India, the world’s third-biggest oil importer, is exploring storing crude oil in the US and other commercially viable places to hedge its provide dangers, oil minister Dharmendra Pradhan stated on Tuesday.
Also, the nation has tied up long-term crude oil provides from the US, Russia and Angola to diversify its import basket past its conventional suppliers in the risky Middle-East.
Speaking at a convention on the ‘Energy Security Towards Atmanirbhar Bharat’, he stated India is now importing crude oil from over 30 nations, together with from Africa, North and South Americas in addition to Southeast Asia.
“We are also exploring overseas crude storage facilities in the US and other commercially viable locations,” he stated.
India and the US had on July 17 signed a preliminary settlement for cooperating on emergency crude oil reserves, together with the opportunity of India storing oil in the US emergency stockpile.
The nation presently shops 5.33 million tonnes (about 38 million barrels) of crude oil in underground storages at three places on the east and west coast, hardly sufficient to meet its 9.5 days wants.
The International Energy Agency (IEA) prescribes its members to have no less than 90 days of inventory in the strategic reserves.
India has been looking to broaden the storage capability by one other 6.5 million tonnes Chandikol in Odisha and Padur in Karnataka and can be exploring the opportunity of hiring storage in the US to inventory some oil that can be utilized in instances of utmost value volatility or provide disruption.
The nation is as a lot as 85 per cent depending on imports to meet its oil wants. It purchased 101.four million tonnes of crude oil from overseas throughout April 2019 to March 2020 – two-third of those coming from the Middle East nations corresponding to Iraq and Saudi Arabia.
“New long-term contracts have been entered into by our companies with their counterparts in the US, Russia and Angola,” he stated.
Also, the import of fuel (in its liquid kind or LNG) has been diversified from conventional provider Qatar to the US, Australia and Russia, he stated.
“With the significant demand contraction globally, the hydrocarbon supplies are relatively less of a concern,” he stated.
Pradhan stated filling present underground strategic storages utilizing low priced crude oil in April and May helped save over Rs 5,000 crore.
“To further improve energy security in the hydrocarbons sector, we are gradually improving crude and petroleum products storage capacity from existing 74 days of national consumption to 90 days,” he stated.
India, he stated, has enhanced its engagement with key international vitality gamers, and firmed up of strategic and complete vitality engagements with producing nations such Russia, the US, Saudi Arabia and UAE on one hand, and shut engagement with consuming nations corresponding to Japan and South Korea on the other.
Pradhan stated the nation had adequate provides of crude oil and liquefied pure fuel (LNG) on the peak of geopolitical tensions final yr.
On the pricing of crude oil, he stated India has been advocating a accountable and inexpensive pricing mechanism.
“Our five-pronged strategy to reduce crude oil import dependency including increasing domestic oil and gas production, promoting biofuels and renewables, energy conservation and energy efficiency, improvement in refinery processes and demand substitution, is making an impact,” he stated. “We still have more room to cover.” Pradhan stated the prevailing vitality frameworks are already witnessing unprecedented transformation due to the pandemic.
“What is the nature of the energy security infrastructure post-Covid-19 will squarely depend on how each country handles the current challenges in their national domain, and also in consort with the global energy community,” he stated.
Covid-19 led to the erosion of virtually a 3rd of worldwide vitality demand, triggered unprecedented oil value volatilities with important geopolitical implications, delayed or stalled investments and tasks in the vitality sector, and created uncertainties over the employment prospects of tens of millions of individuals related to the sector.
“In an energy interdependent world, India cannot be immune to these momentous changes globally,” he stated.
India, because the world’s third-largest client of vitality, has not solely been impacted however may doubtlessly outline the way in which international vitality traits would emerge.
While oil fuel sector was considerably affected in the preliminary levels of Covid-19, important restoration of consumption of a number of petroleum merchandise has been witnessed since July onwards.
“It is not surprising that India is estimated to account for 35 per cent of the increase in global primary energy consumption up to 2050. With over 16 per cent of the global population, India currently uses only 6 per cent of the world’s primary energy.
“With the per capita consumption of energy still one-third of the global average, India will have to continue to develop all possible energy sources to meet this energy deficit,” he stated.
Oil PSUs are spending Rs 1.2 lakh crore on 8,363 tasks throughout the present fiscal to increase financial exercise in the pandemic-hit financial system, he stated.