HPCL looks to import oil from Syria

State-owned Hindustan Petroleum Corporation (HPCL) is looking to buy crude oil from Syrian property of ONGC Videsh (OVL) after the European Union imposed an embargo on oil imports from the African nation.

"We are looking at bringing one cargo for testing," HPCL Chairman and Managing Director Subir Roy Choudhury said on the sidelines of the third India-Africa Conference here.

EU has barred any dealing with several Syrian oil firms including OVL's Amsterdam-registered subsidiary ONGC Nile Ganga BV (ONGBV), which holds stake in the Syria's AI Furat project. The sanctions bar any financial dealing with these firms and so OVL is looking at Indian refiners who have no dealing with the EU for selling crude oil.

"We need to find a ship [that does not trade with EU]. I guess that would not be a problem but the real problem would be finding insurance for the ship," Choudhury said.

If logistics work out, HPCL can take up to 2 million tonnnes of Syrian crude.

OVL's majority owned unit ONGC Nile Ganga BV (ONGBV) holds 16.66% to 18.75% stake in four production sharing contracts, comprising 36 producing onland fields, operated by Syria's Al Furat Petroleum Co, which had to scale down crude oil output due to the EU sanctions.

European Union (EU) countries imposed sanctions on Syria on September 3 after which European countries having contracts with Syria have stopped importing Syrian crude oil.

OVL, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), has stake in AI Furat project in Syria through its joint venture company Himalaya Energy Syria BV.

AI-Furat Petroleum Company (AFPC), the operating company for AI Furat Project in Syria, in which OVL has a stake -- had been producing 85,000 barrels per day. However, after the imposition of sanctions by the EU, all the operators in Syria had to cut down their production as evacuation of crude was getting difficult due to non-availability of shipping vessels as most of them are registered either in Europe or in the US.

AFPC had to cut down its production to the level of 70,500 bopd from the middle of September, 2011. Currently, AFPC is producing 70,500 bopd.

ONGBV and Fulin Investments Sarl, a subsidiary of China National Petroleum Company International (CNPCI), holds 33.33% to 37.5% participating interest in four Production Sharing Contracts (PSCs) comprising 36 producing onland fields in Syria through a Dutch joint venture company, named Himalaya Energy (Syria) BV, wherein ONGBV and Fulin Investments Sarl, hold 50% shareholding each.

ONGBV share has been funded by OVL and Mittal Investment Sarl in the ratio of 77.95: 22.05.