Friday, March 18, 2005

India Petroleum Update

Most of the action this week was around the proposed Iran-Pak-India gas pipeline.

First Iran refuses to sign the 'supply-or-pay' clause in the gas deal with India. This effectively means Iran refuses responsibility to supply the gas at India's doorstep - and thus the responsibility of reigning in Pak.

Then Condoleezza Rice visits Delhi and does the expected - asks India to keep away from Iran for a while.

The next day, Aiyar gets tough with Iran on the pricing front, even saying they can go to the other customers they harp about. To be fair to Aiyar, he did verbally refuse to bow to any US pressure on the issue. Still, you cant stop the conspiracy theorists right?

On the foreign oil and gas equity front, Reliance Industries bagged exploration rights to one of the largest deep water blocks in Oman. At some 20,000 sq kms it is huge, and has the right structure to possibly hold huge gas reserves.

In an article in the Asia Times, Chietigj Bajpaee explains some of the geopolitical contraints that India faces in its quest for oil energy security. A nice round-up.

N. Mahalaxmi has a nice article on Rediff, pointing out why India Inc is so bullish about the future, despite rising and rising oil prices - gas. A cheaper and cleaner source of fuel, even without any of the new pipelines fructifying, Reliance (from the KG Basin), Petronet LNG, and other companies are scheduled to ensure that supply of gas in the domestic market will go up from 114 mscmpd (Million standard cubic metres per day) in 2004-2005 to 195 mscmpd in 2008-2009. RIL, ONGC, GAIL, Indraprastha Gas and Petronet LNG will be champions of ensuring future gas security in India. I am pleased to note that I am well invested in at least three of them.