State owned Oil and Natural Gas Corporation will enter crude and petroleum product trading and build a strategic petroleum reserve as part of a drive to strengthen supply security and extract greater value across its energy portfolio, the chairman and chief executive officer said. The new trading unit is expected to begin operations by the end of this year and will initially handle the group’s own crude and product requirements while pursuing third party business. The company is considering locating the desk in Dubai or Singapore and expects the venture to generate roughly USD one bn a year through improved crude sourcing, freight management and risk mitigation, the chairman added. He indicated that about 95 per cent of the preparatory work has been completed and that a partner and the final location remain under consideration. Officials at state refiners Hindustan Petroleum Corp Ltd and Mangalore Refinery and Petrochemicals Ltd, alongside an international trading partner currently being selected, are expected to take stakes in the trading venture. The unit is also to coordinate with ONGC Videsh Ltd, the group’s overseas investment arm, and ONGC Petro Additions Ltd to ensure integrated sourcing and commercial management. The move will give the group a single commercial interface in global oil markets and replace a fragmented model in which individual businesses source, sell and procure crude and feedstock separately. While ONGC will continue to prioritise upstream exploration as its central focus, the new arrangements are intended to improve competitiveness and capture value across the corporate group. Company executives said the integrated approach is expected to improve crude economics, reduce logistics costs and provide better risk hedging across refining and petrochemical feedstock purchases, while allowing the group to respond more swiftly to market dislocations and optimise cargo scheduling and shipping arrangements. Executives added that the desk will support coordinated procurement and commercial decision making across the group.