Indian state-owned oil and gas company Indian Oil is set to establish a joint venture (JV) with Swiss energy and commodities company Vitol to enhance its international crude and fuel trading operations, reported Reuters, citing sources.
The JV will be based in Singapore and is expected to operate for five to seven years. An exit clause is included for both parties.
Indian Oil, alongside its subsidiary Chennai Petroleum, manages approximately 31% of India’s refining capacity, equating to 5.17 million barrels per day (mbbl/d).
The agreement, set to be finalised early next year, marks a strategic shift for Indian Oil, which seeks to emulate industry giants such as ExxonMobil and Shell.
Indian Oil currently trades oil and fuel for its own refineries, but the new venture aims to extend its reach into global markets.
The partnership with Vitol is expected to reduce crude procurement costs and improve margins by accessing new markets, the source indicated.
Additionally, this collaboration will bolster Vitol’s presence in India, the world’s third-largest oil consumer and importer, according to the report.
India is set to increase its crude refining capacity to around 6.2mbbl/d by 2030, with further expansion up to 9mbbl/d in the long term, according to Oil Minister Hardeep Singh Puri.
This expansion is expected to solidify India’s status as one of the top three refining hubs worldwide, especially as approximately 20% of global refining capacity faces potential closures by 2035.
Before entering discussions with Vitol, Indian Oil engaged in discussions with several other companies including bp, Trafigura and TotalEnergies.
The refiner imports most of the crude it processes across its ten facilities, which collectively have a capacity of 1.62mbbl/d.
The proposed Singapore JV is expected to facilitate Indian Oil’s export of refined fuels and leverage Vitol’s extensive distribution network.
In August this year, Indian Oil and Bharat Petroleum resumed their purchases of Russian oil for delivery in September and October amid widening discounts.
“Indian Oil and Vitol to form trading joint venture in Singapore” was originally created and published by Offshore Technology, a GlobalData owned brand.
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