960423

India-Kuwait oil

product term-renewal

talks in May

SINGAPORE: State-owned Indian Oil Corp (IOC) is to start talks next month on renewing its annual term contract with Kuwait Petroleum Corp (KPC) to import diesel and kerosene, industry sources said on Tuesday.

A KPC delegation might visit India in the second week of May to start term talks for fiscal year 1996-1997, they said.

IOC normally renews its term contract with KPC first and uses the terms of the deal as the basis for its talks with Abu Dhabi National Oil Co (ADNOC) and Bahrain National Oil Co (BANOCO).

In its term contract for fiscal 1995-1996, India imports about 900,000 tonnes of high speed diesel and 1.08 million tonnes of superior kerosene from KPC.

IOC's 1995-1996 term imports from BANOCO amounted to about 1.32 million tonnes of diesel and 720,000 tonnes of kerosene, while its deal with ADNOC amounted to 500,000 tonnes of diesel and 300,000 tonnes of kerosene.

Traders said India's demand for middle-distillates, especially diesel, is growing at 18 percent a year. In fiscal 1995-1996 India imported about 17 million tonnes of middle-distillates in fiscal 1995-1996, out of which about 4.34 million tonnes were imported through its term contracts with KPC, BANOCO and ADNOC.

Another 1.0-to-1.5 million tonnes were bought through term tenders from KPC, Shell, Elf Trading and Caltex Trading.

The remaining 10 million tonnes were covered by monthly spot tenders.

Traders noted India has been buying more spot cargoes of diesel this year. Between January and May this year, IOC bought a total of 4.42 million tonnes of diesel.

Traders said this tender has attracted aggressive prices from a Western trader and a MidEast refiner for diesel and from a European major oil firm and the same MidEast refiner for kerosene.

They said IOC might use the offer levels in this tender as a basis for its talks to renew its annual contracts with KPC, BANOCO and ADNOC.-Reuter