Search This Blog

Indian Oil Corp (IOC) has barred Vitol from participating in its tenders  

IOC said to bar world’s largest oil trader Vitol

Singapore: Indian Oil Corp (IOC) has barred Switzerland-based Vitol, the world’s largest oil trading firm, from participating in its tenders and other government-run refiners may follow suit, three sources with direct knowledge of the matter said. IOC, the country’s biggest refiner, put Vitol Geneva and Vitol Asia Singapore on a list of companies barred from doing business with it from Sept 3 as the trader withdrew and modified a binding offer made in a crude import tender, the sources said. Officials at IOC declined to comment. Vitol, responding to an email, said it never comments on commercial relationships.

IOC has informed other government-run refiners about the move and has asked them to explore the possibility of initiating similar action, the sources said. IOC was at one point the country’s sole crude importer and used to buy oil on behalf of other companies. Government-run firms still work closely on matters such as international trade and retail fuel prices. The ban may allow Vitol’s competitors Glencore and Trafigura, which have significant Indian operations and have invested heavily to build their businesses there, to expand. “Certainly this now opens the door for the likes of Glencore and Trafigura to take over from Vitol’s position in the tenders,” a Singapore-based trader said.

Other government-refiners would consult the oil ministry on suspending Vitol from participating in their tenders, the same sources said. “IOC is like the godfather here, no one messes with it,” a trader said. “On the products side, Vitol is a market leader, it picks up a lot of cargoes from India, so if its bids are not there, others would definitely get an advantage.” The impact of this ban for Vitol would be particularly serious for West African grades, traders said. India imports about 80% of its crude requirement. In the financial year ending March 31, it imported about 3.3 million barrels of oil. “It’s going to be a huge impact on Vitol because they would lose a big outlet for West African crudes,” a Singapore trader said. “India might see higher prices on their tenders.” Earlier the second-biggest, Bharat Petroleum Corp, had barred Glencore from participating in its tenders in January, but within three months lifted the ban following a settlement.

Reuters:::Posted: Friday, Sep 09, 2011 at 0235 hrs IST

AddThis Social Bookmark Button


Post a Comment