India has been seeking investment from Saudi Arabia to build strategic crude oil reserves.It will act as a buffer against volatility in oil prices and supply disruptions.
Strategic crude oil reserves,which are state-funded and meant to tackle emergency situations,allow a country to counter short-term supply disruptions.
The construction and maintenance of strategic petroleum reserves (SPR) is given to the Indian Strategic Petroleum Reserves Ltd (ISPRL).Indian Strategic Petroleum Reserves Ltd (ISPRL) is a special purpose vehicle of the Oil Industry Development Board,which is a statutory body under the petroleum ministry.It was created for India’s energy security.
India has built 5.33 MT(million tonnes) of emergency storage enough to meet its oil needs for 9.5 days,in underground rock caverns in Mangalore and Padur in Karnataka, and Visakhapatnam in Andhra Pradesh.
In Phase-II,India plans to build an additional 6.5 million tonne facilities at Chandikhol in Odisha and Padur in Karnataka which is expected to augment the emergency cover against any supply disruption by another 11.5 days.
Saudi Arabia is the second largest supplier of crude and LPG to India.In 2017-18, India’s crude oil imports from Saudi Arabia were 36.8 MT, accounting for 16.7% of its total imports.