Strategic Petroleum Reserves

Why in news?

• Recently, the Ministry of Petroleum & Natural Gas provided valuable insights into the Strategic Petroleum Reserve Programme during a written reply in the Lok Sabha.

About Strategic Petroleum Reserves:

• SPR are crude oil inventories (or stockpiles), usually held by a country, to safeguard the economy and national security during an energy crisis.
• The concept was first mooted in 1973 in the US, after the 1973 oil crisis. Later crises, like the 1979 oil crisis and Iraqi invasion of Kuwait, gave further impetus to the idea.
• All major countries hold oil in emergency reserves. 

3 Biggest Global Strategic Petroleum Reserves:

• The United States
  • The United States is the world’s largest holder of the crude reserve.
  • The United States maintains a strategic petroleum reserve in a complex of caves located along the Gulf Coast. At its maximum inventory, the U.S. reserve held 726.6 million barrels of oil.
  • It was created in 1973 when the US faced oil crisis caused by Arab oil embargo.
• China
  • It has the 2nd largest reserves in the world.
  • Its endeavor to store crude oil started relatively late, in 2007.
  • A report says that Chinese reserves stand at 475 million barrels at the end of 2017.
• Japan
  • Japan has third largest petroleum reserves at 324 million barrels.
  • In 2007 Japan announced its plan to share the strategic reserves with other countries.

Strategic Petroleum Reserves in India:

• The Indian Strategic Petroleum Reserve (ISPR) refers to the emergency fuel storage maintained by Indian Strategic Petroleum Reserves Limited, a Special Purpose Vehicle - wholly owned subsidiary of Oil Industry Development Board under the Ministry of Petroleum & Natural Gas.
• Strategic crude oil storages are at Mangalore (Karnataka), Visakhapatnam (Andhra Pradesh) and Padur (Karnataka) as per Phase I. They have fuel storage of total 5. 33 MMT (Million Metric Tonnes).
• The government of India is planning to set up two more such caverns at Chandikhol (Odisha) and Udupi (Karnataka) as per phase II through Public-Private Partnership. This will give an additional 6.5 million tons of the oil reserves.
• Thus, a total of 22 days (10+12) of oil consumption will be made available by ISPR.
• Crude oil from underground rock caverns (considered safest for storage of Hydrocarbons) can be supplied to refineries through pipelines and ships.
• Indian refiners also maintain crude oil storage (industrial stock) of 65 days. Thus, a total of 87 days (22 by ISPL + 65 by Indian refiners) of oil consumption will be made available in India after completion of Phase II by ISPR. This will be very close to 90 days mandate by the IEA.

PRACTICE QUESTION:

Consider the following statements.

1. All the existing Strategic crude oil reserves in India are located along the East coast.

2. The headquarters of Indian Strategic Petroleum Reserve limited is located in Noida.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer