Instead of issuing tenders for the sale of its Nile Blend crude, the oil will be treated by ONGC’s refining subsidiary, Mangalore Refinery Petrochemicals, according to the company.

It is the second time in recent months it has taken such a step. In December it also chose to refine the oil rather than sell it for export.

ONGC typically sells 600,000 barrels a month of Nile Blend, a heavy, sweet crude. China and Japan are the two largest buyers of Nile Blend crude.

ONGC Videsh, the overseas arm of ONGC, has a 25 per cent stake in Greater Nile Petroleum Operating Company which operates blocks 1, 2 and 4, which account for the country’s Nile Blend crude production.

Nile Blend output has only recently recovered from the impact of severe flooding on the three blocks in the summer.

Production reached more than 240,000 barrels a day (b/d) in late October, up from little more than 200,000 b/d in the aftermath of the August floods, described by Sudanese officials as the worst in living memory.