In an event held last week in Brasília, Petrobras’ CEO, Caio Paes de Andrade, received the Deputy Minister of Oil and Gas of India, Pankaj Jain, and government representatives and of Indian companies to discuss opportunities and strategic partnerships in the oil and gas market. On the occasion, Petrobras and the Indian Oil Corporation (IOC), the largest state-owned Indian oil and gas company, signed a 'Frame Agreement' oil supply contract. This model includes the option of supplying up to 12 million barrels of oil from Petrobras to the IOC. The agreement lasts for six months and can be renewed for another year.
At the same meeting, Petrobras also signed a memorandum of understanding with Bharat Petroleum Corp, another important Indian refiner, to promote negotiations and establish guidelines for cooperation for the supply of crude oil in the future.
These agreements represent important steps to strengthen the commerce between Petrobras and the state-owned refining segment in India and to leverage opportunities with other refiners in that country.
Potential Indian market
India is the third largest oil importer in the world, purchasing approx. 5 million barrels per day, surpassed only by China and the United States. Regarding seaborne imports, India is the second largest importer, coming only after China.
The IOC has an estimated production of 1.34 million barrels per day, and also controls 11 refineries in the country and accounts for 26% of the total Indian refining capacity.
The priority destination for the oil produced by Petrobras is its own refineries, while the surplus is exported. In the first half of this year, the company exported an average of 537,000 barrels of oil per day. In this sense, Petrobras is always seeking the best opportunities in the international market in order to secure the best placement for its oil.