Hpcl to Buy up to 40,000 bpd of Basra From Total

Source: Reuters 5/22/2013, Location: Middle East

Hindustan Petroleum Corp will buy up to 40,000 barrels per day (bpd) of Basra light oil from France's Total at a discount to the official selling price, said a source at the Indian firm.

HPCL will lift 15,000 bpd of the Iraqi oil with an option to buy another 25,000 bpd, said the source, who declined to be named as he is not authorised to speak to media. He said that the deal was signed in the first week of May, but declined to give details on pricing.

HPCL is also looking to buy 60,000 bpd from Iraq's State Oil Marketing Organisation (SOMO) compared to 40,000 bpd last year, as it plans to cut purchases from Saudi Arabia and has halted imports from Iran due to insurance problems triggered by western sanctions.

Sanctions imposed by the United States and Europe to force a halt to a controversial nuclear programme that Tehran says is for peaceful purposes saw Iran's oil exports more than halve last year, costing it $5 billion a month in lost revenue.

The sanctions have driven refiners in India, Iran's second-largest oil buyer, to reduce imports because local national insurers have said that cover and losses on processing the crude would not be payable by European reinsurers.

HPCL operates a 166,000 bpd Vizag refinery in southern India and a 130,000 bpd plant in western Maharashtra state.

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