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India Reliance to buy extra Saudi oil

Mumbai, June 18, 2008

India's Reliance Industries will buy 30 percent of the additional crude oil pumped by Saudi Arabia in July after lifting the same proportion of extra supplies this month, a top company official said on Tuesday.

"Yes about 30 percent of incremental volume is coming to Reliance. The supply will be both for the existing and new refinery," P M S Prasad, president of Reliance's petroleum division, told Reuters.

Reliance runs a 660,000 barrels per day (bpd) refinery at Jamnagar and its subsidiary, Reliance Petroleum is expected to commission a 580,000 bpd plant at the same location this year, making it the world's biggest refining complex.

Reliance was buying 30 percent of the additional Saudi supply of 300,000 bpd in June and would buy the same percentage of "whatever extra oil" is offered by the kingdom in July, Prasad said.

Initially analysts and market sources said Saudi Arabia might struggle to find willing buyers for the extra oil.

United Nations chief Ban Ki-moon said over the weekend that Saudi Arabia was set to hike its oil output to 9.7 million bpd in July, indicating a total 550,000 bpd or 6 percent increase in supply since May.

Saudi Arabia, the world's top oil exporter, is also hosting a meeting of producers and consumers on June 22 to discuss the reasons for high prices and amid calls from consumers, such as Britain, for more oil.

Prasad said he expected the meeting would help stabilise the crude oil market.

"We expect there will be less volatility and more stability after the meeting," he said. - Reuters




Tags: India | Reliance | Saudi oil |

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