05-12-2018

Indian Oil Corp issues 5-year tanker tender to import Iraqi oil, document reveals

India’s top refiner, Indian Oil Corp (IOC), has issued a global tender to charter scrubber-fitted oil tankers for at least five years to import Iraqi oil, a tender document seen by Reuters showed.

The tender says Indian shippers will be given first right of refusal for the contract as the nation seeks to boost its shipping industry. It is seeking bids from vessels that are less than 10-years old.

A scrubber is a product that strips out sulphur emissions and, in doing so, can allow shippers to use dirtier fuel oil but still meet new global requirements for lower emissions.

IOC and the country’s second biggest state-owned refiner, Bharat Petroleum Corp (BPCL), last year also issued similar tenders seeking vessels for five years.

The two refiners, however, could not award the tenders as there were very few bids by shippers because at the time they were seeking clarity on the new fuel emissions requirements.

The International Maritime Organization (IMO) is introducing the rules on marine fuels from the beginning of 2020, limiting the sulphur content to 0.5 percent, down substantially from the current 3.5 percent, to curb shipping pollution.

IOC’s tender document is seeking global bids for a very large crude carrier (VLCC) capable of carrying Iraqi Basra Light and Basra Heavy crude for five years and grants Indian shippers the right of first refusal.

BPCL will soon issue a domestic tender seeking to hire Suezmax tankers capable of carrying up to 1 million barrels of oil for a five-year period, two industry sources said.

The IMO says that when the new rules come into force it will ban ships that do not have scrubbers from carrying any fuel oil, making it easier to catch cheaters.

The duration of the IOC contract can be extended by another two years to a total of seven, the tender document showed. The tender will close on January 7 and bids will remain valid until March 11, the document showed.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Source: Live Mint

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