NEW DELHI (Reuters) - Global oil majors including Saudi Aramco and Total plan to tap the retail fuel market in India, its oil minister said on Friday, reflecting the expanding role of the world's fastest-growing large economy on the global crude landscape.
India's fuel markets could be a lucrative prize for the world's oil majors as they seek outlets for their gasoline and diesel. India posted the fastest oil demand growth in the world in the first quarter of 2016 and is replacing China as the driver of growth globally, the International Energy Agency said in its latest report.
"Saudi Aramco is eager to enter in Indian market, we are finding ways to help them," Oil Minister Dharmendra Pradhan said in Hindi in a live telecast on a government website.
India, the world's fourth-biggest oil consumer, recently offered Saudi Aramco a stake in refineries and petrochemical projects.
Saudi Aramco wants to expand globally and is looking at potential joint ventures in several countries, including Indonesia, India, the United States, Vietnam and China, chief executive Amin Nasser told Reuters in an interview in May.
Fuel marketing in India has turned profitable after the government ended decades-old control over the retail prices of gasoline and diesel.
Pradhan said local private oil refiners Reliance Industries and Essar Oil have started opening their mothballed fuel stations and are adding new ones to expand business.
French major Total and European major Royal Dutch Shell that have a limited presence in India are also keen to strengthen their presence in the fuel retailing business, Pradhan said.
"Shell officials recently met me and informed about their plan to expand the retail network in a big way in southern India," he said.
He said his ministry has agreed to grant a licence to BP to market jet fuel in India. "There is a possibility they (BP) may expand into the Indian retail sector," he said in Hindi.
Essar Oil is still working to complete a deal to a sell a 49 percent stake in its 400,000 barrel per day Vadinar refinery in western Gujarat state to Russian giant Rosneft.
"Rosneft, rich with oil and gas wants to join Indian markets," Pradhan said.
By Nidhi Verma
(Reporting by Nidhi Verma; Editing by Christian Schmollinger)
Something interesting to share?
Join NrgEdge and create your own NrgBuzz today
Headline crude prices for the week beginning 12 November 2018 – Brent: US$71/b; WTI: US$60/b
Headlines of the week
It seems to have been a topic that has been discussed for years, but a decision could finally be made. The Philippines has short-listed three different groups who are in the running to build the country’s first LNG import terminal, whittling them down from an initial 18 that submitted project proposals. The final three consist of the Philippines National Oil Company (PNOC), a joint venture between Tokyo Gas and domestic firm First Gen Corp and China’s CNOOC. The Philippines hopes to choose the final group by the end of November – an optimistic decision that belies that many, many complications that have come before.
First of all, the make-up of only one of the groups has been finalised. A local partner is a requirement for this project; CNOOC has yet to officially tie-up, although it has been talking to Manila-based Phoenix Petroleum, while state oil firm PNOC does not have a (deep-pocketed) partner yet. Firms including Chevron, Dubai’s Lloyds Energy Group and Japan’s JERA have reportedly contacted PNOC to express their interest, but a month before the Philippines wants to make a decision, its own home-grown hero hasn’t yet got its ducks lined up in a row.
And time is of essence. The once giant Malampaya gas field is running out of resources. Supplying piped natural gas to three power plants that feeds some 45% of Luzon’s electricity requirements, the Shell-operated field is expected to be completely depleted by 2024. With the country aiming to move away from burning coal or (imported) gasoil for power, gas is needed to replace gas. Even though the Philippines is pushing for a bilateral agreement with China to pave to way for joint exploration activities in disputed areas of the South China Sea – to the consternation of its citizens – any discovery in the Palawan basin or Scarborough Shoal will be years from commercialisation.
So LNG is the answer. And LNG has been the answer since 2008, when the need for an LNG import terminal was first identified. And it is not like no projects have been proposed – Australia’s Energy World Corp (EWC) has been wanting to build an LNG receiving terminal and power station in the Quezon province near Manila for years, but the project has been described as ‘trapped in a bureaucratic quagmire’ due to hurdles from various government agencies, or stymied by groups with competing interests.
PNOC itself has been wanting to build its own terminal in Batangas, within range of existing gas and power transmission facilities currently drawing Malampaya gas. But, just like Pertamina in Indonesia, it is cash-strapped and unable to drive the project on its own, hence the requirement for a partner/s. First Gen Corp and Phoenix Petroleum are both private players, with First Gen already operating four of the country’s five gas-fired plants while Phoenix Petroleum has close ties with CNOOC Gas.
Many announcements have been made and gone, but with this shortlist of three groups, it does finally look like the Philippines will be able to get its LNG ambitions of the ground. And it is thinking even bigger; wanting the terminal to become a LNG trading hub for the region – capitalising on the existing habit of ship-to-ship transfers of LNG cargoes into smaller parcels in the Philippine waters for delivery into southern China – challenging existing ambitions in Japan, South Korea and Singapore. But perhaps that is getting a bit ahead of themselves. Getting a project – any LNG project – off the ground is the first priority. And the rest can come after that.
Other Proposed LNG Projects In The Philippines: