Business | Oil & Gas
ONGC raises oil purchase guarantee with Adnoc
India's state-run petroleum exploration company, Oil and Natural Gas Corporation (ONGC) has approved the enhancement of its parent company guarantee (PCG) with Abu Dhabi National Oil Company (Adnoc) to $300 million from $200 million for crude oil purchases by its refining unit Mangalore Refinery and Petrochemicals Ltd (MRPL), according to an ONGC source.
- By Himendra Mohan Kumar, Staff Reporter
- Published: 23:53 August 29, 2008
Abu Dhabi: India's state-run petroleum exploration company, Oil and Natural Gas Corporation (ONGC) has approved the enhancement of its parent company guarantee (PCG) with Abu Dhabi National Oil Company (Adnoc) to $300 million from $200 million for crude oil purchases by its refining unit Mangalore Refinery and Petrochemicals Ltd (MRPL), according to an ONGC source.
"The increase has been necessitated by a rapid increase in global oil prices and to avoid incurring costs related to opening fresh letters of credit," the source told Gulf News.
For the same reason, he said ONGC approved the enhancement of its PCG with Saudi Aramco to $300 million from $160 million.
The enhanced guarantees will be valid up to Sep-tember 30, 2010, from the date of issue of the PCGs.
Media reports say for 2008-09, MRPL has preferred to source only the Murban crude grade from Abu Dhabi, despite signing a contract for Umm Shaif, Lower Zakum and Upper Zakum grades, as well.
MRPL's total term crude imports - from Iran, Saudi Arabia and Abu Dhabi - are projected to fall to 177,200 barrels per day (bpd) in 2008-09 from 199,800 bpd last year as it cuts purchases from Adnoc by 23 per cent.
It will fill the gap with more imports from the spot market, which will meet 20,000 bpd of its demand versus 5,200 bpd during the last financial year.
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