Saturday, April 09, 2005

India Petroleum Update

Pipeline Politics - The Eastern Front

The tripartite deal between India, Burma and Bangladesh to get Burmese gas into India is running into some rough ground with India reluctant to acede to Bangladeshi demands for access to Nepal and Bhutan for trade, transit and power supply. Bangladesh claims that these concessions from India would ensure the necessary favorable public opinion in the country in favor of the pipeline. Er... what about the transit fees?

The Saudi Front

A proposal for Saudi Aramco and Indian Oil Corporation to build strategic crude reserves facilities in India has been dropped. The reason being given is the economic unviability of such a proposal considering the high prices of crude these days. However the commercial storage facility proposal is still on.

The Domestic Front - Oil, Politics and Business

Talking of high crude prices, domestic companies are demanding a steep hike (over 10%) in the selling price of petrol and diesel to keep their losses down. At last check, the government was still holding back.

While Oil India Limited had to give up on its Louisiana offshore block as the last well drilled turned out to be dry, back home the oil and finance ministries are haggling over the estimated proceeds from the OIL IPO. The oil ministry wants the money to further exploration efforts, while the finance ministry wants the money to help tide over the fiscal deficit (BTW this is what the previous NDA did with proceeds from earlier privatisation efforts).

IOC meanwhile topped the Singapore-based Applied Trading Systems survey again to emerge as the number one oil trading company in the Asia-Pacific region. IOC was also freed by the government from the monopoly of Shipping Corporation of India on chartering ships for oil imports.

Reliance meanwhile is facing a glut of LPG at its Jamnagar refinery. IOC has been refusing to pick lift the products without discounts. Reliance has thus asked the Petroleum Ministry for permission to export its way out of the glut.

Looking around

An article outlining Indian compulsions on engaging Central Asia - energy security and national security.

The Saudis meanwhile are talking about increasing production to keep the global economy afloat, as also investing in refineries in several countries (including India of course).