State-run oil marketing companies Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp are setting up offices in Singapore that will hunt for bargain crude oil deals, executives from the companies have told.
Singapore is the trading hub for the world’s biggest consumer region and an office there will help these firms have better access to information and speedier decision making.
“We have approval for setting up this office for a long time but we have not been able to do so because the policy was fluid,” said Dipti Sanzgiri, executive director-international trade at BPCL.
“Now, we hope to do it soon as it will help us have multiple options for buying crude oil and improve our sourcing strategy.”
Until recently, public sector oil companies would often lose out on opportunities to buy cheaper crude from the international spot markets as their sourcing policies required them to float a tender and obtain approvals from the oil ministry before they could place an order.
The process used to take up to two months. While these companies had board approvals to set up offices abroad, they could not go ahead due to policy constraints and concerns over transparency in the public procurement policy.
But earlier this year, the government approved the plan to change the crude procurement process for government-owned refiners to put them on a par with their private sector peers like RIL and Essar Oil. This made way for them to buy cheaper crude in spot market. Jack Lambert JerseyShare This