Indian Oil Corp, the country’s top refiner, is in talks with European trader Vitol to set up a trading joint venture to expand its exposure in global oil markets, three IOC sources told Reuters.
Talks for a potential partnership began last year, two of the sources said.
IOC, along with its subsidiary Chennai Petroleum Corp , controls 80.8 million metric tons a year (1.62 million barrels per day) of refining capacity, accounting for about 31% of India’s total 5.2 million bpd.
The state-run company is expanding the capacity of its three refineries to raise crude processing by 346,000 bpd over the next two years and also plans to build a 180,000 bpd refinery in southern India.
Vitol is expected to provide IOC with market intelligence and help the company secure crude at better rates, the sources said.
However, one of the sources cautioned that the venture could give Vitol direct access to IOC’s crude import strategy.
“There is a risk of our classified information being shared with a trading house. That will put our other suppliers and traders at a disadvantage,” the source said.
A second source said any deal with Vitol would be structured on an arms-length basis, and details of the cooperation that would also include refined fuels exports were still being worked out.
IOC and Vitol did not respond to emails seeking comment.
(Reporting by Nidhi Verma; Additional reporting by Julia Payne in Brussels; Editing by Kirsten Donovan)
