India looks to expand Mexican crude oil imports to bolster energy ties

India is looking at expanding its crude oil imports from Mexico as part of a larger effort at strengthening bilateral ties through enhanced cooperation in the energy sector. As part of the new efforts, ONGC Videsh Ltd (OVL), the overseas arm of state-owned explorer ONGC has decided to open a dedicated office in the Latin American nation. 

These are the key takeaways from the just concluded two day visit of an Indian delegation led by petroleum minister Dharmendra Pradhan to Mexico. The delegation is now visiting Bogota in Colombia as part of the five day visit to the two nations. 

“India is trying to diversify its import sources of energy and more than 20 per cent of crude import of India is presently sourced from Latin America. Mexico figures high on the priority of India to enhance bilateral energy ties,” Pradhan said during his meetings with the Mexican energy minister Pedro Joaquín Caldwell, economy minister Ildefonso Guajardo Villareal and Chief Executive of PEMEX, the national oil company of Mexico, Emilio Lozoya Austin.

As part of the delegation, Pradhan is accompanied by Indian Oil (IOC) Chairman B Ashok, ONGC Videsh Managing Director N K Verma, Cairn India CEO Mayank Ashar, Adani Gas CEO Rajeev Sharma, Reliance Industries’ President-Strategy Atul Laul and L&T’s Deputy General Manager Manish Mishra, among others.

Mexico opened up its energy sector for private and foreign participation last year,  offering opportunity for enhancing and diversifying bilateral energy cooperation. Currently, IOC, Reliance Industries (RIL) and ESSAR buy around 6 million tonne of crude oil from Mexico. “The energy reforms in Mexico provides a window to transform the relationship from buyer – seller relationship to that of an energy partnership,” the minister said.

He added that Indian companies are willing to participate in the exploration and production activities in Mexico including in deep-water and unconventional resources. He also said India has emerged as a modern refining hub with expertise to develop complex refineries at most cost-effective manner. India can help Mexico to upgrade its refining sector. He asked the Mexican side to consider doing business with Indian Engineering, Procurement and Construction (EPC) and infrastructure companies. He said India wants a long- term partnership with Mexico in hydrocarbon sector.

India imports 78 per cent of its crude oil from overseas and is trying to diversify its import base. Mexico and Colombia have brought in phased deregulation and have put together an independent regulatory framework for their oil and gas. Their strategic location also allows them an easy access to both the Pacific and Atlantic markets.