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The state-run Bharat Petroleum Corporation (BPCL) has secured a supply of 1 mn tonnes (mt) of liquefied natural gas (LNG) from a $ 20 bn project in Mozambique. The project, led by Total Energies, faced a setback in March 2021 when Total Energies declared force majeure due to security issues caused by Islamic State-linked insurgents in Mozambique's Cabo Delgado province. BPCL's subsidiary, Bharat PetroResources (BRPL), holds a 10% participating interest in the LNG project through its Netherlands-based step-down subsidiary, BPRL Ventures Mozambique. Alongside ONGC Videsh (OVL) and Oil India (OIL), BRPL holds a total of 30% stake in the project.
Despite the force majeure, major contracts, including LNG sales and project finance, are progressing. BPCL has invested approximately $900 mn in development and $729 mn in exploration. The security situation has significantly improved, and the company expects the force majeure to be lifted by July 2024. The consortium, including BPCL, has tied up 11 MT of gas from the project. The strategic location of Mozambique, close to India's west coast with numerous LNG terminals, adds to the project's significance.
India, currently importing around 20 mtpa of natural gas from various suppliers, anticipates the Mozambique project's gas flow to commence by FY28. The Indian government has shown keen interest, with visits from Foreign Minister S Jaishankar and Oil Minister HS Puri to Mozambique. Oil Secretary Pankaj Jain also met Total Energies CEO Patrick Pouyanne in May 2023 to discuss resuming operations.
The global energy market is facing uncertainties, with crude oil prices remaining below $90 per barrel in the last three months despite announcements of supply cuts by major suppliers. BPCL expects crude oil prices to be range-bound between $80-90 per barrel soon. While major world economies experience lacklustre growth, India remains a stable oasis of growth. However, geopolitical events like the Russia-Ukraine war, Middle East conflicts, and Red Sea tensions may negatively impact the global supply chain, contributing to crude oil price volatility throughout the year.
BPCL CMD G Krishnakumar emphasised the importance of responsibly using fossil fuels amid India's rapid economic expansion, acknowledging the surge in energy demand. He highlighted the challenge of balancing reliance on fossil fuels with the push for newer green energy sources. The article underscores the role of India in the evolving energy landscape and the complexities involved in managing fossil fuel usage while transitioning to greener alternatives.
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