India is planning to build two underground caverns that can hold a combined 6.5 million tonnes of crude. Reuters
India is planning to build two underground caverns that can hold a combined 6.5 million tonnes of crude. Reuters

Energy

India seeks $1.5bn investment to expand its oil caves

The state-run ISPRL will hold roadshows in New Delhi, Singapore and London this month to draw investors

Bloomberg

October 12, 2018

India is seeking $1.5 billion of investments from global oil producers and traders to build additional emergency crude reserves that will act as a buffer against volatility in oil prices.

The plan is to build underground caverns that can hold a combined 6.5 million tonnes of crude at two locations, said HPS Ahuja, chief executive of Indian Strategic Petroleum Reserves Limited (ISPRL).

The state-run ISPRL will collaborate with private entities, who will invest in the project, said Mr Ahuja.

Getting investors to build the storage facilities will lessen the strain on state finances and help prime minister Narendra Modi’s government meet its budget goals, while expanding strategic petroleum reserves to shield the economy from oil-price volatility.

India, which meets almost 85 per cent of its crude needs through imports, this month cut taxes on fuel sales to lower the burden of high oil prices on consumers.

“We are taking the commercial model for building and filling the caverns, which will provide opportunity to the investor to make some profits,” Mr Ahuja said.

“India will continue to reserve first right over the crude stored in these caverns.”

_______________

Read more:

_______________

The two new reserves include 4 million tonnes of storage at Chandikhol in the eastern state of Odisha and a 2.5 million-tonne facility at Padur in southern India’s Karnataka state.

India has built 5.33 million tonnes of underground reserves in three locations, including Padur, under an earlier phase that can meet 9.5 days of the country’s oil needs. The government purchased crude to fill the caverns in Visakhapatnam in Andhra Pradesh and half of another facility in Mangalore in Karnataka, while leasing out the other half to Abu Dhabi National Oil.

ISPRL, which was formed in 2006, is scouting investors to fill the caverns at Padur. It will hold roadshows in New Delhi, Singapore and London this month to draw investors for the new caverns.

“Strategic reserves are crucial for a growing consumer like India,” said Mr Ahuja.

How much of your income do you need to save?

The more you save, the sooner you can retire. Tuan Phan, a board member of SimplyFI.com, says if you save just 5 per cent of your salary, you can expect to work for another 66 years before you are able to retire without too large a drop in income.

In other words, you will not save enough to retire comfortably. If you save 15 per cent, you can forward to another 43 working years. Up that to 40 per cent of your income, and your remaining working life drops to just 22 years. (see table)

Obviously, this is only a rough guide. How much you save will depend on variables, not least your salary and how much you already have in your pension pot. But it shows what you need to do to achieve financial independence.