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AM ISTIndia plans to diversify oil importsOil minister Dharmendra Pradhan says India wants to buy from the US when the North American nation starts allowing exports
Oil and gas minister Dharmendra Pradhan. Photo: Sneha Srivastava/Mint
New Delhi: India, which spent $143 billion to import crude oil last year, plans to diversify its purchases to guard against geopolitical risks in some of the world&s biggest suppliers, the nation&s oil minister said.
Asia&s second biggest energy user wants to buy from the US when the North American nation starts allowing exports,
said in an interview. India will also look to increase imports from South America and Russia, he said.
The South Asian nation is seeking to secure crude supplies after it was forced to cut purchases from Iran, which faced western economic sanctions, and as fighting in Iraq, Syria and Africa threatens output. Indian Prime Minister
has made energy security a priority for the nation, which imports 80% of its oil.
&Procurement has to be diversified, taking into account the changing geopolitics in the world,& Pradhan said in his New Delhi office. &I met a representative from the US government recently and I have already asked for oil from them when they start allowing it. We will look to go to Russia and Latin America if that suits our needs.&
India got 61% of its 189.24 million tonnes (mt), or 3.7 million barrels a day, of crude imports in the year ended 31 March from the Middle East, including Iran and Iraq, oil ministry data show. About 16% came from Africa and 17% from South America. Import from Russia was 0.1%.
China, the world&s biggest oil consumer after the US, is also diversifying its suppliers. Growth in Latin American imports to China outpaced the expansion of purchases from the Middle East in the first eight months of the year, according to data from the country&s customs bureau. China bought 8.7% more Middle Eastern crude this year than in 2013, compared with a 20% increase in oil from South America.
Iran was the second biggest supplier to India until three years ago, when it was displaced by Iraq. US-led sanctions forced India&s refiners to cut purchases from Iran to 11 mt in the year ended 31 March, from a peak of 21.8 mt in 2008-09, according to data from the oil ministry. Imports from Iraq were 24.6 mt.
The US currently doesn&t allow export of crude oil. The government in June allowed overseas sale of condensate, which is some times produced along with crude, opening the door to more oil exports, including that produced from shale rocks.
Shale oil has boosted US crude production to 8.9 million barrels a day, the highest level since 1985, according to data from the Energy Information Administration. Natural gas output is 2.3 trillion cu. ft a day, the highest on record.
India wants some of that oil and gas for its $1.9 trillion economy. The five-month old government under Modi has introduced a series of policy changes in the energy sector in the past week. The cabinet freed local diesel prices from state control and increased the price of natural gas produced in the country by about 33% as it seeks to attract investments.
&The government will continue with the reforms process,& Pradhan said. &India needs oil technology and investments in a big way.& Bloomberg
First Published: Sat, Oct 25
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India Urges State-Owned Oil Companies to Expand Overseas
Anjana Pasricha | New Delhi
Photo: AP Indian Prime Minister Manmohan Singh, center (file photo: Oct 2010)
India is urging its oil companies to expand overseas to meet the soaring demands of its growing economy. India 's massive dependence on imported oil has prompted the country to look for energy assets overseas.
Prime Minister Manmohan Singh told a petroleum conference Monday in New Delhi that over the coming decade, India 's demand for fossil fuels is set to increase massively. He said domestic production, though rising, will not keep pace with this demand."In India, the demand over the next 10 years will increase by about 40 percent, whereas the increase in supply from the maturing oil fields is expected to be about 12 percent," said Sing.Mr. Singh told delegates that India 's state-owned oil companies will search for energy assets overseas. "Indian government is therefore encouraging all national oil companies to pursue equity oil and gas opportunities overseas. For these reasons we seek to build strong economic partnerships with other producing countries, and their oil and gas industries, to the mutual benefit of all us." The push to acquire overseas oil assets already has acquired momentum in a country that imports about 70 percent of its energy needs. This year, India 's oil minister, Murli Deora, traveled to several countries, including Nigeria, Uganda, Sudan, Angola and Venezuela, to lend diplomatic support to the search for oil and gas fields by state-owned companies.India 's Oil and Natural Gas Corporation is planning to borrow $10 billion over the next decade to buy overseas assets, according to media reports. The government also has increased to $1 billion the amount that state-owned companies can spend on acquisitions without government approval.The hunt for sources of oil overseas has acquired a new urgency as India races to catch up with China, which has spent billions of dollars in acquiring oil assets in several countries. India 's oil companies have often lost out to China in the past while bidding for overseas assets. Energy experts say this is partly because China 's bids are backed by offers of aid, investment and loans to countries with oil assets.As India, too, gives political backing to its bid to secure oil assets, Prime Minister Singh said hydrocarbons will continue to be India 's major source of energy for quite some time in the future.
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