Indian Strategic Petroleum Reserves Ltd’s (ISPRL) efforts to attract foreign funds for filling under ground caverns with oil have received a lukewarm response from the foreign investors. ISPRL recently organized road shows cum business meets at Singapore, London and Mumbai to attract foreign funds. However, lack of clarity on several policy related issues has deterred many investors who attended the road shows at these places. As per the current Export Policy, crude oil can be exported only through Indian Oil Corporation Ltd. (I0CL), thus making ISPRL’s proposition unviable for foreign national oil companies.
ISPRL is currently building storage of 1.33 million metric tons at Visakhapatnam, 1.5 million metric tons at Mangalore and 2.5 million metric tons at Padur in Udupi. While Visakhapatnam facility is expected to be ready in the financial year 2014-15, Mangalore and Padur facilities will become operational in the years 2015-16 and 2016-17 respectively. ISPRL requires roughly Rs.24,000 crore at a price of $105 per barrel, to fill up 5.33 MMT of underground storage facilities. Of this, Rs. 5,000 crore is required in the next fiscal as the Visakhapatnam strategic crude storage facility will be ready by then. With foreign funds remaining elusive, Petroleum ministry is making concerted efforts for allocation of a minimum of Rs.5000 crore in crude purchase for the Vizag facility from the exchequer in 2014-15.