IndianOil may follow RIL to Venezuela
Mumbai   18-Apr-2008
India is looking upon Venezuela as a white knight as its state-owned refiner-marketers grapple with raging oil prices. The oil ministry has asked market leader IndianOil Corporation to tap the Andean country for cheaper crude that will yield higher margins and help reduce overall losses accruing from selling motor and kitchen fuels at government-capped prices. At a recent meeting with top IndianOil executives, ministry officials told the company to "explore processing of Venezuelan crude as private sector Reliance Industries has got the same at much discounted price". Venezuelan crude is "heavy" and sells cheaper than the "light" oils— that form the pricing benchmark for global trade—but has lower yield of high-end products. Refiners around the world and India are preparing their old unite to process heavy crude after blending with lighter variety with the aim of raising refining margins. All new refineries are being planned for heavy crude. Reliance has been buying Venezuelan crude from spot markets and last week worked out a deal for five million tonnes a year. The ministry's directive came after IndianOil director B N Bankapur told officials the company processed 15 types of crude-—mostly low-price heavy oils—in 2007-08 to improve its margins by 30 cents a barrel in the April-December period of 2007.