New Delhi: With Prime Minister Narendra Modi set to meet US President Donald Trump, petroleum and natural gas minister Hardeep Singh Puri said energy will continue to be a very strong component of the India-US relationship and he is hopeful about the bilateral energy issue figuring in the prime minister’s deliberations.
Modi is scheduled to meet Trump on Thursday. The US is currently the fifth largest oil supplier to India. During the April-November period of the ongoing fiscal, India imported $4.11 billion worth of crude oil from the US, 1.8% lower than $4.19 billion a year earlier.
“As a layman, I’d be surprised if there isn’t a discussion on energy. You’re already buying $20 billion worth (of energy). My answer to your question is, energy will continue to be a very strong component of the India-US relationship,” Puri said in an interview on Wednesday.
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Citing the strong participation of the US in the ongoing India Energy Week and discussions in the US-India Business Council’s roundtable, Puri said that American CEOs acknowledge the opportunity India offers.
“This is the main theme from most of the CEOs. India is the premier global opportunity on energy. Many of them are energy companies. Some of them are in upstream, some into technology, some into financing. So, this is how the mood was in that huge roundtable,” Puri said.
On Russian oil supplies, which constitute about 38% of India’s oil imports, Puri said investments in Russia would result in a long-term gain.
This comes in the backdrop of ONGC Videsh Ltd and Oil India Ltd’s dividends stuck in three producing assets in Russia. Indian companies have so far invested $16 billion in Russian energy assets. ONGC Videsh and Oil India have stakes in Sakhalin-1, Vankor and Taas-Yuryakh Neftegazodobycha.
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Puri said the stuck dividends are not significant compared to the investments in the country, and investments in oil and gas space should be looked at from a long-term perspective. “When you go for oil and gas investments, go with a bigger heart… When you’re doing exploration and production, or you’re doing contracts? Don’t put limits on your time.”
Over the past three years, Russia has emerged as the top supplier of oil to India backed by deep discounts. Although the discounts have narrowed from about $30 per barrel in 2022 to about $2.5-4 per barrel now, Russian oil comprises of about 37.6% of India’s total oil imports. As of November, Russia supplied crude worth $35.76 billion, 18.26% higher from $30.24 billion in the same period last fiscal.
That comes amid successive production cut announcements by the OPEC+ grouping that includes Russia.
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India has been diversifying its energy sources in a bid to achieve energy security as it imports over 85% of its oil requirements. The country is particularly vulnerable as any increase in global prices can affect its import bill, stoking inflation and increasing the country’s trade deficit.
Indian companies have also been negotiating with their Russian counterparts for better discounts and deals. In May last year, Mint reported that all state-owned and private oil refiners would jointly negotiate for higher discounts and better terms with Russian suppliers.
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