Dacca, 16 May 1972
The Government of the People's Republic of BANGLADESH,
HAVING requested the Government of INDIA,
TO ASSIST in the supply of Crude Oil for feeding its refinery at Chittagong, and the Government of India having agreed to concede
to this request,
BOTH GOVERNMENTS AGREE as hereunder:
The Government of India will procure from abroad and supply 5 lakh tonnes of Crude Oil to the Government of the People's Republic
of Bangladesh at the risk and cost of the Government of the People's Republic of Bangladesh.
(i) The procurement and supply of Crude Oil will be made by the Indian Oil Corporation Limited as the nominee of the Government of
India, to Eastern Refineries Limited as the nominee of the Government of the People's Republic of Bangladesh.
(ii) The Crude Oil will be delivered at Chittagong at the rate of approximately 1 lakh tonnes per month, commencing from April 1972
and the supply will be completed within a period of about 5 months.
(iii) In consultation with the Government of the People's Republic of Bangladesh and Eastern Refineries Limited, the Government of
India have advised the Indian Oil Corporation Limited to supply 4 lakhs tonnes of light Iranian Crude Oil and 1 lakh ton of Murban
Crude Oil aggregating to 5 lakh tonnes in all, as agreed. In pursurance thereof the Indian Oil Corporation Limited have concluded
arrangement with the Crude Oil suppliers. Any variation in the proportion of the type of crude oil required will be intimated by
Eastern Refineries Limited to Indian Oil Corporation Limited, and the latter will try to accommodate such requests to the extent
feasible in consultation with the crude suppliers.
(iv) The Indian Oil Corporation Limited and the Eastern Refineries Limited, will, in consultation with each other, determine the detailed
specifications and the schedule of delivery of the Crude Oil and conclude a contract in that regard. The terms of such contract
shall be in accordance with the principles mutually agreed upon between the two Governments in this Agreement.
(i) Subject to clause (ii) below, the Government of the People's Republic of Bangladesh agree to pay to the Government of India in
free foreign exchange an amount equivalent to Indian rupees Eighty one million (Rs. 81 million) to cover the total cost (which term
will include cost, freight, insurance, lighterage, etc., and other charges incurred by the Indian Oil Corporation Limited) in respect
of the supply of Crude Oil as above, in ten equal semi-annual payments, on 1st January and 1st July of each year, commencing from
1st January 1973, together with interest thereon @ 6-1/4% per annum to be completed as detailed below, on the outstanding amounts.
(ii) The amount referred to above is subject to variation consequent on the actual charges incurred by the Indian Oil Corporation
Limited, and is also subject to variations that may be occasioned by modifications that may be requested by Eastern Refineries Limited
in pursuance of the contract between the Indian Oil Corporation Limited and the Eastern Refineries Limited.
(iii) The Government of the People's Republic of Bangladesh will suitably instruct the Bank of Bangladesh in regard to the payments
to be made in free foreign exchange to the Government of India in terms of the Agreement reached above, within a period of one month
from the signing of this Agreement and will forward a copy of such instructions to the Government of India for its information and
(iv) The Government of India agree that the Government of the People's Republic of Bangladesh will retain the option to pay the total
cost and interest thereon earlier than the expiry of the period stipulated in this Agreement.
The two Governments agree that any differences arising in regard to this Agreement will be settled through the good offices of their
respective High Commissioner in Delhi and Dacca.
DONE at Dacca on the Sixteenth day of May One thousand nine hundred seventy two in two originals in English language, both texts
being equally authentic.
For the Government of India
For the Government of the
People's Republic of Bangladesh
High Commissioner for India
Secretary, Planning Commission