Hindustan Petroleum Seeks Venezuelan Crude for Heavy Oil
Hindustan Petroleum Corp Ltd, a government-owned entity, is currently in the process of exploring the possibility of acquiring Venezuelan crude oil for the very first time. This decision comes as the company aims to bolster its heavy oil processing operations in the upcoming fiscal year, which commences in April.
According to Chairman Vikas Kaushal, this strategic move is a part of the corporation's broader plan to enhance its overall refining capabilities.
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“We are trying to build more flexibility in our system as we have two new facilities, so we can raise heavy crude processing,” Kaushal adds, referring to its residue upgradation facility at Vizag and the Barmer refinery.
“We are looking for Venezuelan oil, something we have not processed in the past.” The firm hopes to start crude processing at its 180,000 barrels-per-day (bpd) Barmer refinery in Rajasthan by the end of the month, making it India’s second-largest state-run refiner, behind Indian Oil Corp, replacing Bharat Petroleum Corp.
Indian oil refineries are currently evaluating the possibility of importing Venezuelan crude oil, which is being made available for purchase by Vitol and Trafigura as part of a sale directed by the US government following the apprehension of Venezuelan President Nicolas Maduro by Washington earlier this month.
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Kaushal stated that HPCL has recently acquired Brazilian Tupi crude and augmented its utilization of West African oil in its refining operations.
“We are not touching sanctioned Russian crude,” he says.
HPCL runs a Mumbai refinery with a capacity of 190,000 barrels per day in the state of Maharashtra in western India, as well as a Vizag refinery with a capacity of 300,000 barrels per day in the state of Andhra Pradesh in southern India.
Additionally, it maintains a 48.99 percent ownership in HPCL-Mittal Energy Ltd, the entity responsible for managing the 226,000 barrels per day Bathinda refinery located in the northern region of Punjab state. HPCL Mittal has disclosed plans to increase the capacity of the Bathinda refinery by an additional 10,000 barrels per day.
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In the third quarter of the present fiscal year, the government-operated oil marketing firm experienced a deficit of Rs 503 crores. In January, the deficits amounted to Rs 95 per cylinder, with the company projecting an increase to Rs 120 per cylinder in the future.
The company anticipates a capital expenditure of approximately Rs 13,000-14,000 crore for the current fiscal year 2025-26, which is slightly below the initially budgeted amount of Rs 15,000 crore. In the next fiscal year 2026-27, the company foresees a similar level of capital expenditure.