Business | Oil & Gas
ONGC declares force majeure on naphtha
India's Oil and Natural Gas Corp Ltd has declared force majeure on naphtha delivery from Hazira, although market impact will be limited due to regional supply surplus with record-high Indian exports, traders said yesterday.
- Reuters
- Published: 00:00 August 11, 2006
Tokyo, Singapore: India's Oil and Natural Gas Corp Ltd has declared force majeure on naphtha delivery from Hazira, although market impact will be limited due to regional supply surplus with record-high Indian exports, traders said yesterday.
The delivery has been postponed due to heavy rain and floods, they said.
Traders differed in how many cargoes have been affected by the measure. ONGC was not immediately available for comment. It was not clear whether the flood affected ONGC naphtha production units or loading ports.
A trader said that one 35,000-tonne cargo originally scheduled for loading on August 15 and 16 from the port of Hazira has been affected by the move. The cargo was sold to Malaysia's Petronas.
Another trader said that the measure affected around three naphtha cargoes originally scheduled to be delivered in August.
Besides the August 15 and 16 cargo, ONGC has sold a 35,000-tonne naphtha cargo to Vitol for loading from Mumbai.
ONGC has cancelled its two tenders, in which it offered a total 70,000 tonnes for loading on August 26 and 27 and September 6 and 7 from Hazira.
Despite the force majeure, the impact on the market has been limited, with deep contango and naphtha crack holding steady around $60 a tonne, about half the levels hit in late June, experts say.
"The market is oversupplied," N. Ravivenkatesh, analyst at Purvin and Gertz Inc, said. He also pointed to the closure of naphtha-consuming units in India along with producing units because of flooding.
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