Page 6 - AsianOil Week 10 2022

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India is offered big discounts for Russian oil

as Australia bans Russian energy imports

POLICY SANCTIONS imposed by Western countries Meanwhile, Australia has been included in
against Russia for its invasion of Ukraine have a list of “unfriendly states” drawn up by Russia,
prompted many oil companies and traders to which it considers have committed “hostile acts”
think twice before taking on cargoes of Russia against Moscow. Furthermore, Russian Deputy
crude oil. An international embargo on Russian Prime Minister Alexander Novak has warned
oil and gas has not yet been adopted but indi- that a ban on Russian oil and gas – which is cur-
vidual countries have started announcing bans rently being considered by Western allies – could
on Russian energy imports. Unlike numerous lead to “catastrophic consequences.”
other countries, India has not condemned Mos- Novak’s warning came as Australia’s two major
cow for its actions, leading Russian oil suppliers refiners, Viva Energy and Ampol, condemned
to offer major discounts to India for purchases Russia’s actions in Ukraine and announced in
of their crude, according to reports emanating recent days that they would no longer be buying
from India. Russian crude. Spokespeople for each company
The crisis has caused already rising oil prices to said that their crude imports were sourced from
soar further. As a long-time ally of Moscow, New a number of suppliers and that their operations
Delhi has been offered discounts of 27% off cur- were not dependent on Russian oil.
rent market prices, which reached $139 per barrel This was followed by Australia saying that
during a recent day of trading. Prices in that range it would ban Russian energy imports – oil, gas,
could have a serious effect on India’s economy. petroleum products and coal – on March 11.
Market observers have urged India to care- However, the ban will only come into effect after
fully consider any deals for Russian crude, as it cargoes that have already been paid for arrive in
could possibly fall foul of Western determination the country.
to isolate Moscow from international business in Australia joins the US and UK in banning
response to the Ukraine war. imports of Russian energy.™
SOUTH ASIA

OVL suffers exploration disappointment

with Kanchan-1 well in Bangladesh

PROJECTS & INDIA’S ONGC Videsh Ltd (OVL) has report- well for several weeks. This came after drilling
COMPANIES edly failed to find commercially viable gas at the well was initially delayed as a result of the
reserves in a well drilled in the SS-04 shal- coronavirus (COVID-19) pandemic, and OVL is
low-water block offshore Bangladesh. also reported to have been in payment disputes
The exploration disappointment comes as with drilling subcontractors as a result of the
energy security concerns are increasingly in the delays.
spotlight and represents a blow to Bangladesh’s OVL itself has not commented on its result
hopes of unlocking new domestic production at Kanchan. The firm has plans to drill two more
potential. wells – Titly in Block SS-04 and Moitree in Block
OVL drilled the Kanchan-1 wildcat well in SS-09 – within its contract period up to Febru-
Block SS-04 to a depth of 4,200 metres, targeting ary 2023. According to the Financial Express,
two prospective formations. However, an official the company has not yet abandoned the remain-
from state-owned Petrobangla told Bangladesh’s der of its drilling plans, nor has it informed
Financial Express on March 7 that OVL had not Petrobangla about how it intends to proceed.
found any indications of a gas reservoir. Kanchan was the first offshore well to be drilled
“The company could find only huge depos- in Bangladesh’s waters in five years. The country
its of clay and shell-stone sequence during the relies on imported LNG to meet its energy needs,
drilling in absence of sandstone, meaning there but this is becoming increasingly more costly,
is no gas-reserve prospect there,” the Petrobangla making domestic energy a more appealing pros-
official said. pect. Dhaka is reportedly seeking to evaluate and
The result comes after OVL had to overcome revise its production-sharing contract (PSC)
several challenges during the drilling operation, terms in an effort to make its offshore blocks more
including logging tools becoming stuck in the attractive to international investors.™

P6 www. NEWSBASE .com Week 10 11•March•2022