Oil and Gas Corporation Limited and Indian Oil Corporation Limited signed Crude Oil Sales Agreement (COSA) for North East on 1st October at New Delhi. The COSA is with effect from 1 April, 2018 and for a term of 5 years with provision for extension of tenure by 3 years. Subhash Kumar (Director) and Sanjay Kumar Moitra (Director) shared their valuable inputs on the key areas that need to be addressed by ONGC and IOCL going forward, to cement the ties further. They congratulated the team of officers involved in the finalisation and execution of the COSA. S M Vaidya (Director, IOCL) praised the teams for their efforts to conclude the NE COSA in a reasonable time.
ONGC supplies crude oil from Borholla, Geleky, Lakwa-Lakhmani, Rudrasagar and other fields of Assam and Jorhat Assets, along with condensate from Tripura in the North East to IOCL’s Refineries – namely Guwahati Refinery and Bongaigaon Refinery – as mandated by the Ministry of Petroleum and Natural Gas. From 2002-2004, ONGC had entered into a MoU with IOCL for sale of crude oil across India. Later on, Government intervention on pricing and transportation charges of NE crude dictated the terms and conditions of the supply.
ONGC entered COSA with all the PSU refiners’ w.e.f 2010. However, these COSAs excluded the crude oil produced in North East due to prevailing pricing and other orders of the MoPNG. After several unsuccessful efforts to formalize the COSA in the past, fresh attempts were resumed after the CPSE Conclave in April 2018, wherein the Directors of ONGC, IOCL, OIL and NRL agreed to formalize the COSA for North East Crude Oil. With the guidance and impetus provided from senior Management of ONGC, the NE COSA could be successfully executed within the reasonable time, considering the complexities of NE COSA pricing, involvement of M/s OIL as crude oil pipeline transporter and balancing the needs of the Buyer-IOCL. It may be noted that about 30% of the ONGC’s crude oil supply in North East is allocated annually by MoPNG to IOCL and the remaining 70% is allocated to M/s Numaligarh Refinery (NRL), which is a subsidiary of BPCL. ONGC supplies such crude oil through its own pipelines and through 1,400 kms long trunk pipeline of M/s OIL from Central Tank Farm (CTF) at Moran and Jorhat.
