South Asia Investor Review

India, a western ally, is openly buying Russian coal, oil and weapons worth tens of billions of dollars at deep discounts. These actions amount to busting western sanctions and financing President Vladimir Putin's war on Ukraine. Many smaller developing countries, including Bangladesh and Pakistan, are abiding by these sanctions and suffering from the consequences in terms of high prices of fuel and food. Why these double standards? Do these policy contractions serve the broader US interests in the Asia region?  India's Russian Imports Soaring Since the Start of Ukraine War. Source: Reuters India's Russian coal imports are up 6-fold from May 27 to June 15, 2022, according to  Reuters . Delhi's Russian oil buying has jumped 31-fold in this period.  Bulk shipments of Russian thermal coal to India began in the third week of May, 2022.  India is defying western sanctions to buy millions of barrels of discounted Russian crude oil, hiding their origin and exporting refined...

Oil consumption in Pakistan jumped 19% to 20.8 million tons in 2021, a strong indication of the country's economic recovery from the COVID-impacted 2020. In addition to oil, Pakistanis also consumed nearly 4 billion cubic foot of natural gas every day. Energy is fundamental to the functioning of any economy.  Pakistan Oil Consumption. Source: Arif Habib Pakistan's furnace oil consumption has been declining for several years as power producers continued to switch fuel to liquified natural gas (LNG) in recent years. However, the sudden jump in LNG prices forced them to use more furnace oil in  year 2021  than in 2020. There was also a big jump in diesel (HSD) and petrol (MS) with a rise in number of vehicles on the nation's roads.  Pakistan LNG Imports 2017-2021 in million tons    Pakistan Natural Gas Consumption in Billion Cubic Feet Per Day “Year 2021 proved to be remarkable for the automobile sector as there was a volumetric sales growth of 90% on a year-o...

Soaring LNG prices are adversely affecting Pakistan's balance of payments and threatening the nation's  post-COVID  economic recovery.  Pakistan's trade deficit has widened to nearly $12 billion in July-September 2021 quarter, up more than 100% from the same period last year. The nation's heavy reliance on expensive imported energy has been the main cause of prior balance of payments crises that have forced it to seek  IMF bailouts  more than a dozen times in the last 70 years.  Global LNG Prices. Source: The Peninsula Qatar   Pakistan: World's Fastest Growing LNG Market. Source: Bloomberg Global Commodity Price Increases The average LNG price for November delivery into Northeast Asia was estimated at about $32 per metric million British thermal units (mmBtu), up nearly 20 percent from the previous week, according to  the Peninsula Qatar publication . Price agency S&P Global Platts said on Thursday that its Japan-Korea-Marker, which is widely ...

Prime Minister Imran Khan has recently raised Pakistanis' hopes of ExxonMobil and ENI being on the verge of a massive discovery of offshore oil and gas reserves in Pakistan. Is this real? Or mostly hype? What is the size of these reserves? Will it be more than sufficient to meet Pakistan's current needs of over  200 million barrels  of oil per year? Will Pakistan become a net exporter of oil and gas like major OPEC nations? Top 3 Offshore Drilling Sites in Asia-Pacific. Source: Bloomberg Why is it taking so long to get confirmation from the companies involved? What are the technical issues in getting confirmation of these huge reserves? Why is there such a big concern about blow-out? Is it because the  1.5 billion barrels  pre-drill estimate of Kekra-1 well in block G of the Indus basin off the Karachi coast? Could such a large reserve cause a major blow-out accident like the one British Petroleum had in Gulf of Mexico near Louisiana in the United States? How...

Blowout concerns have stopped offshore drilling in Pakistan yet again. It was underway to confirm discovery of oil and gas in at Kekra-1 well in G-bloc with pre-drill estimate of over  1.5 billion barrels  of oil. It was scheduled to restart on April 20, 2019 after pause of 12 days, according to Pakistani media reports. Now it is delayed until the blowout preventer equipment is fixed and ready to use again. Offshore Blowout Preventer Stack. Courtesy: British Petroleum Blowout Preventer Problem:  The drilling was stopped on April 8 at the depth of 4,810 meters for cementing and casing process which took almost 12 days to complete. Now there are concerns about the proper functioning of the blowout preventer (BOP). Once the BOP repair is completed,  Mobile Exxon and ENI  as joint operators at Kekra-1 well will resume drilling of the remaining 650-800 meters. Time required to drill the remaining 650-800 meters will depend on the rate of penetration (RoP)....

Pakistan's consumption of oil and gas has rapidly grown over the last 5 years, an indication of the nation's accelerating economic growth. Pakistan is among the fastest growing LNG markets , according to  Shell 2017 LNG report . Pakistan Oil Consumption in Barrels Per Day. Source: CEIC.com Oil consumption in Pakistan has shot up about 50% from 400,000 barrels per day in 2012 to nearly 600,000 barrels per day in 2017. During the same period, Pakistan's gas consumption has risen from 3.5 billion cubic feet per day to nearly 4 billion cubic feet per day, according to British Petroleum data . Pakistan is among the fastest growing LNG markets, according to  Shell 2017 LNG report .  The country has suffered a crippling energy shortage in recent years as demand has risen sharply to over 6 billion cubic feet per day,  far outstripping the domestic production of about 4 billion cubic feet per day. Recent LNG imports are beginning to make a dent in Pakistan's ong...

Pakistan made two key oil and gas discoveries in the third quarter and another three discoveries in the fourth quarter of 2017. These discoveries may have prompted the US-based Exxon-Mobil to join off-shore drilling efforts in Pakistan. American energy giant's entry in Pakistan brings advanced deep sea drilling technology, its long experience in offshore exploration and production and its deep pockets to the country. US Energy Information Administration  (EIA) estimates  that Pakistan has technically recoverable deposits of 105 trillion cubic feet (TCF) of gas and 9.1 billion barrels of oil. Exxon-Mobil is expected to accelerate exploration and lead to more discoveries and increased domestic oil and gas production. Top Countries Discovering Oil and Gas: Russia led with 10 discoveries, followed by Australia with seven discoveries and Colombia with four discoveries. Pakistan and the UK each had three discoveries in the fourth quarter of 2017, according to  Global Oil an...

Pakistan joined the list of LNG importers last year and promptly became one of the world's fastest growing LNG markets, according to  Shell 2017 LNG report .  The South Asian nation has suffered a crippling  energy shortage  as demand has risen sharply to over 6 billion cubic feet per day,  far outstripping the domestic production of about 4 billion cubic feet per day. Recent LNG imports are beginning to make a dent in Pakistan's ongoing energy crisis and helping to  boost economic growth . Current global oversupply and  low LNG prices  are helping customers get better terms on contracts. Pakistan Gas Market Forecast. Source: Platts Global LNG Market: Pakistan, Egypt and Jordan together imported 13.9 million tons of LNG, more than the combined increase of 11.9 million tons by the most populous nations of China and India. The biggest increase in LNG exports in 2016 came from Australia, where exports increased by 15 MT to a total of ...

Pakistan has recently negotiated a good bargain with Qatar for importing $16 billion worth of liquified natural gas (LNG) . Pakistan will import as much as 20 million tons of the super-chilled gas annually from various sources including Qatar, enough to fuel about two-thirds of Pakistan’s power plants. Gas shortage has idled half the nation’s generators. A 75 percent drop in LNG prices since 2014 has  dramatically reduced the cost of the South Asian country’s energy needs, according to a Bloomberg report. LNG arriving in Pakistan from Qatar will fetch 13.37% of the preceding three-month average price of a Brent barrel (considering the present Brent price as a proxy, that would equate to $167.5 per 1000 cubic meters), according to a report in Azerbaijan's Trend News .  It translates to $4.50 per million BTUs. A comparison with Iran's gas deals with Turkey and Iraq indicates that Iranian gas will not be competitive with Qatari LNG on Pakistani market . In 2014 Iran was ...

Pakistan is known to have significant natural gas deposits trapped in the form of methane hydrates in sedimentary rocks off the coast of Baluchistan . Tragic as yesterday's earthquake is in terms of loss of human life, it may also have triggered the release of substantial amount of gas which pushed up a new island in the Arabian sea. A team of scientists from the National Institute of Oceanography in Karachi will visit the site this week to investigate it. In a study published online in the journal Nature Geoscience and reported recently by New York Times , European researchers said that an underwater quake off Pakistan nearly 70 years ago likely fractured seafloor sediments and created pathways for the release of methane gas which still continues to bubble up from below. The researchers say the phenomenon may be widespread enough that climate scientists should take it into account when estimating the amounts of heat-trapping gases in the atmosphere. Dr. David Fischer, th...