Closer US-India energy ties to focus on Delhi’s reserves and technology

India and the US have agreed to develop closer ties in the oil and gas sector, according to the Indian

government.

India’s oil minister, Dharmendra Pradhan, met the US secretary of energy, Ernest Moniz, in

Washington on Monday to discuss bilateral cooperation.

The countries have agreed to improve ties in areas that include the assessment of onshore and

offshore hydrocarbon reserves in India, as well as new technologies in the development of biofuel

and the development of petroleum storage, India’s petroleum and natural gas ministry said.

Over the past decade, "several areas of interest for cooperation such as technology for production

from marginal fields, shale structures, developing gas pipeline networks [and] improving refinery

efficiency" have been identified, it said.

Indian companies have invested in shale oil and gas projects in the US, including the government-

owned Gas Authority of India Limited, which has a 20 per cent stake in the Eagle Ford basin, while

the Indian Oil Corporation and Oil India Limited have 10 per cent equity in the Niobrara basin.

The US Energy Information Administration (EIA) issued a report this week on India’s development of

its first strategic petroleum reserve.

"The significant drop in international oil prices since mid-2014 provides India with an incentive to

speed up construction and filling of its strategic petroleum reserve," the EIA said.

The petroleum reserve, which is in its first phase, is located in Visakhapatnam, Mangalore and Padur,

in the south of the country, and will have a capacity of 39 million barrels of crude oil. India is heavily

dependent on oil imports and its reliance on crude from abroad is growing as its energy demands

increase.

During the visit in February by Sheikh Mohammed bin Zayed, the Crown Prince of Abu Dhabi and

Deputy Supreme Commander of the Armed Forces, to India, Mr Prabhan said Abu Dhabi’s Adnoc had

agreed to store crude oil in the reserve.

"Other companies such as the Kuwait Petroleum Corporation, Saudi Aramco and Shell have also

expressed interest in India’s storage facilities," the EIA said. "In February, India proposed a federal

income tax exemption for the sale of stored crude oil by foreign firms to the local market as an

incentive for foreign oil companies to lease space."

The high global oil inventories that have reduced available storage would be another factor

prompting crude oil producers to seek new capacity, it said.

NGS INDIA