India Set to Account for 35% of Global Energy Demand Growth in Coming Decades
India will drive up to 35% of global energy demand growth over the next 20 years, petroleum minister Hardeep Puri said at the Gastech conference that started on Tuesday in Houston. “If you say that global demand is increasing by one percent, ours is increasing by three times that,” Puri said. “In the next two decades, 35% of the increase in global demand will come from India.” At the same time, the official said that India wants to succeed with the energy transition as well. “We will manage and succeed…on the green transition,” Puri said. “That’s the part with which I am most satisfied.” India is already one of the biggest drivers of energy demand growth and a top energy importer. Earlier this year, the U.S. Energy Information Administration forecast that the country’s industrial expansion and energy demand was going to drive a threefold increase in natural gas demand. In 2022, India’s natural gas consumption amounted to 7.0 billion cubic feet per day, with over 70% of the demand coming from the industrial sector. By 2050, India’s natural gas consumption is set to more than triple to 23.2 Bcf/d, according to EIA’s estimates. Oil demand on the subcontinent is also on the rise, which has prompted plans to boost refining capacity significantly. At the end of last year, the country’s petroleum ministry announced plans to expand refining capacity by 1.12 million bpd every year until 2028. Total Indian refining capacity is expected to increase by 22% in five years from the current 254 million metric tons per year, which is equal to around 5.8 million bpd, according to these plans. Yet India is also eager to take part in the energy transition. It already has ambitious targets, seeing 500 gigawatts of renewables capacity installed by 2030, compared to around 153 GW capacity now. Earlier this month, Renewable Energy Minister Pralhad Joshi said that a number of banks had pledged a total of $386 billion in investment commitments to help India boost its renewable energy industry.
India Will Continue to Buy Cheap Russian Crude Oil
India will not change its energy policy to buy oil and gas at the lowest possible price and will continue to purchase cheaper Russian crude supply, Indian Oil Minister Hardeep Singh Puri told Reuters at the Gastech conference in Houston. “If an entity is not under sanctions, there is no question I will buy from the cheapest supplier,” the minister said. The world’s third-largest crude oil importer, India, relies on imports to cover more than 85% of its petroleum consumption, which is growing in lockstep with economy and refinery expansion plans. Over the past two years, India has become a key buyer of Russia’s oil, which is selling at a discount because of the sanctions and embargoes on Russian crude exports to Western countries. The attractiveness of cheaper crude supply has made Russia the single biggest supplier of oil to India. In July, India even topped China to become the biggest buyer of Russian crude oil, as Chinese refiners lowered purchases amid falling refining margins and tepid fuel demand. A record 44% of India’s total imports in July came from Russia, according to data from industry and trade sources compiled by Reuters. India’s imports from Russia hit a record 2.07 million barrels per day (bpd) in July, up by 4.2% from June and up 12% from the same month a year earlier. India has snapped up a large part of Russian spot supply over the past two years, but it is now looking to sign long-term supply deals. Indian state-held refiners have started jointly to discuss terms of a potential deal with Russia for long-term supply of Russian oil, a government source with knowledge of the matter told Reuters in July. India needs “predictable and stable” oil supplies amid expanding refining capacity, the source added. India expects to boost its refining capacity by around one-fifth to have 6.19 million bpd of crude processing capacity by 2028, according to its junior petroleum minister.
Natural Gas Executives Clash With U.S. Officials Over Biden’s Energy Policies
The Biden Administration is undermining U.S. energy security and global climate efforts by seeking to halt LNG export permitting and lacking a cohesive policy to help allies in need of American energy, executives at some of the biggest U.S. oil and gas companies said at the Gastech conference in Houston. The U.S. Administration paused new LNG export capacity permits in late January, under pressure from climate activists. Those claimed that LNG was even worse for the environment than coal and any new export capacity would aggravate what they see as an already grave situation with the earth’s climate. In July, a Louisiana federal judge blocked President Biden’s pause on new LNG export capacity approvals, ruling in favor of 16 states that sued the federal government for the pause. Yet, the pause in LNG permitting has enraged the industry, which criticized the Administration’s policies at the ongoing Houston conference. “Instead of imposing a moratorium on LNG exports, the administration should stop the attacks on natural gas,” Chevron’s CEO Mike Wirth said at the event. “When it comes to advancing economic prosperity, energy security and environmental protection, an LNG permitting pause fails on all three,” he added. ConocoPhillips chief executive Ryan Lance noted the slow pace of project approvals, commenting “We absolutely need permitting reform, and we need more infrastructure.” At Gastech, the U.S. executives also pointed out that natural gas would be critical to support the surge of AI and data centers. “AI’s advance will depend not only on the design labs of Silicon Valley, but also on the gas fields of the Permian basin,” Chevron’s Wirth said. As the AI boom is driving a significant increase in demand for electricity in the United States, natural gas-fired power generation is on the rise to meet higher consumption. In response to the attacks, Brad Crabtree, an assistant secretary for fossil energy and carbon management at the U.S. Department of Energy, pointed out that the administration’s Infrastructure Bill has made billions of dollars available for new energy projects.
Asian Markets Are Backbone of Success for Canada’s New Oil Pipeline
Fresh data coming in has revealed that Canada’s newly expanded Trans Mountain pipeline (aka TMX) is indeed delivering on its promise to diversify the country’s crude oil markets. According to data from Vortexa via Bloomberg, Canadian oil producers have shipped about 28 million more barrels of crude off the country’s west coast since the expanded Trans Mountain pipeline kicked off operations in June compared to the corresponding period in 2023. Meanwhile, shipments from the U.S. Gulf declined by 1.68 million barrels over the timeframe. This encouraging trend proves that TMX is working as intended by lowering the Canadian oil industry’s reliance on US-bound pipelines and American refiners, which forced Canadian producers to accept deeper discounts for their crude as well as leaving them exposed to oil price shocks. As expected, the vast majority of the TMX crude is headed for the Asian market with nearly two-thirds going to China, India, South Korea and Brunei, with the remainder going to U.S. refiners. China has emerged as TMX’s biggest customer, purchasing 8.24 million more barrels of Canadian crude since June. That figure marks a 11.6 million increase in volume of barrels shipped off Canada’s west coast, along with a reduction of 3.35 million barrels via the Gulf. South Korea was the second biggest buyer, purchasing 3.91 million more barrels via Canada’s west coast, while India took 1.53 million more barrels. Chinese private refiner Rongsheng Petrochemical purchased two Canadian Access Western Blend (AWB) crude cargoes from ConocoPhillips (NYSE:COP) and Vitol on top of another two AWB cargoes it bought via a tender. Cold Lake and AWB are heavy sour crude containing 3.5-4% sulfur and with API gravity of 21-22 degrees. South Korean refiner GS Caltex split a 550,000-barrel Cold Lake crude cargo with Japan’s top refiner ENEOS, with GS Caltex taking 300,000 barrels while ENEOS will get 250,000 barrels. South Korea’s top refiner SK Energy, a unit of SK Innovation, bought a 550,00-barrel cargo from Unipec while Hengyi Petrochemical, a refinery operator in Brunei, also purchased a similar volume of crude from PetroChina Co (OTCPK:PCCYF). All the cargoes were sold at discounts of between $5 and $6 a barrel to ICE Brent. The expanded TMX pipeline will triple the flow of crude from landlocked Alberta to Canada’s Pacific coast to 890,000 barrels per day (bpd). TMX provides Asian refiners an opportunity to diversify their imports while also giving Canadian producers more access to U.S. West Coast and Asian markets. TMX crude exports are expected to clock in at ~350,000-400,000 bpd, and will compete with heavy grades from Latin America and the Middle East. According to Muyu Xu, a senior crude oil analyst at analytics firm Kpler, Cold Lake crude is about $10 per barrel cheaper than Iraq’s Basra Heavy for deliveries to China. “Canada’s TMX crude attracts interest from Asian buyers who are keen to secure cheap supplies of heavy grades but do not have access to U.S.-sanctioned Venezuelan crude,” XU told Reuters. “It will still take some time for refiners to experiment with and test TMX crude as the first few cargoes have just arrived,” she added. U.S. Gulf Coast Still Important That said, the U.S. Gulf Coast is likely to continue seeing brisk business in the near future. According to Vortexa analyst Rohit Rathod, the Gulf Coast’s biggest attraction remains the ease of loading very large crude carriers (VLCCs), which can carry up to 2 million barrels of oil, a feature that has helped maintain high levels of Canadian exports from the U.S. Gulf Coast. For instance, India’s Reliance Industries shipped 2 million barrels of Canadian crude via a VLCC in May from Vancouver to its refinery in Jamnagar. In comparison, smaller Aframaxes that typically carry up to 800,000 barrels are limited to loading only about 550,000 barrels at Vancouver due to port draft restrictions. In other news, the Canadian government is seeking to privatize TMX. Trans Mountain Corp., owner of TMX, is arranging a bond sale to refinance part of its debt ahead of the Canadian government’s eventual sale of the oil pipeline operator. The company had C$25.3 billion ($18.4 billion) debt as of March 31, including credit agreements with a syndicate of lenders containing two facilities totaling C$19 billion. The Canadian government bought and nationalized the original pipeline from a unit of Kinder Morgan Inc. (NYSE:KMI) in 2018 to ensure that the expansion would be built. In effect, the federal government acquired its corporate owner Trans Mountain, which became a federal Crown corporation with Ottawa framing this decision around the desire to secure a key Canadian asset. TMX ended up witnessing massive cost overruns, with the project costing C$34 billion, more than six times the original estimate.
India, US Push Sustainable Aviation Fuel, Hydrogen in Buses
India and the US have agreed to give impetus to sustainable aviation fuel, promote electrification of medium and heavy-duty vehicles and use of hydrogen in buses, tractors and heavy equipment, said a joint statement issued after the Strategic Clean Energy Partnership dialogue between the two nations. The two nations “welcomed increased investment in each country’s clean energy markets,” according to the statement issued after the Strategic Clean Energy Partnership (SCEP) Ministerial convened by US Energy Secretary Jennifer Granholm and Indian Minister of Petroleum and Natural Gas Hardeep Singh Puri in Washington DC on Monday. “While recognising the need to work towards a just, orderly and sustainable energy transition, which prioritises access to reliable, affordable, and clean energy supplies, the (two) sides welcomed the important role that energy trade plays in supporting the national priorities of both countries,” the statement said. The two countries highlighted the importance of modernising the power distribution sector to supply 24×7 reliable power to consumers, welcomed support for India’s smart metering deployment, as well as expanded efforts on inverter-based resources, power market reforms, system inertia estimation, and cybersecurity. The ministers also commended the Indian Railways efforts to achieve net zero carbon emissions by 2030 and welcomed collaboration to support India’s first round-the-clock renewable energy procurement of over 1.5 GW and development of an energy efficiency policy and action plan for all railway facilities. “The two countries agreed to give an impetus to sustainable aviation fuel,” the statement said. Sustainable aviation fuel (SAF) is an alternative fuel made from non-petroleum feedstocks that reduces emissions from air transportation. It can be produced from non-petroleum-based renewable feedstocks, including the food and yard waste portion of municipal solid waste, woody biomass, fats/greases/oils, and other feedstocks. SAF can be blended in jet fuel to cut carbon dioxide emissions. “In this context, the sides welcomed new engagement on sustainable aviation fuels (SAF) with an inaugural SAF workshop to support training on R&D, tax incentives, supply chain capacity building, market development, financing opportunities, fuel certification, regional and international coalition building, and facilitating commercial partnerships. The ministers also welcomed the development of two joint reports on SAF and biofuels under the Biofuels Task Force,” the statement said. The two nations reiterated their commitment to enhancing energy efficiency and welcomed collaboration on super-efficient appliances to improve efficiency standards, boost the deployment and manufacturing of high-efficiency affordable cooling systems and promote supply chain diversification. The ministers welcomed new collaboration on electrification of medium- and heavy-duty vehicles as well as the use of green hydrogen in buses, tractors and heavy equipment. While the two ministers discussed carbon capture, utilisation and storage (CCUS), they noted progress under a workstream on methane abatement in the oil and gas sector. “The ministers expressed satisfaction with the range of productive public-private sector dialogues that inform enabling policy and regulatory frameworks; help scale, deploy, and reduce costs of clean energy technologies; and facilitate investment and commercial partnerships,” it said. They recognised that energy transitions require concerted action and implementation at the national and local levels to ensure viable, sustainable clean energy efforts and a just energy transition. To that end, the ministers welcomed capacity building and dissemination of best practices, across all levels of government. The ministers recognised the progress the two countries have made to accelerate the development and deployment of emerging clean energy technologies, advancing renewable energy deployment and reliable grid integration, promoting energy efficiency, and advancing decarbonisation of high-emitting sectors like industry, buildings, and transport. They welcomed the formal launch of the Renewable Energy Technology Action Platform (RETAP) in August 2023, aimed at developing actionable roadmaps for hydrogen, long-duration energy storage, offshore wind, and geothermal, through R&D, pilots and demonstration, and incubation-investment-industry networks. They also expressed satisfaction at the progress being made by both sides under the RETAP mechanism.
NTPC and PetronetLNG plan to cooperate
Indian power company NTPC has signed a memorandum of understanding (MoU) with Petronet LNG, India’s biggest LNG importer, to explore new business opportunities, including the supply of LNG or regasified LNG to its Kayamkulam plant in Kerala, NTPC announced on September 13. The Rajiv Gandhi combined cycle power plant, also known as the Kayamkulam Power Plant, is located in Choolatheruvu, in the Alappuzha district of Kerala, India. Petronet LNG currently operates two land-based LNG import and regasification terminals on India’s west coast, located in Dahej, Gujarat (with a capacity of 17.5mn tonnes/year), and Kochi, Kerala (with a capacity of 5mn tonnes/year). The company is building its third terminal in east India. The proposed facility at Gopalpur Port in the state of Odisha will feature a floating storage regasification unit (FSRU) with an initial capacity of around 4mn tonnes/year, expandable to 5mn tonnes/year as a land-based terminal. Petronet has also recently signedan MoU to supply LNG to Sri Lanka’s LTL Holdings for use in LTL’s dual-fuel power plant in Kerawalapitiya, Colombo.
LNG Industry Faces Uncertain Future
Liquefied natural gas has become a major growth driver for the energy industry. Burning much more cleanly than either coal or oil, gas has earned a place in the energy transition—but that place is far from secure. Despite continued strong demand for LNG—which saw Qatar order 12 new LNG carriers—the expected growth in that demand may fail to live up to expectations. What’s more, challenges abound on the supply side, from sanctions on Russian LNG to supply chain and regulatory problems with U.S. projects, according to a new report by Wood Mackenzie. In early August, a U.S. appeals court vacated the remand authorization of NextDecade Corporation’s Rio Grande LNG export project issued by the Federal Energy Regulatory Commission on the grounds that the FERC should have issued a supplemental Environmental Impact Statement during its remand process. In general terms, this means that the Rio Grande LNG project will be delayed. Construction on Phase 1, which will include three liquefaction trains, continues. Still, the court’s ruling will affect the rest of the project, delaying the final investment decision on Phase 4 and possibly affecting the construction of Phase 2 and Phase 3. In its report about the outlook for the LNG industry, Wood Mac noted that the Rio Grande LNG case is an example of the risks surrounding LNG projects in the United States that are yet to receive a final investment decision, “compounding the uncertainty created by the Biden administration’s “pause” on export approvals in January.” The analysts noted that this infamous pause will probably be lifted after the November elections. After that, regulators would need to devise a new framework for future approvals of such projects in line with all relevant regulations. There is also a potentially more serious issue of demand. The biggest driver of demand growth in the liquefied natural gas space is certainly Asia. Yet right now, the going is good, with Asian imports up by 15% over the first eight months of the year, per Wood Mac. However, Chinese LNG imports are about to start declining because its gas storage sites are nearing capacity, Bloomberg reported earlier this month. And if the winter is mild, these will not empty fast, undermining overall regional demand. Another issue with Asian demand and any bullish assumptions about it is price sensitivity. So far this year, prices for LNG have been quite affordable, hence the strong increase in LNG imports. But, as Wood Mac’s analysts point out in their report, most Asian countries remain highly sensitive to price changes, ready to stop buying the moment the price goes too high. This, incidentally, may be just what is on the cards for U.S. natural gas. Next year, there could be substantially higher gas prices in the United States, Reuters energy columnist Gavin Maguire reported last week, citing data from LSEG. The forward strip of the Henry Hub benchmark suggests that U.S. natural gas prices could average $3.20 per million British thermal units (MMBtu) next year. This would be up from an average price of $2.22 from the benchmark U.S. natural gas price so far this year. Quite a substantial price increase indeed, but not unexpected in the least, after gas drillers were forced to start shutting in wells in the face of weak prices that were eating into their profits. Such a development would see U.S. LNG exports become costlier, discouraging price-sensitive buyers in Asia—and possibly in Europe. LNG imports into Europe, including the EU, Norway, the UK, and Turkey, fell by 20% over the first half of the year, a transition think tank reported this month, with LNG imports into the EU falling by 11%. According to the Institute for Energy Economics and Financial Analysis, LNG imports would fall further over the full year, by some 11.2%. Per the think tank, this is because demand for LNG has reached its peak and, from now on, will be falling. It is, however, likely that price plays a part, too. Europe is no longer the bottomless pockets operation it was until a couple of years ago, and has had to become more frugal with its money. There is also the supply side. The EU specifically filled up its storage caverns with gas last year. The winter turned mostly mild, and a lot of that gas remained unused. European demand, then, may not have peaked, but prices would affect it. Elsewhere, Western sanctions have made it hard for Novatek’s Arctic LNG 2 to really take off. The facility is producing liquefied gas. However, according to media reports, this gas is being shipped to storage instead of to overseas buyers. In Florida, an LNG project has been delayed for five years due to supply chain issues and high costs. “The COVID-19 pandemic created an extremely challenging environment for the negotiation and execution of contracts. Those impediments continued for some time after the effects of the pandemic had begun to subside in 2022,” the company behind the Eagle LNG project told the FERC. Finally, there is the emissions question, which Wood Mac says is going to become increasingly prominent in the future—if other countries follow the EU’s example of insisting on low-emissions LNG, regardless of the price. And that price will inevitably go higher as emission regulation piles on.
Jindal Steel to have big investment on Green Hydrogen
Jindal Steel (JSPL) and Jindal Renewables (JRPL) have inked a historical Memorandum of Understanding to implement India’s biggest investment in green hydrogen by any Indian steelmaker to date. This collaboration underscores a major commitment by both companies towards decarbonization and green energy leadership in India’s steel industry. The MOU outlines JSPL’s plan to integrate green hydrogen into its Direct Reduced Iron (DRI) units in Angul, Odisha. This initiative represents a significant leap toward low-emission steel production. In the first phase, Jindal Renewables will develop a green hydrogen generation capacity of up to 4,500 tons per annum set to commence by December 2025. In addition, the project will also entail a supply of 36,000 tons of oxygen per annum that will be used in the Angul steelworks. JRPL will also be supplying ~3GW of renewable energy to JSPL’s facilities reducing the steelmaker’s dependence on coal-fired energy by 50% in the next 2-3 years. This integration of green energy is expected to drastically lower the company’s carbon footprint. Mr. Sanjay Singh, Director of Strategy and Corporate Affairs at JSPL, expressed his enthusiasm for the collaboration, stating, “This MOU marks a pivotal moment in our journey towards decarbonization using green hydrogen and green energy, accelerating our transition to lower emission steel.
Brazil To Cooperate In Ethanol Production Technology In India
On the sidelines of the G20 Agriculture Ministerial Meeting held on 12 and 13 September 2024 in Cuiaba, Brazil committed to cooperating with India on ethanol production technology. A meeting between Minister of State for Agriculture and Farmers’ Welfare Ram Nath Thakur and Brazil’s Minister of Agriculture and Livestock, Carlos Favaro, took place on September 13, the Ministry of Agriculture & Farmers Welfare stated in a release on Sunday. During the meeting, both sides discussed cooperation in science and technology, ethanol production, and market access. Both parties agreed to collaborate in science and technology, expressing hope that the Memorandum of Understanding between ICAR (India) and EMBRAPA (Brazil) would be finalised before the G20 leaders’ meeting in November. India is seeking access to the Brazilian market for its Sorghum, Rapeseed, Cotton, Wheat, Barley, and Onion bulbs, while Brazil is seeking access to the Indian market for Citrus, among other products. Both ministers expressed optimism about resolving the pending issues that are currently obstructing trade. In June 2024, at the 63rd council meeting of the International Sugar Organisation (ISO), India sought support and cooperation from member countries to adopt more sustainable practices in sugarcane cultivation, sugar and ethanol production, and the better utilisation of by-products. India is the third-largest ethanol producer globally, following the USA and Brazil. The ethanol blending percentage in India increased from 5 per cent in 2019-20 to 12 per cent in 2022-23, while production rose from 1.73 billion litres to over 5 billion litres during the same period, according to the Ministry of Consumer Affairs, Food & Public Distribution. Official data shows that in 2022, bilateral trade between India and Brazil grew by 32 per cent to USD 15.2 billion (India’s exports were USD 8.8 billion, and imports were USD 6.4 billion). In 2023, India’s exports stood at USD 6.9 billion, with imports at USD 4.7 billion. The Indian delegation, led by Ram Nath Thakur, held bilateral meetings with the USA, Brazil, Germany, the UK, Japan, Spain, and the UAE.
Why No Major Oil Company Is Rushing To Drill Pakistan’s Huge Oil Reserves
A long exploration effort has led to the reportedly massive discovery of oil and gas reserves in Pakistan’s territorial waters, a cache so large that it is said it could change the economic trajectory of the beleaguered country. But no one is rushing to drill in Pakistan, and experts are concerned about jumping the gun. According to DawnNewsTV, the three-year survey was undertaken to verify the presence of the oil and gas reserves. “If this is a gas reserve, it can replace LNG imports and if these are oil reserves, we can substitute imported oil,’’ former Ogra (Oil and Gas Regulatory Authority) member Muhammad Arif told DawnTv. However, Arif has cautioned that it would take years before the country could be able to exploit its newfound fossil fuel resources, adding that exploration alone required a hefty investment of around $5 billion and it might take four to five years to extract reserves from an offshore location. Pakistan covers 29% of gas, 85% of oil, 50% of liquefied petroleum gas (LPG), and 20% of coal requirements through imports, according to the Economic Times. Pakistan’s total energy import bill in 2023 clocked in at $17.5 billion, a figure projected to rise to $31 billion in seven years, as per an Express Tribune report. The new discovery is no doubt a big boon for the struggling economy. Since 2021, Pakistan has been hit with mounting debt and skyrocketing inflation, with inflation hitting nearly 30%. Meanwhile, the economy only expanded 2.4% in 2023, missing the 3.5% target. This has forced the country to rely heavily on foreign aid, which is often elusive. In January this year, Pakistan sought $30 billion for gas production to cut its fuel import bill. According to Pakistan’s Energy Minister Mohammad Ali, Pakistan has 235 trillion cubic feet (tcf) of gas reserves, and an investment of $25 billion to $30 billion would be enough to extract 10% of those reserves over the next decade to reverse the current declining gas production and replace the import of energy. The persistently high inflation could push Pakistan over the edge, “There is no precedent in Pakistan’s history of such a long and intense spell of inflation gripping the country,” columnist Khurram Husain has written in Dawn. A Game-Changer? Maybe. Although Pakistan’s hydrocarbon resources are yet to be quantified, some estimates suggest that this discovery constitutes the fourth-largest oil and gas reserves in the world. This could be a potential game-changer in the region’s energy flows. Back in July, S&P Global Commodity Insights reported that four largely unexplored sedimentary basins in India could hold up to 22 billion barrels of oil. In effect, lesser-known Category-II and III basins namely Mahanadi, Andaman Sea, Bengal, and Kerala-Konkan contain more oil than the Permian Basin which has already produced 14 billion of its 34 billion barrels of recoverable oil reserves. Rahul Chauhan, an upstream analyst at Commodity Insights, emphasized the potential of India’s unexplored Oil & Gas sector, “ONGC and Oil India hold acreages in the Andaman waters under the Open Acreage Licensing Program (OALP) and have planned a few significant projects. However, India still awaits the entry of an international oil company with deepwater and ultra-deepwater exploration expertise to participate in current and upcoming OALP bidding rounds and explore these frontier regions,” he has declared. Currently, only 10% of India’s 3.36 million sq km wide sedimentary basin is under exploration. However, Petroleum Minister Hardeep Singh Puri says that that figure will jump to 16% in 2024 following the award of blocks under the Open Acreage Licensing Policy (OALP) rounds. So far, OALP has resulted in the award of 144 blocks covering about 244,007 sq km. Under OALP, India allows upstream exploration companies to carve out areas for oil and gas exploration and put in an expression of interest for any area throughout the year. The interests are accumulated thrice a year following which they are put on auction. According to Puri, India’s Exploration and Production (E&P) activities in the oil and gas sector offer investment opportunities worth $100 billion by 2030. So why is no one rushing to Pakistan to drill? Shell announced it was selling its Pakistan business stake to Saudi Aramco in June last year, and an auction for 18 oil and gas blocks at the same time last year got a muted response from international bidders, at best. No international companies even bid on 15 of the blocks, according to The Nation. In July, the country’s Petroleum Minister, Musadik Malik, told a parliamentary committee that no international companies were interested in offshore oil and gas exploration in Pakistan,and those in the country largely had the exit door in view. It comes down to security, and risk versus reward with Malik explaining to the committee that the cost of security is a major deal-breaker because “in areas where companies search for oil and gas, they have to spend a significant amount to maintain security for their employees and assets”. And security is provided by Pakistan, which has not been up to the task. In March this year, five Chinese engineers were killed in a suicide attack in Pakistan’s northest, when a vehicle rigged with explosives rammed into a bus transporting staff from Islamabad to the giant Dasu dam project in the Khyber Pakhtunkhwa province. The project is part of the $62-billion China-Pakistan Economic Corridor (CPEC). This incident sparked a series of temporary shut-downs across other projects, as well. Earlier that same month, insurgents attacked Chinese assets in Pakistan’s southwest, storming the Gwadar Port Authority complex, which is run by China. The attacks were perpetrated by the Balochistan Liberation Army (BLA), separatists fighting for an independent Balochistan, as reported by the Lowy Institute. Essentially, what this means is that it will be China or bust for Pakistan, as state-owned or state-controlled Chinese explorers have a vastly different appetite for risk. And these massive reserves are not likely to get out of the ground without Aramco showing more desire or the Chinese stepping in, for