Tag: India

India seems to hold the upper-hand over Iran in a dispute over payments for crude oil shipments that has been rumbling for over six months.

Iran supplies India with 12-14 per cent of its total imports, making it India’s second biggest provider after Saudi Arabia. But a payments dispute has left India owing debts estimated at anywhere between $2-6 billion. In effect, this means India has been importing Iranian oil on credit since December 2010.

Pakistan is to become a key buyer of Iranian natural gas at a time when relations with Washington are at their most strained in recent years.

Work on extending the Iran-Pakistan gas pipeline will begin in the next six months and is set to be complete by 2014, according to Asim Hussain, the Pakistani natural resources minister. Some 1,100 km of the 2,700 km pipeline has already been completed on the Iranian side of the border, stretching from the South Pars field to the frontier with Pakistan.

Energy use in non-OECD Asia, led by China and India, is growing faster than anywhere else in the world – it will more than double between 1990 and 2035,  according to a report by the US Energy Information Administration published in April.

But how will India deal with escalating demand? A separate report by Bernstein Research, a US asset management company, suggests it will struggle to do so, as price-capping measures stifle private investment in natural gas.

India’s imports of natural gas are set to grow by 139 per cent in the next five years from 1.4m cubic metres per hour in 2010 to 3.4m cubic metres per hour by 2015, according to J P Morgan. The bank says Indian production will grow by 90 per cent over the same period, leaving the country with a natural gas shortage.

The giant Dalrymple coal loading terminal lies idle near Mackay on January 7, 2011 as bulk carriers (top) wait to be loaded with coking coal.India’s hunger for coal is just as insatiable as China’s, and in the race with the Middle Kingdom for foreign acquisitions, it would appear that India is outpacing China.

One acquisitive Indian company to watch is India’s Adani Enterprises, the country’s largest coal importer, which made a $2bn acquisition of Australia’s Abbot Point coal terminal this week. The deal, Adani’s second in Australia, underlines its ambitions to play a role in country’s coal sector. 

Adani enterprises became one of the first developers of private ports in India when the government first allowed the entry of private businesses in the late eighties. The firm, the largest coal importer in India, earned $5.8bn in revenues last year.

Kiran Stacey

Manmohan SinghIn the immediate aftermath of the Japanese quake and beginning of the nuclear crisis, we wrote that the responses of the China and India, which are both planning major investment into new nuclear plants, was much more pro-nuclear than that of Western governments.

But now both have changed position. China performed a near U-turn on Wednesday when it abruptly announced a freeze on approvals for planned plants. Two days later, India has similarly changed tack, although in a less dramatic manner, by calling a for a review of the country’s nuclear safety rules.

In one of the biggest foreign direct investments to date in India, BP is to pay $7.2bn to Reliance Industries in a deal that will give it a 30 per cent stake in 23 oil and gas blocks.

The blocks together cover approximately 270,000 sq km, the companies said in a statement on Monday, making the partnership “India’s largest private sector holder of exploration acreage”. BP and Reliance will also form a 50:50 joint venture for the sourcing and marketing of gas.

Cairn Energy may have the fortitude to search for oil in the Arctic but it has more than met its match in the hotter climes of India. Sub-zero temperatures and pack ice can be no more hostile than an indecisive, glacial regulator.

Seven months on from an offer by Vedanta to buy Cairn Energy’s Rajasthan oilfields for $9.6bn, the Indian government has yet to approve the deal. The last two days of crisis meeting in New Delhi may have helped move the portfolio forward. Bland statements, rather than the hoopla of breakthrough, suggest by an inch or two at most.

While China declares itself as a world leader in wind energy, India is also trying to make its claim in the global renewable energy sector, and it is one step closer with the announcement that it plans to build Asia’s first commercial tidal power plant.

The state government of Gujarat has signed preliminary agreement with Britain’s Atlantis Resources corporation to build a 250 MW tidal power plant in the Gulf of Kutch along the country’s western coast.

And then there were five. With the arrival of Dmitry Medvedev in New Delhi on Tuesday, India has completed an impressive diplomatic quintet. Russia’s president is the fifth and final leader from the five members of the UN Security Council to visit India in the past six months, following a path that has led to multi-billion business deals and burnished India’s sense of its rising global importance.

India and Russia signed 11 agreements on Tuesday, the first day of Medvedev’s two-day visit – including a deal through which ONGC, India’s state-owned energy company, will cooperate with Russia’s AFK Sistema in hydrocarbon development.

India’s Nuclear Power Corporation is a sleepy public utility that runs 17 atomic plants not very efficiently. Last year, it made headlines for the wrong reasons, when an act of apparent sabotage at one plant put the whole country on high alert. Prime minister Manmohan Singh also frequently laments that Asia’s third largest economy only produces just 3 per cent of its electricity from nuclear power.

Areva, France’s state-owned nuclear power company, wants to change all that. Amid a $9bn deal with NPCIL, it has big ambitions for the Indian giant, possibly bigger than the company has for itself. It’s offering NPCIL investment opportunities in its global mining operations, which span more than half a dozen countries from Niger to Kazakhstan.

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