Bangladesh will purchase 11 million barrels of crude oil from Saudi Arabia and the United Arab Emirates in 2006 under state-to-state deals, energy officials said on Monday.
"The cabinet has approved a proposal of the Bangladesh Petroleum Corporation (BPC) to buy the cargo from the two countries," a senior official told reporters after a meeting of the council of ministers.
State-run BPC, the country's sole importer and distributor of petroleum products and crude will import 5.5 million barrels Marban crude from Emirates and the rest 5.5 million barrels Arabian Light crude from Saudi Arabia in phases during the year.
Besides refining crude in the country's lone 11 million barrels annual capacity, the Eastern Refinery Limited (ERL) in south-eastern port city of Chittagong, Bangladesh also imports some 18 million barrels of petroleum products from Kuwait, Emirates and Saudi Arabia.
"We prefer to buy crude under state-to-state deals for getting concessions, which are generally extended to friendly countries, by Middle Eastern oil giants" Mahmudur Rahman, energy adviser to the government, said without giving details.
The import costs for the 11 million barrel cargo may stand at around $668 million, an official of BPC said.
Bangladesh, under a similar state deal, imported 15 million barrels of gas oil from Kuwait Petroleum Corporation (KPC) in 2005.
It also bought 3.0 million barrels of petroleum products from other countries, including India, via tender.
In 2004-05 Bangladesh imported nearly 29 million barrels of petroleum products and crude from Kuwait, Abu Dhabi and Saudi Arabia, compared with 28 million barrels the previous year (2003-04). The imports included 11 million barrels of crude each year.
Bangladesh's import costs for petroleum products and crude rose more than 20 percent to $1.53 billion in the fiscal year to June 2005 from $1.27 billion a year earlier, energy officials said.
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