But Govt to cut dependence on Gulf
Despite deepening crisis in Iraq, owing to its confrontation with ISIS, there has not been any significant impact on import of crude from that nation to India. In fact, during the April-June quarter of the current fiscal, out of the total import of crude oil into the country, shipments from Iraq constituted 12.8 per cent of the share. However, at the same time, in order to reduce its over-dependence on the Gulf region for crude supply, the Government is diversifying and plans to look at latin American nations as fresh options.
According to information available with The Pioneer, out of the 47.86 mmt of total crude oil imported during the first quarter of the current fiscal, shipments from Iraq were 6.15 mmt (and 12.8 per cent of the total imports during the period), which industry sources said were normal and showed no downward trend owing to the prevailing political crisis in Baghdad.
In the month of June 2014 (when the crisis erupted in Baghdad), India imported 15.95 mmt of crude oil, out of which shipments from Iraq were 2.02 mmt or 12.6 per cent. Iraq is the second largest exporter of crude oil within the Organisation of Petroleum Exporting Countries (OPEC). Also after Saudi Arabia, Iraq is the second largest supplier of crude to India.
Though as of now there does not seem to be any problem from crude oil supplies from Iraq, official sources said that the Government does not want to take any chances for future, and in order to reduce over-dependence on Gulf nations, latin American nations like Brazil, Columbia and Venezuela are also be looked at for future supplies.
Sources added that considering the fact that political instability is likely to grow in the Gulf and West Asia region in the near future, it would be prudent to start sourcing crude oil from other oil rich regions like latin America. In this context, latin America, from where India has already been sourcing crude oil supplies, could soon replace the Gulf nations and become the largest supplier to New Delhi.
Currently India’s dependence on Gulf nations for sourcing crude oil is 61 per cent. In 2013-14, India bought 115.86 million tonnes of crude from Middle East nations out of the total 189.24 million tonnes crude oil imported during the period. latin America was the second largest supplier of crude to India during FY14, supplying 31.73 million tonnes of it, while Africa supplied 30.39 million tonnes.
In fact, Petroleum Minister Dharmendra Pradhan had recently informed Parliament that the Government is attempting to raise domestic oil and gas production so as to reduce dependence on imports to meet its oil needs. Under this, production of State-owned Oil and Natural Gas Corp (ONGC) and Oil India ltd (OIl) are being monitored on monthly basis, the minister had said.
“While there is no existing barter arrangement involving import of crude oil, Government continues to explore possibilities for such an arrangement as it would lead to export promotion and result in saving of foreign exchange,” Pradhan had said in Parliament.