Page 14 - AsianOil Week 03 2023

AsianOil POLICY AsianOil

India weighs up price cap on Russian oil

INDIA INDIA reportedly may consider restricting pur- sanctions by the EU on Russian crude as the
chases of Russian oil in the event that the price price cap of $60 per barrel has had little impact
Until now there had rises above the Western cap of $60 per barrel, on exports to India, ministry and industry offi-
been no indication that marking the first time that New Delhi has sig- cials said,” the Telegraph reported. “However,
New Delhi would abide nalled it could adhere to such measures. Along the government is weighing up options if the
by the price cap. with China, India has drastically increased price crosses $60 per barrel – purchase will then
imports of Russian oil over the past year, taking be restricted – or if the EU decides on imposing
advantage of the widened discount that Russian blanket secondary sanctions on countries pur-
crude trades at versus the pre-war level, as a chasing Russian oil.”
result of Western sanctions and self-sanctions. Indian oil imports from Russia were up 24%
Until now, there has been no suggestion that in December versus the previous month, with
India would consider adhering to the price cap, private refiners accounting for much of the
introduced by the EU, the G7 and Australia in growth.
December. The cap prevents companies in those Meanwhile, Russian authorities have restored
countries that introduced it from providing the 20% stake of Indian oil company ONGC
insurance and shipping services to seaborne Videsh Ltd (OVL) in the Sakhalin-1 oil project in
Russian oil cargoes if they are sold at a price the Russian Far East. Russian President Vladimir
above the $60 threshold. Putin in October last year issued a decree dis-
Currently, the cap has no bearing on the price banding the project’s operating company, led by
that India pays for Russian oil. At present, the US major ExxonMobil, putting OVL’s stake in
country buys Russian oil for $53-56 per barrel, jeopardy.
the Indian Telegraph newspaper reported on Japan’s SODECO, another international com-
January 10. Earlier this week Russia’s flagship pany involved in the project, has asked for its
Urals blend of oil was trading at half of global shareholding to be resecured. ExxonMobil has
prices, at only $38 per barrel. claimed the asset was expropriated and is con-
“India is keeping close tabs on possible extra sidering legal action.™

PROJECTS & COMPANIES

Inpex to accelerate LNG plans

JAPAN JAPANESE oil and gas firm Inpex plans to accel- explore the surrounding areas to find extra
erate the expansion of its LNG production and resources to underpin a further expansion in
Drastic cuts in Russian sales business, predicting that the market will Ichthys’ capacity around 2030, potentially.
pipeline gas supply to continue to be tight in the medium term, its CEO Inpex, part-owned by the Japanese govern-
Europe have driven up told Reuters on January 12. ment, aims to take a final investment decision
demand for LNG. “Global LNG market is expected to remain (FID) on the Abadi LNG project in Indonesia in
tight in the mid-term due to the structural the latter half of this decade and bring the pro-
change of the global natural gas market since the ject on stream in the early 2030s. The project has
Russian invasion of Ukraine,” CEO Takayuki been in limbo for years because of changes to
Ueda told the news agency. planning and more recently Shell’s intention to
The LNG market was on track for significant withdraw. Indonesia is looking for an investor to
growth before Moscow launched its invasion of replace Shell, which has a 35% interest.
Ukraine a year ago. While high prices are set to Indonesia’s regulator had said in September
result in subdued demand for natural gas glob- that Inpex would be filing a revised development
ally in the years ahead, subsequent drastic cuts to plan for Abadi LNG by the end of 2022 but it did
Russian pipeline supplies to Europe have driven not do so, according to Ueda.
up demand for LNG. “The partner issue and the carbon capture
“We’ll make more efforts to acquire assets that and storage (CCS) details are very important and
can respond to future demand growth of LNG, it’s difficult to move the project forward unless
including expanding Ichthys, " Ueda said, refer- those issues are addressed,” he said.
ring to Inpex’s liquefaction project in Australia. Inpex struck a 20-year deal in December with
Inpex plans to ramp up LNG production US player Venture Global to import 1mn tonnes per
and sales faster than it had targeted in its medi- year (tpy) from the latter’s Louisiana project. This
um-term strategy unveiled last February, before was Inpex’s first major offtake contract, and Ueda
the war in Ukraine began. Output at Ichthys expects similar deals to be clinched. Inpex wants to
is due to rise from 8.9mn tonnes currently boost its overall LNG output and trading volume to
to 9.3mn tonnes in 2024. And Inpex plans to 10mn tpy by 2030 from 7mn tpy now.™

P14 www. NEWSBASE .com Week 03 20•January•2023