01:30 GMT27 February 2021
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    Generous tax breaks are encouraging global oil majors to take a close look at India's huge storage vaults.

    New Delhi (Sputnik) — Word’s major oil companies are closely examining India’s ambition to create a vast strategic petroleum reserve facility.

    “ADNOC of the UAE, Saudi Aramco of Saudi Arabia and Shell have expressed their interest in storing crude oil in India’s strategic petroleum reserve facilities,” said Dharmendra Pradhan, India’s Minister for Petroleum and Natural Gas.

    Global oil major view the Indian facilities-in-the-making as opportunity to parking their oil reserves.

    India began constructing and accumulating oil in underground rock caverns at three locations. Two facilities – at Vishakhapatnam and Mangalore — have already been commissioned. The Indian government claims that these facilities would able to supply 73 days of country’s crude requirement in case of interruption in supply of imported oil.

    India imports 80 percent of its total oil requirement. Companies have been attracted by exemption from taxes on income to a foreign company from storage and sale of crude oil from strategic reserves.

    Over half the strategic reserves will be filled with Iranian oil. The Indian government is in talks with some gulf nations for the rest.

    Sources told Sputnik that India plans to create more strategic petroleum reserve facilities in the country’s eastern and western parts.


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