Some very important developments in this oil and gas sector this week. From a place that’s becoming a big mover in global petroleum markets: India.
India’s government officials announced a raft of energy reforms late last week. Including a key reduction of import taxes on liquefied natural gas (LNG) – to 2.5% from a former 5%.
That move is aimed at increasing LNG use across India – meaning this nation could become a critical driver for global demand and pricing.
And it’s not just natural gas where India is making big changes. With government officials also unveiling some key shifts in crude oil markets.
For one, the government announced the creation of two new strategic petroleum reserves. Which will see a total of 73 million barrels of oil stored in the states of Odisha and Rajasthan.
That’s nearly double the stored oil inventory that India has created to date. With the government having recently bought 38.8 million barrels to fill three storage facilities around the country.
Much of that crude came from suppliers like Iran – making India one of the biggest crude buyers from this emerging exporter. And the creation of the new, bigger strategic reserves are going to mean even more demand. Potentially signalling a surge in imports here.
At the same time, India’s government said it is moving to reform state-owned oil companies. By merging refiners and upstream producing firms, to create fully-integrated energy conglomerates.
Officials didn’t give exact details on which firms will be involved in the shuffle. But the movement appears to be unfolding quickly – with the government saying it wants to unveil the new entities by March 2018.
That should mean some big players appearing on the global petroleum stage very soon. Watch for details on which companies will be combined – these new firms could quickly become important players in global petroleum buying, and project M&A.
Here’s to the national interest,