In view of the US led sanctions imposed on Russian trade in energy sources, India has been keen to seek different sources of crude suppliers and has in recent months been looking towards the LAC Region.
Amidst the ongoing Russia-Ukraine war, to meet the country’s growing energy needs, for the first time ever, Indian Oil and Petrobras (Brazil’s Petroleo Brasileiro SA) have signed an agreement to source Brazilian crude. In view of the US led sanctions imposed on Russian trade in energy sources, India has been keen to seek different sources of crude suppliers and has in recent months been looking towards the LAC Region.
Another MoU was entered into by Bharat Petroleum Corporation Limited (BPCL) and Petrobras expressing intent to build a long term cooperation including term purchase arrangements.
According to officials, Hindustan Petroleum Corporation Limited (HPCL) has expressed interests in having similar trade arrangements with Brazilian companies.
In an earlier conversation with Financial Express Online, top diplomats and officials had indicated that there will be a delegation visiting Brazil to discuss importing crude from the South American nation to meet its energy needs.
During meetings between Pankaj Jain, Secretary, Ministry of Petroleum and Natural Gas, and other top ministers in Brazil, the two sides agreed to facilitate more engagements between companies of the two sides. The Indian delegation was in Brazil from September 21-24, 2022.
In Brazil, the Petroleum Secretary had meetings with Adolfo Sachsida, Minister of the Ministry of Mines & Energy, Fernando Simas Magalhães, Secretary General, Ministry of Foreign Affairs and Caio Mário Paes de Andrade, CEO Petrobras.
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The delegation led by Mr Jain had representatives of the oil companies as well as other senior officials and they had detailed discussions with UNICA, the Sugarcane & Ethanol Association of Brazil.
The Secretary’s (P&NG) visit is a follow up visit earlier this year in April of former Minister of Mines and Energy Brazil Bento Albuquerque to India and the recently concluded visit of external affairs minister Dr S Jaishankar, last month.
Cooperation in the bio-energy sector, biofuels, investments in oil & gas sector, as well as sourcing of crude and trade in petroleum products were discussed between the two sides earlier this week.
Financial Express Online has reported recently that India is the 5th largest trading partner for Brazil and the bilateral trade in 2021 has touched US$11.5 bn in 2021.
And, according to the Indian mission in Brazil the two way trade between the two countries as of August this year has already crossed US$9 billion. And with a new contract inked in Brazil in the oil sector would add more value to the two way trade.
Indian Investments
The Brazilian side expressed appreciation about Indian companies investing in that country, including the recent announcement of US$1.6 billion. Also later this year Final Investment Decision (FID) for BM-SEAL-11 & BM-SEAL-4 Concession is expected.
The Indian delegation also presented the investment opportunities available in the E&P sector post government’s steps to liberalize the investment regime in this sector as well as ease data sharing with prospective players.
India is also open to engagements with Brazilian companies in India and third countries, especially those in offshore deep/ ultra-deep-water projects. The South American country has agreed to examine this proposal.
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