Page 6 - AsianOil Week 32

AsianOil ASIA-PACIFIC AsianOil

India bars Chinese ships

from importing oil and gas

PIPELINES & INDIA and China’s relationship appears to have New Delhi announced in late July new restric-
TRANSPORT deteriorated further, following reports that New tions that bar companies from countries that
Delhi has banned China-flagged and owned ves- border India from bidding for government con-
sels from carrying hydrocarbons to and from the tracts. Indian imports from China amounted to
South Asian country. more than $70bn in 2019.
Indian national oil companies (NOCs) have Years of improving bilateral relations between
not only banned Chinese ships from participat- the two neighbours fell apart on June 15, when
ing in transportation tenders but also intend to Chinese and Indian troops clashed in a border
request that third-party oil traders and suppliers skirmish that left 20 Indian and at least one Chi-
avoid using Chinese vessels in their deliveries to nese soldier dead. While no guns were used, the
India, Bloomberg reported on August 13. conflict was the worse clash since the two coun-
While the move is the latest escalation in tries’ 1962 border war. Both sides have blamed
tensions between the two countries, Indian the other, leading to a build-up of military per-
sources told the newswire that the ban was sonnel on both sides of the disputed boundary.
not expected to hit trade significantly. Two India has since begun targeting Chinese
unnamed oil executives were quoted as saying businesses present in the country, banning more
that the bulk of the foreign fleet India’s NOCs than 100 Chinese-affiliated apps, including Tik-
rely upon are flagged in Liberia, Panama and Tok and WeChat.
Mauritius. When Chinese vessels are used, State-run Chinese daily The Global Times
they are mostly involved in the transport of dismissed India’s increasingly anti-Sino posi-
liquid petroleum gas (LPG). tioning on August 13 as an effort by New Delhi to
The newswire’s sources said the ban is an “find a scapegoat for its domestic policy failures”,
extension of the Indian government’s ongoing pointing to the South Asian country’s struggles
efforts to curb trade with China and Pakistan. to address its coronavirus (COVID-19) crisis.™

SOUTH ASIA

ONGC faces funding struggle

FINANCE & INDIA’S state-owned Oil and Natural Gas financial year,” one senior executive said.
INVESTMENT Corp. (ONGC) may have to raise debt to fund its The executive added that meeting ONGC’s
planned capital expenditure budget for financial capex target of more than INR260bn ($3.48bn)
year 2020-2021, according to a recent PTI report. would be a challenge, given the fact that coro-
While the company will reduce its debt by navirus (COVID-19) has depressed the interna-
more than a third in 2019-2020 to INR139.49bn tional oil market and that the Indian government
($1.87bn), unnamed company sources told the has continued to set gas prices below the cost of
newswire on August 10 that between the col- recovery for many domestic fields.
lapse in international oil prices and government While ONGC will optimise costs and focus
pricing controls on domestic gas production, the on operational efficiencies, another source said
state major would struggle to fund its operations. the major had INR78bn ($1.05bn) worth of
“While we ended the 2019-20 fiscal year credit and short-term facilities that it could tap to
with a comfortable financial position, we face meet its working capital requirements and cover
an uphill challenge during the current 2020-21 any shortfalls. Moreover, ONGC has an overall

P6 www. NEWSBASE .com Week 32 13•August•2020