equipment failure.

RIL had sold the first cargo of over 4,30,000 barrels of oil to Hindustan Petroleum Corp Ltds Vizag refinery in November.