Kuwait Petroleum Corp eyes stake in Indian refinery

New Delhi/Dubai — Kuwait Petroleum Corp (KPC) aims to pick up a significant stake in Indian Oil Corp’s Paradip refinery and supply about 60 per cent of the oil needs of the plant, set to start up later this year, three sources with knowledge of the matter said.

Gulf oil producers want to lock in customers in Asia, which is experiencing a wave of refinery expansion, as the US shale boom has hit demand for their oil in Western economies.

India, the world’s fourth largest oil consumer, imports about 80 per cent of its oil needs and plays a growing role as a regional refining hub.

The South Asian nation imports around 16 million tonnes of crude a month — more than it consumes — and exports about a third of that as refined products.

State-run IOC, the country’s biggest refiner, aims to start crude processing at its 300,000 barrels per day (bpd) coastal refinery in the eastern state of Orissa by the end of this year.

“Kuwait has sought a 50-per cent stake in the refinery and the proposed petrochemical plant, along with marketing rights for fuels,” said one of the sources, adding that IOC might settle for a smaller stake and keep control of the refinery.

This source said KPC wanted to reserve the right to later sell a part of its stake in the Indian project to any international oil company.

The sources who spoke to Reuters declined to be identified because of the sensitivity of the topic.

IOC Chairman B. Ashok did not respond to telephone calls from Reuters seeking comment, while a KPC spokesman could not immediately be reached for comment.

Kuwait wants to strengthen its role in India’s oil gas sector and wants to lease a part of its strategic storage, being built to hedge against energy security risks. Kuwait was India’s fourth biggest oil supplier in fiscal 2013/14, supplying about 409,000 bpd.