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The Covid-19 pandemic led to erosion of 1/3rd of global energy demand, creating significant oil price volatility with cascading geopolitical impacts. This has also resulted in India’s crude oil and natural sourcing ability to improve, according to Minister for Petroleum and Natural Gas, Dharmendra Pradhan.
Speaking at the International Energy Security Conference 2020 organised by Global Counter-Terrorism Council (GCTC), Pradhan said: “We have enhanced our engagement with key global players and firmed up our strategic partnerships with producing countries such as United States of America, Russia, Saudi Arabia and United Arab Emirates on one hand. There is also more engagement with consuming countries like South Korea and Japan.”
“We presently have sufficient supplies of crude oil and Liquified Natural Gas (LNG). This is a result of our efforts to diversify sources of hydrocarbons,” he added.
Also read India’s oil and gas import dependence to more than double by 2050: bp Energy Outlook 2020
Pradhan said that India’s oil-marketing companies are now importing crude oil from more than 30 countries spread across Africa, North and South America, as well as South East Asia.
“New long-term contracts have been entered into by our counterparts in USA, Russia and Angola. LNG imports have also diversified from traditional suppliers like Qatar to USA, Australia and Russia,” he said.
“With a significant demand crash globally, the hydrocarbons supplies are relatively less of a concern,” Pradhan added.
Oil Pricing
On pricing of crude oil, Pradhan advocated a responsible and affordable pricing mechanism. He said: “At the G20 Emergency meeting of Energy Ministers as well as other international fora, including OPEC and International Energy Forum (IEF), India has been articulating this position, and there is much greater resonance to our approach to this matter.”
Commenting on the demand recovery in India, he said: “We are witnessing significant demand restoration of petroleum products to pre-Covid-19 levels from July onwards. Oil and gas Public Sector Undertakings (PSUs) alone will have investments of ₹1.2-lakh crore in the current fiscal spread across multiple projects.”
An official statement said that PSUs are investing in 8363 projects or economic activities during the current financial year.
“India’s energy sector has shown greater resilience in the face of the Covid-19 pandemic with supplies holding up admirably, despite the global turmoil in financial and commodity markets,” Pradhan said.
Commenting on strategic storage of crude oil, Pradhan said: “Taking advantage of low crude oil price in April and May 2020, to fill the strategic petroleum reserves. We improving domestic crude oil and product storage capacity from 74 days to 90 days.”
Pradhan invited participation of companies in the development of 6.5 million tonnes of crude storage capacities at Chandikol and Padur in the next commercial-cum-strategic reserve programme. “We are also exploring overseas crude storage facilities in the US and other commercially-viable locations,” he added.
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