Minister of Petroleum and Natural Gas Dharmendra Pradhan recently held a meeting with Organisation of the Petroleum Exporting Countries (OPEC) Secretary General Sanusi Mohammad Barkindo in here and discussed the current scenario of oil and gas industry of the world and exchanged notes on the recent developments.
Barkindo is in India to attend the first CERAWEEK India Energy Forum. The two had last met in Vienna in May 2017 for the 2nd India-OPEC Institutional Dialogue.
India's engagement with the OPEC is important as India sources about 86 percent of crude oil, 75 percent of natural gas, 95 percent of LPG from the OPEC member countries.
During the meeting yesterday, Pradhan highlighted that in today's oversupplied market, it was important for producers to understand the perspective of consuming countries and the changes that have taken place in these demand centers. He emphasised the need for a purposeful and improved dialogue among producer and consumer countries.
Pradhan reiterated that the OPEC should work towards "responsible pricing," which is important for India for socio-economic and developmental reasons. He also emphasised on India's earlier view of 'Asian Dividend rather than charging Asian Premium' on the crude supplied to India and said that countries like India should actually be the "preferred destination." He later suggested that the OPEC, at its ministerial meetings, gives wider consideration to India's requests.
Pradhan further noted that India is putting a lot of emphasis on diversifying its crude oil supply sources and tapping new supply sources. He highlighted the arrival of two shipments of crude oil cargo of 1.6 million barrels from the U.S.
The three Indian public sector refineries have already placed a cumulative order 7.85 million barrel from the U.S. In addition, a private sector refiner has also placed an order of 2 million barrel from the U.S.
Minister of Petroleum and Natural Gas was accompanied by senior officials and also CEOs of seven public and private sector refineries who together operate all 23 refineries in India processing over 235 MMT of crude annually.
India is future of energy demand, Secretary General of Organisation of the Petroleum Exporting Countries (OPEC) Sanusi Mohammad Barkindo said.
Barkindo said that India is the growing end of the global economy and the future of energy demand.
"The OPEC and India engage in ongoing dialogue. The OPEC has established similar dialogue with the European Union, with Russia and other countries. But, one of most important dialogues is with India as OPEC member countries supply India over 80 percent of its oil requirements. Our member countries also participate in the downstream sector of Indian industry. India is also investing in some of our member countries. So, it is a strategic partnership between the two," Barkindo said.
Briefing media about his meeting with Barkindo, Pradhan said "I have reiterated in the meeting that India as an emerging and big market expects reasonable price. We know for the continuous production, there must be price stability. Price stability must also be in the interest of consumers. This is the consistent stand India is taking."
The OPEC Secretary General also briefed media about the Declaration of Cooperation.
On December 10, 2016, twenty-four leading global oil producers signed a 'Declaration of Cooperation' in Vienna that committed the countries to a sizeable adjustment in crude oil production in support of much-needed market stability.
The landmark move between the 13 OPEC Member Countries and 11 non-OPEC producers was the culmination of many months of intense discussion and negotiation, often involving the highest level of heads of state and government.
Replying a question about talks on the consensus on the output of the Declaration of Cooperation, Barkindo said, "Consultations are ongoing and OPEC Conference President Khalid Al Falih of Saudi Arabia work hand in hand with Alexander Novak of Russian Federation and are actively consulting with all the 24 participating countries in the Declaration of Cooperation in order to build consensus on the way forward."
Barkindo added that Russian President Vladmir Putin endorsed current Declaration of Cooperation in Moscow and look forward to its sustenance.
On October 4, Putin addressed participants of a plenary session at the Russian Energy Week in Moscow.
Speaking about the oil output cut deal between OPEC and non-OPEC states, Putin said Russia fully meets its obligations under the agreement.
Talking about the 173rd (Ordinary) OPEC Meeting on November 30 in Vienna, Barkindo said, "In the interest of not only producers but consumers like India we look forward to another historic moment when we meet on November 30 in Vienna to review the implementation of the Declaration of Cooperation and evaluate projections for 2018."
He said that OPEC expects that other oil producing countries will join Declaration of Cooperation.
"There is a growing consensus. Number one, that there is rebalance in process is underway. We are gradually but steadily achieving our common and noble objectives. Number two, that to sustain this into next year, some extraordinary measures may have to be taken in order to restore the stability on a sustainable basis. And thirdly, we are also beginning to look beyond the rebalancing of the market in order to institutionalise strategic partnership among the producing countries. And finally, we are also looking forward to receiving additional producing countries to join the Declaration of Cooperation. All roads lead to Vienna on November 30."
When asked does OPEC also look at some output cap for Nigeria or Libya, Barkindo said, "We have been in active consultations with both Nigeria and Libya. They have been participating in our recent joint ministerial monitoring committee, comprising five countries from both OPEC and non-OPEC, as well as its technical sub-committee. We are glad to see that both of them are making progress towards full recovery and in solidarity with these two countries we can't wait them to fully recover so that they can take their place within the Declaration of Cooperation."
OPEC members Libya and Nigeria were exempt from the cuts agreement, which took effect in January, because of their struggles to restore production amid internal strife. Their increased output in recent months has prompted speculation that OPEC may seek to limit their production to help stabilise oil markets.
Pradhan later extended an invitation to secretary general OPEC to attend the 16th Ministerial Meeting of International Energy Forum which on scheduled to take place in India on April 2018. While, secretary general accepted the invite.
