Government Asks OPEC Not To Cut Oil Production; Seeks Better Commercial Terms

Government Asks OPEC Not To Cut Oil Production; Seeks Better Commercial Terms

Companies have started exploring alternate sources for crude oil.

 

NEW DELHI: Battling a slowing economy, government on Tuesday implored oil cartel OPEC to not undertake deeper crude oil production cuts as it renewed its pitch for reasonable pricing of oil and stability in supplies.

In a meeting with OPEC Secretary-General Mohammad Sanusi Barkindo, Oil Minister Dharmendra Pradhan also pitched for better commercial terms for crude oil imports including reduction in official selling price, extension of credit period from existing 30 days to 90 days from bill of lading, freight discount and open credit based on creditworthiness of Indian state-run refineries.

“We discussed the present oil availability scenario,” he told reporters here. “Organization of the Petroleum Exporting Countries (OPEC) is now taking cognizance of consumer interest in deciding on its policies.” The oil cartel, he said, will meet in December and hoped it would not announce new cuts in production. “We hope that in the current geopolitical situation, OPEC does not exercise greater production cuts. We sincerely believe that crude prices should be left to market forces of demand and supply. We have been consistently advocating maintaining an optimal balance between the producers and consumers for responsible pricing, which balances the interests of both the producer and consumer,” he said.

Mr Pradhan said the voice of India, the world’s third-largest energy consumer behind the US and China, is now being heard and OPEC Secretary-General has been taking its views to the meetings of the producers.

OPEC nations led by Iraq and Saudi Arabia supply more than 80 per cent of India’s oil needs and any cut in output is likely to push up prices – something that a slowing economy cannot afford. He said OPEC members such as Abu Dhabi have been very supportive of making up any production shortfall in the aftermath of attacks on Saudi oil facilities.

Companies have started exploring alternate sources for crude oil, to ensure that import basket is widely spread out, to counter any eventuality of a sudden supply shortage. The minister said he is encouraging Indian firms to look for investment opportunities in producing assets. “Our companies are engaged with OPEC member countries for further investment opportunities.”