India's Chennai Petro aims to lift Russian oil intake in 2023/24

By Nidhi Verma

NEW DELHI (Reuters) - Indian refiner Chennai Petroleum Corp Ltd aims to almost double the processing of Russian oil in the current fiscal year that began in April, drawn to the discounts offered, its head of finance Rohit Kumar Agrawala said on Friday.

Russia emerged as the biggest oil supplier to India last fiscal year as refiners gorged on the discounted crude shunned by the West due to Moscow's military action in Ukraine.

In 2023/24 the company aims to meet 20%-25% of its oil needs via Russian supplies, Agrawala said at an analyst conference, adding the company buys Russian oil through spot deals.

Chennai Petroleum, a subsidiary of Indian Oil Corp (IOC), operates the 210,000 barrels per day (bpd) Manali refinery in Southern Tamil Nadu state.

Last fiscal year, it processed about 1.4 million tonnes or 28,000 bpd of Russian oil, equivalent to about 13% of its overall crude refining, Agrawala said.

The company refined 500,000 tonnes or about 41,000 bpd of Russian oil, about 22% of its overall crude refining, in the March quarter.

Agrawala said Chennai Petroleum would continue to buy Russian oil, even if priced above the $60 a barrel cap imposed by the West, provided there were no legal or compliance hurdles.

Last fiscal year, the company bought Russian oil at a discount which at times was $3-$4 per barrel and sometimes $7-$8 per barrel to dated Brent, he said.

"From a business angle when it is cheaper than other crudes and it is suiting my basket and on a net basis I am getting a margin I think I will continue to buy assuming there are no compliance hurdles or there are no statutory non-compliances that I am doing," Agrawala said.

Chennai Petroleum, through a joint venture with IOC and other investors, is building a 180,000 bpd refinery in the Cauvery Basin at Nagapattinam in Tamil Nadu.

Agrawala said the venture would consider inducting a strategic partner when sizeable construction risks are over for to project to get a fair value.

(Reporting by Nidhi Verma; Editing by Mark Potter)