Dec. 5 (Bloomberg) -- India is seeking additional volumes of oil and natural gas from Persian Gulf suppliers, while sanctions against Iran pose “practical difficulties” to supply, said the country’s oil minister S. Jaipal Reddy.
“Ours is a growing economy,” Reddy told reporters today at the World Petroleum Congress in Doha, Qatar. “Wherever there is an opportunity we ask for more supply,” he said, referring to crude, liquefied natural gas and liquefied petroleum gas.
India is boosting energy imports as the country builds refineries and petrochemical plants to meet domestic and international fuel demand. The country’s oil refining capacity may rise to 232 million metric tons in 2012 from 193 million tons this year, according to the minister.
The nation is in talks with Qatar about buying increased volumes of LNG, he said. “We are requesting LNG,” he said. “We need more as a cushion.”
Kuwait is in discussions with India to supply about 200,000 barrels a day of additional crude oil under long-term contracts, Farouk Al-Zanki, chief executive officer of Kuwait Petroleum Corp. said in Doha today. The state-run oil company currently provides India about 400,000 barrels a day under long-term agreements, he said. Kuwait is producing 3 million barrels a day, Al-Zanki said.
Saudi Arabia will increase shipments to some Indian refiners next year as they add plants and seek alternative supplies after a payment dispute with Iran, four people with direct knowledge of the plans said on Nov. 15.
No Problem For Now
“In respect of supply of oil from Iran I see no problem as such,” Reddy said. “We have been able to tackle our payment problem through one bank. Problems will really arise when international sanctions are formally lodged against oil, but for now I don’t really see a problem.”
Indian refiners are using Istanbul-based Turkiye Halk Bankasi AS to process payments to Iran, two people with knowledge of the matter said on Aug. 5.
Financial sanctions against Iran that limit banking transactions with the Islamic Republic posed “practical problems” rather than legal ones to Indian buyers, Reddy said.
India may also buy more LPG, a refined product use in domestic stoves, from the United Arab Emirates, that country’s oil minister Mohamed al-Hamli said in Doha today.
“India is one of those countries that are having consistently higher growth year after year,” al-Hamli said. “They need energy and we are happy to supply them with LPG, oil, refined products.”
The government has no plan to raise regulated domestic prices of refined oil products, Reddy said.
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