BPCL bars Glencore from tenders: Sources

BPCL has banned Glencore, one of the world's biggest oil traders, from tenders over a financing dispute, sources said, and other state refiners which own over half India's capacity could also suspend it.

Bharat Petroleum Corp (BPCL) has barred the Swiss trader following a dispute over a change in shipping dates of a very large crude carrier of Nigerian cargoes, the sources, who have direct knowledge of the matter, said. Spokesmen at BPCL and Glencore declined comment. Rescheduling of dates forced the Indian refiner to charter two Suezmax vessels and incur additional cost, which Glencore is not willing to reimburse, the sources said, on condition of anonymity. Sources at other state-run refiners said BPCL had informed them about the move and asked them to take "appropriate action". "Glencore has to resolve this issue at the earliest as we all may consider suspending it from participation in our tenders," said one source at one of the state refiners. Another source with direct knowledge of the matter said: "More than money it is a disciplinary action ... BPCL has put Glencore on 'holiday' until the time issue is resolved." Glencore competitors Vitol and Trafigura, which have significant Indian operations and have invested heavily to build their businesses there, are likely to be watching developments closely. Glencore has won tenders to supply 5 million barrels of West African crude to BPCL so far in the current financial year, according to Reuters records. That quantity would be worth about USD 450 million given current oil prices. Traders said this could crimp the trading giant's business in India. "BPCL is a government-controlled company. If the situation gets worse it could spread to other public sector companies, and that could mean Glencore is excluded from a big chunk of work in India," said one Swiss-based trade source. India's state-run refiners own about 60% of the country's roughly 3.76 million bpd capacity. BPCL operates a 240,000 barrels per day (bpd) refinery in Mumbai as well as a 150,000 bpd refinery in the southern Indian state of Kerala, run by subsidiary Kochi Refineries. It also owns a majority stake in a 60,000 bpd refinery in north east India.