India is shortlisting crude oil traders, who will be allowed to forge long-term relations with state-run refiners for crude supplies instead of buying them through tenders, government and industry officials said.

"We are working on a list of oil majors who can help the public sector companies in their international deals," a petroleum ministry official, who did not want to be identified, told Reuters yesterday.

Liberalisation of the oil and gas market in India, which has an annual refining capacity of about 114 million tonnes and imports two-thirds of its crude needs, has attracted several oil traders and officials of international exchanges to an oil and gas conference in New Delhi.

At present Indian Oil Corp, India's largest refiner, is the only company which is allowed to buy crude oil for state-run refiners. But this will change in April, when India will lift several controls on the oil and gas sector.

Oil traders at the conference said they expected to build relationships with state-run firms such as IOC, Hindustan Petroleum Corp and Bharat Petroleum Corp after the sector is freed up.

"We are specially interested in when the deregulation comes along," said Steven Kelbrick, an official of London-based Arcadia Petroleum Ltd.

Kelbrick, a speaker at the conference, said he expected his firm, a wholly owned subsidiary of Mitsui and Co, to be shortlisted by India's oil ministry.

"We are specially interested in being able to do some long term relationships and long-term contracts with the three real entities of IOC, BPCL and HPCL," he said.

"At the moment we are going through a period of registration we will then be a part of this list of these ten companies that will be allowed by the ministry to enter into these long-term commitments."

An official of an international commodities exchange, who did not want to be identified, said Indian companies, particularly Indian Oil and Reliance Petroleum were keen to hedge their risk and were trying to understand the market.

"We are seeing that Indian oil companies, Reliance and Indian Oil, have been around and looking very actively because they come to us to see how the instruments to manage their price risks work," the official said.

"We know they are absolutely interested in what happens in the exchange, what happens in the over-the-counter instruments and so on. So they are extremely interested in all the markets, not just a particular exchange."