The historic first cargo of crude oil from the Abu Dhabi National Oil Company (ADNOC), destined for Indian Strategic Petroleum Reserves Limited (ISPRL) has been loaded and is en route to India.
The cargo is the first under an agreement between ADNOC and ISPRL, an Indian government-owned company mandated to store crude oil for strategic needs, to locate 5.9mn barrels of ADNOC crude oil at the Karnataka facility in the Indian city of Mangalore.
The loading, of approximately 2mn barrels of ADNOC crude oil, was witnessed by Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, and Dharmendra Pradhan, Indian Minister for Petroleum and Natural Gas, at a ceremony in Abu Dhabi.
Dr Al Jaber said: “The strategic reserve project represents an important new energy partnership with India that leverages the UAE and ADNOC’s expertise and oil resources. With this partnership, new market opportunities will open up for ADNOC, as we not only help to ensure the energy security of the UAE’s largest trading partner, but also gain greater access to one of the fastest-growing markets for high-quality crude oil. Our increased presence in India, will also catalyse demand for our own refined and petrochemical products.”
The implementation of the strategic reserve agreement follows ADNOC’s announcement, in February, that an Indian consortium of three companies, comprising ONGC Videsh, the Indian Oil Company and Bharat Petro Resources, had been awarded a 10% interest in Abu Dhabi’s new offshore Lower Zakum concession.
Pradhan said: “The UAE is the first country to invest in India’s Strategic Reserves Programme. This important partnership will further strengthen the close energy cooperation that exists between India and the UAE and builds on the historic acquisition of a stake in the Lower Zakum offshore concession by Indian Companies.
“The strategic reserve will provide a boost to India’s energy security and help us deal with supply side disruptions. While part of the stored oil will be used for commercial purposes by ADNOC, the major part will be purely for strategic purposes."
Indian energy demand is forecast, by the International Energy Agency, to grow by more than any other country in the period to 2040, propelled by an economy that will grow to more than five-times its current size and by population growth that will make it the world’s most populous country. Indian energy consumption is expected to more than double by 2040, accounting for 25% of the rise in global energy, and the largest absolute growth in oil consumption.
India is 82% dependent on imports to meet its crude oil needs, 8% of which is supplied by the UAE. In addition to helping to ensure energy security, the oil storage facilities enable ADNOC to efficiently and competitively meet market demand across Asia.