MOSCOW (MRC) -- India's ONGC Videsh Ltd has sold at least one cargo of Russian Sokol oil to India refiners Hindustan Petroleum Corp and Bharat Petroleum Corp after failing to draw interest in a tender earlier this month, reported Reuters with reference to sources familiar with the matter.
Indian companies are snapping up Russian oil as it is available at a deep discounts after some companies and countries shunned purchases from Moscow due to sanctions against Russia for its Ukraine invasion.
India, the world's third-biggest oil consumer and importer, has not banned Russian oil imports.
ONGC Videsh, the overseas investment arm of Oil and Natural Gas Corp, has a stake in Russia's Sakhalin-1 project and sells its share of the oil from the project through tenders.
In the tender earlier in March, ONGC Videsh did not get any bids for the Sokol crude oil cargo for May loading.
The sources said HPCL and BPCL had been able to offer a discounted price for the cargo. This marks the first purchase of Sokol crude by HPCL. BPCL had previously purchased the grade in 2016.
The two refiners will pay ONGC in rupees, the sources added.
One of the sources said ONGC Videsh will look at selling more cargos to Indian refiners if there is no interest from overseas buyers.
ONGC Videsh, HPCL and BPCL did not respond to Reuters emails seeking comment.
Western sanctions against Russia for its invasion of Ukraine have hit Russian oil sales, making it possible for Indian and Chinese refiners to buy Russian Urals crude at a deep discount.
As MRC wrote before, crude oil processing by Indian refiners rose about 10% year-on-year in February, provisional government data showed, as demand in the world's third biggest oil importer and consumer grew. Throughput in February rose 9.8% to 5.35 MMbpd (20.44 MMt), the data showed. But processing fell 5.8% from January, with a drop at Indian Oil Corp's Bongaigaon Refinery in Assam due to a power failure.
We remind that last year the Indian company Nayara Energy, 49.13% of which is owned by Russia's largest state oil company - Rosneft, launched a USD750 million petrochemical development program. Nayara Energy has the second largest refinery in India with a capacity of 20 million tons per year. The Indian company has already launched a refinery development program: within the first stage, it is planned to build units for the production of polypropylene (PP) with a capacity of up to 450,000 tonnes per year.
According to MRC's ScanPlast report, in 2021, PP shipments to the Russian market totalled 1,494.280 tonnes, up by 21% year on year. Deliveries of homopolymer PP and PP block copolymers increased, whreas.shipments of PP random copolymers decreased significantly.
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