Essar Group of India has signed a one year contract to buy 12 million barrels of its Castilla crude oil worth 1.2 billion dollars from Ecopetrol of Colombia in July 2012.
The first shipment of 2 million barrels of oil in a Very Large Crude Carrier left on July 29 from
Covenas port and it would take 35 days to arrive in India at the Vadinar port.
Essar aims to buy 15-20 percent of its crude oil needs from the domestic market, 35-40 percent from Latin American sources, and 30-40 percent from the Middle East. Essar has been importing also from Venezuela, Mexico and Brazil.
Reliance has also signed a term contract with Venezuela to import over 300,000 bpd, in addition to its purchases from Brazil, Colombia, Mexico and Ecuador.
The import of these two companies from Latin America forms more than ten percent of India's global imports of crude oil. Given the discovery of new oil fields and the increasing production of crude oil in the region, India can count on Latin America as a reliable long term source for 10-15 percent of its import needs.