NEW DELHI—India and China have decided to jointly protect their interests as consumer nations and draw up a strategy for sourcing crude oil from the international market. Japan and South Korea also have agreed to boost cooperation in the energy sector, India’s Oil Minister Dharmendra Pradhan said.
While speaking to the media at the concluding conference of the 16th International Energy Forum (IEF16) on April 12, Pradhan said cooperation among oil-consuming nations is warranted in view of oil-producing countries charging Asian premium from India, China and others for supplying petroleum.
IEF16 is the largest gathering of energy ministers from across the globe, industry leaders and heads of key international organizations, who debated the future of global energy.
Indian Oil Minister Dharmendra Pradhan and China National Petroleum Corporation (CNPC) Chairman Wang Yilin held a bilateral meeting on the sidelines of IEF16, which was hosted by India and co-hosted by China and South Korea.
Pradhan said that CNPC is concerned with the issue of Asian Premium. “We are looking at further cooperation on crude procurement, scouting for oilfields, bringing in the best enhanced oil recovery activities and technology sharing,” Pradhan said during the media scrum.
CNPC chairman Wang Yilin and Indian Oil Chairman Sanjiv Singh will be the point persons for taking the collaborative effort between the two countries forward, Pradhan said.
“In principle, both CNPC and Indian companies have agreed to work out a common solution, sit together and debate how to influence the suppliers,” Sanjiv Singh said.
Li Fanrong, deputy administrator, National Energy Administration, China, said the two nations can work together in the energy sector as consumer as well as energy producers.
It is important to note that when two large oil consumer nations like India and China speak the same language on oil price, it puts pressure on global producers. Currently, India is world’s third-largest energy consumer after US and China. India imports more than 80% of crude oil to meet its domestic requirements.
Reports suggest that China was the top oil importing country in the world last year.
Other prominent luminaries who attended the ministerial meet were Khalid Al-Falih, minister of petroleum and mineral resources, Saudi Arabia; Suhail Mohamed Al Mazrouei, minister of energy and industry, UAE; and Bijan Namdar Zangeneh, minister of petroleum, Iran.
On April 11, Saudi Aramco signed a memorandum of understanding to pick up 50% stake in a planned US$ 44 West Coast refinery and petrochemical project called Ratnagiri Refinery and Petrochemicals project in Indian state of Maharashtra.
The refinery, slated to be India’s largest facility, is being planned by state controlled refiners Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL). The upcoming refinery will have a capacity to process 1.2 MMbbl of crude oil per day and is expected to produce around 18 mtpa of petrochemical products..
“We see India as a priority for investments and for our crude supplies,” Khalid Al-Falih said at the 16th International Energy Forum.
Khalid Al-Falih further said that Saudi Aramco will supply at least 50% of the crude to be processed at the planned refinery. He hinted that his company may also bring a partner for its share in the refinery at a later stage.
The refinery project (Ratnagiri Refinery) is currently facing some protest from the locals regarding land. However, the project is expected to be ready by 2025. The pre-feasibility study of the refinery has already been completed and the project’s final configurations are at near final stage.
All told, the meeting was attended by petroleum ministers from 42 countries, Pradhan informed that more than 1,300 delegates participated in IEF13. As many as 53 representatives from different countries attended the forum and 38 ministers marked their presence.
Ministers and officials from Nigeria, Japan, Russia, China, USA, International Energy Agency (IEA), OPEC, CNPC, Total, and Exxon Mobil also participated in the conference.
Ahead of IEF16 in New Delhi, Pradhan met with OPEC secretary general Mohammad Sanusi Barkindo as well as energy ministers from other countries.
The meeting comes at a time when oil prices have climbed to about US$70 a barrel from under US$30 two years ago following an agreement between key producers, including OPEC members and Russia, to cut production to support prices.
IEF16 was formally inaugurated by Indian Prime Minister Narendra Modi. This is second time India is hosting the IEF ministerial meeting. It had earlier hosted 5th IEF in 1996 at Goa.
The next IEF will be held in China.