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 Prabhan, 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.
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