As the world faces turmoil from the ongoing Middle East situation, state-run Oil and Natural Gas Corporation (ONGC) on Friday announced that its board has given in-principle approval for the development of a 1.75 million tonne strategic petroleum reserve in Mangaluru, a move that will increase India’s emergency crude oil storage capacity.As the world’s third largest importer and consumer of crude oil, India is dependent on imports for more than 88 percent of its crude oil requirements. Against the backdrop of geopolitical uncertainty and volatility in global oil markets, strategic petroleum reserves remain a key element of the country’s energy security framework.
Changes in ONGC’s strategic oil reserves
In a stock exchange filing, the company said the proposed facility, along with associated infrastructure, will be developed as Phase-I expansion of the existing strategic petroleum reserve in Mangaluru.ONGC did not disclose the cost or implementation schedule of the project. However, it added that the board has authorized the company to discuss with the central government on expansion of commercial use of the facility, subject to necessary regulatory approvals.India launched its Strategic Petroleum Reserve (SPR) program to strengthen the country’s energy security by maintaining emergency crude oil reserves, which can be used during periods of supply disruption or sharp rise in global crude oil prices. These reserves are maintained in addition to the operational crude stocks held by oil marketing companies and refiners.Under the first phase of the programme, underground rock caves with a total storage capacity of about 5.33 million tonnes were constructed in Visakhapatnam in Andhra Pradesh, Mangaluru in Karnataka and Padur in Karnataka. These facilities are managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a special purpose vehicle operated under the Oil Industry Development Board.The government has also approved the second phase of the SPR programme, which includes expanding the storage facility at Padur and creating a new strategic petroleum reserve at Chandikhol in Odisha. It aims to significantly increase India’s emergency crude oil storage capacity.