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India BPCL manages spot crude purchases as runs fall
5/27/2021 12:00:00 AM

Indian state-controlled refiner Bharat Petroleum (BPCL) plans to manage its spot crude purchases to balance a decline in throughput while keeping its term buying steady, the company said today.

BPCL has cut its throughputs to 86pc of capacity after a 30pc slump in fuel demand this month because of a resurgent Covid-19 epidemic, finance director N. Vijayagopal said.
The company, which operates 706,000 b/d of refinery capacity including its joint-venture 156,000 b/d Bina plant, does not expect to cut term purchases or store crude on floating tankers, as happened last year when the pandemic first struck India, Vijayagopal said. It will instead adjust spot purchases, including cargoes from the US and Africa, to balance imports with runs.
BPCL will displace US with Iranian crudes if sanctions are relaxed this year. The refiner used to buy around 40,000 b/d from Iran before the latest round of US-led sanctions was imposed.
BPCL bought around 24,000 b/d of US crude in the April 2020 to March 2021 fiscal year. It declined to comment on its more recent purchases of US crude.
"We will continue to depend on Middle East crude including Saudi, Iraq, UAE'' supplies, Vijayagopal said.
BPCL added US Eagle Ford, Brazil's Tupi and Iara, Australia's Ichthys, Norway's Ekofisk and Canada's Light Sour Blend (LSB) to its mix in the 2020-21 fiscal year. It is now less dependent on Middle East crude after changing its refinery configurations.
BPCL's term purchases account for less than 60pc of its total imports, down from around 75pc previously, with the rest sourced from the spot market. The company buys around 760,000 b/d of crude, with 60,000 b/d coming from the Mumbai High fields offshore west coast India and the remainder imported.
India's refining runs have been hit by the recent surge in Covid-19 cases, which has slashed fuel demand and led to local lockdowns being imposed. But runs may stabilise next month if states relax the curbs. India's daily coronavirus case count has dipped by nearly half to just over 200,000 from a peak of more than 410,000 earlier this month.
BPCL's capital expenditure (capex) was around 110bn rupees ($1.5bn) in 2020-21. Capex will rise to Rs120bn in the current fiscal year but the company has postponed any major new projects because of its privatisation plan. The pandemic has delayed the sell-off by over a year and Delhi now expects to complete the process by December.
Source: Argus