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New Delhi, July 28: The shutdown at the Bombay High North platform will not affect the availability of petroleum products as downstream refining companies normally have a 45-day stock of crude in their storage tanks.

However, this will lead to a minor increase in crude imports in the short run to offset the loss of the high-quality sweet crude from the western offshore oilfield.

A senior Indian Oil official told The Telegraph as over 70 per cent of the country's crude requirement is met through imports, the closure of the BHN platform is not expected to have a major impact on the Indian oil sector as a whole.

The Bombay High crude is distributed to the refineries of Indian Oil, Bharat petroleum and Hindustan Petroleum, each of which get only a small percentage of it. As a result, the dislocation potential of the disruption is further cushioned. Bharat Petroleum, which gets a relatively larger share of Bombay High crude, will be more affected than the others as imports work out to be costlier.

The 15 wells that feed oil to the BHN processing platform shut down automatically when the fire broke out yesterday and helped save valuable crude from going up in flames.

It would have been all the more difficult to bring the fire under control had the platform not shut down. Such incidents are known to keep blazing for months on end and extinguishing them is a high-cost operation.

The insurance companies have to shell out $190 million for the damage to the platform but the construction of a new platform is expected to cost around $300 million. This would entail an extra cost for ONGC. Moreover, it would take almost a year or two to build such a platform.

ONGC has insured its western offshore assets for $6 billion this year and was given a $20-million rebate on its insurance premium due to its good safety record.

The insurance companies are bound to raise their premium rates for the oil major next year in the wake of this accident.

ONGC’s contingency plan for restoring 70 per cent of the 110,000 barrels of oil being produced at the BHN platform by linking the 15 wells to other platforms in the next four weeks will help to reduce losses.

ONGC chairman Subir Raha has said the company is thinking of ways to restore 100 per cent production in the next six months. This will necessarily entail an extra cost for laying more pipelines.

Even though imports are not going to rise due to the 45-day crude stocks with the refineries, speculators have already started exploiting the situation.