Oil Daily | India Boosts Domestic Oil Exploration Amid Record Import Dependence and Volatile Prices

【Latest Oil Policies】

India is launching a national deepwater exploration mission to boost its domestic energy supply and reduce reliance on imports. The mission will complement the existing National Critical Minerals Mission, aiming to secure resources crucial for energy, industry, and defense. India seeks strategic autonomy with plans to explore 1,200 sites for critical minerals.

India is enhancing its domestic oil and gas production amid rising demand and volatile international energy prices. The country's import dependence for crude oil reached a record high in the fiscal year ending March 2025, with 88.2% of crude consumed being imported, reflecting continued growth in fuel demand and stagnant domestic production.

India prepares for an offshore exploration boom with the biggest-ever acreage offered under the Open Acreage Licensing Programme OALP Round X. The focus is on strengthening domestic exploration and production efforts, encouraging joint participation in bidding rounds, subsea manifold collaboration, and offshore technology development.

【Industry News】

Coal production in China fell by 3.8% in July, the first annual decline in 2024, due to government curbs on oversupply and adverse weather conditions. Overall coal production in the first seven months was up by 3.8% compared to last year, reaching 2.78 billion tons.

Asian coal imports fell by 7.8% in July, driven by decreased imports from China and India, despite increased imports by Japan and South Korea. China's coal purchases for 2025 are expected to be significantly lower compared to 2024, contributing to an 8.4% decline in coal shipments to Asia over the year.

Electricity generation from hydrocarbons in China surged to a one-year high in July due to record temperatures, despite a downward trend since the start of 2024. Coal and gas generation rose by 4.3%, driven by a decline in hydropower amid drought conditions and the inability of wind and solar to meet demand swings.

Canada's oil sands producers are boosting crude output by optimizing maintenance cycles and enhancing efficiencies instead of starting new projects. Despite lower oil prices, production is expected to reach an annual all-time high, with S&P Global Commodity Insights forecasting continued growth in output beyond this year.

【Company News】

Indian Oil Corp has bought more U.S. West Texas Intermediate crude for October delivery, amid U.S. threats of tariffs over Indian imports of Russian crude. India continues Russian oil imports despite potential tariffs but is increasingly sourcing from other regions, including the Middle East, U.S., Canada, and Nigeria.

Citgo Petroleum reported second-quarter net earnings of $100 million, rebounding from a loss a year earlier. The company faces a U.S. court-ordered auction to compensate creditors due to Venezuela's debt defaults. Competing bids have introduced uncertainty in the sale, potentially affecting Citgo's future ownership.

Mexican President Claudia Sheinbaum announced former Pemex CEO Carlos Treviño's detention in the U.S. on corruption charges. Pemex reported its first quarterly profit in over a year, aided by currency effects despite ongoing production challenges and plans to stabilize finances with pre-capitalized notes and a new debt issue.

India's state-owned refiners are reconsidering Russian crude purchases following U.S. tariff threats but are securing non-Russian crude for delivery amid discounts. India has significantly boosted Russian oil imports but is negotiating a trade deal with the U.S. to avoid steep tariffs and diversify energy sources.

Major data center operator Equinix has announced agreements to secure advanced nuclear electricity for its global operations, highlighting a trend of exploring nuclear power to meet growing energy demands. The deals aim to provide over one gigawatt of electricity, signaling interest in next-generation nuclear technologies.

Centrica and Energy Capital Partners have acquired the UK's largest LNG import terminal, Grain LNG, for $2 billion. The terminal offers long-term contracted cash flows and is crucial for energy security, aligning with Centrica's investment strategy in critical infrastructure during the energy transition.

【Others】

China's government campaign against industrial overcapacity has led to inspections ensuring coal mines adhere to quotas. Despite record domestic coal output, imports fell, causing a drop in Asia's overall coal imports in July as China and India reduced purchases.