I wrote last week about how India is trying to attract outside investment to its hydrocarbon sector.
Reports suggest this may be a two-way street.
India’s Ministry of Petroleum and Natural Gas announced last week that it is pursuing outward investment in a new part of the world: Canada. Indian oil and gas firms will reportedly look to “increase their investments and presence in the Canadian Hydrocarbon (sic) sector”.
As part of the investment push, India’s oil consumers will also look to bring in more Canadian crude. With a term contract for deliveries to Indian Oil Corporation apparently well-advanced already.
This is probably overdue. India has been a notably absent player in the Canadian oil and gas sector. A space where Chinese, Japanese and Korean firms have all been increasingly active.
It’s likely worth India’s while. Prizes like the oil sands and the burgeoning liquefied natural gas export business from the Canadian west coast are some of the biggest energy developments going globally.
But it appears that India wants something beyond supplies of Canadian oil or natgas. Namely, access to advanced technology in the services sector. Ministry officials in India said that the deal with Canada should make state-of-the-art fracking technology available to Indian E&Ps.
There’s indeed been a lot of talk about shale gas development in India. Last week’s announced doubling of the domestic natgas price being a big step in aiding such development.
We’ll see if any actual shale drilling comes to fruition. There are many obstacles to economic production. Not the least of which being India’s notoriously corrupt and bureaucratic politics. Which are unlikely to offer the kind of smooth operating environment needed to make “factory” production like shale economic.
But if the pursuit of better drilling technology does lead to greater Indian investment in Canada, it will be beneficial for the sector. There are lots of good project here that could use a deep-pocketed funding partner. Perhaps that space will grow a little more competitive over the coming months.
Here’s to bilateral thinking,
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