Russian Crude Procured Under $60 A Barrel? ONGC Chief Clears Air
Freight costs of Russian crude are much higher than from the Middle East and, therefore, the landed price is not very different, says Arun Singh.
Arun Kumar Singh, chairperson of Oil & Natural Gas Corp., put speculations of Russian crude being available below $60 a barrel in the spot market to rest on Friday, stating that it was not true.
ONGC is prepared to navigate a turbulent global energy environment, the managing director told NDTV Profit on Friday, noting that while the world remains uncertain, crude oil prices would unlikely stay volatile for an extended period.
"If oil prices remain rangebound, ONGC is prepared to tackle costs. We have taken a host of steps in terms of logistics and drilling rigs," Singh said.
The CMD pointed out that drilling rig prices have fallen, providing a cost offset, while logistics expenses have been managed by halving the distance from the company's northern fields, thereby cutting the cost of Platform Supply Vessel and Offshore Support Vessel deployment. "We are hopeful of containing our costs," he added.
Singh said refiners evaluate procurement of Russian crude only when it is economical. "From time to time Russian crude is found economical. But freight costs of Russian crude are much higher than from the Middle East, and therefore the landed price is not very different," he explained.
On ONGC Videsh's overseas strategy, Singh reiterated that expansion plans remain aligned with the national interest. "ONGC Videsh will continue to expand if it is in the interest of the nation. The government's decision is sacrosanct for us," he said, while noting that efforts are underway to increase production at the company's Russian assets.
