NEW DELHI, May 10 (Reuters) - Indian Oil Corp., the country’s biggest refiner, has made its first purchase of Mexican Maya oil, a trade source said on Thursday, as the state-run firm looks to diversify its crude slate due to improved capacity and reduced imports from sanctions-hit Iran.
IOC is the first state-run firm to buy the Mexican Maya crude, already processed by Indian private refiners Reliance Industries, owner of the world’s biggest refining complex, and Essar Oil.
The IOC deal for a Suezmax cargo was struck at the official selling price from Mexico’s national oil company PEMEX and it will arrive this month, said the source, who has knowledge of the deal.
IOC will process the cargo at its 300,000 barrels per day (bpd) Panipat plant in northern Punjab state, the source added.
India’s refiners are looking at new sources of supply as they cut imports from Iran, targeted by U.S. and European sanctions aimed at disrupting its nuclear program, which the West suspects is being used for weapons. Tehran denies this.
IOC has also recently improved its processing units, which enables it to refine tough and heavy crudes.
IOC, along with its subsidiary Chennai Petroleum Corp , owns 1.314 million bpd or 30 percent of India’s refining capacity. It began buying 20,000 bpd of Azeri light crude from Azerbaijan from January under an annual deal, industry sources have told Reuters.
“If Maya suits IOC’s system and gives a better yield the refiner may look at buying oil from Mexico on a regular basis,” the source said.
Reliance buys Maya and other heavy grades from Latin America on a regular basis.
Essar Oil, received a cargo of Maya oil in March, after a gap of over a year and a half.
The share of heavy South American grades will rise in Essar’s oil processing as it has recently upgraded the complexity and capacity of its Vadinar refinery.
India aims to raise its refining capacity from the current 4.3 million bpd to about 6.22 million bpd by 2016/17. (Reporting by Nidhi Verma; Editing by Jo Winterbottom and Miral Fahmy)