Canadian oil could help fuel India
Canadian oil producers are tapping into a booming Asian market, and this time it's not China.
Husky Energy (TSE:HSE) told analysts on Wednesday that the company had sold one million barrels of crude from its White Rose operation to an Indian refinery in the fourth quarter of 2013, the Canadian Press reported.
This was India's first purchase of Canadian crude, Husky's Chief Operating Officer told the Canadian Press. Oil from Husky's White Rose field – located about 350 kilometres off the coast of Newfoundland – has been approved for use in India's state-owned refineries.
CEO Asim Ghosh said this sale had opened up "a potentially very large new market for us.”
“Once Energy East is up, India becomes a cost competitive destination for Canadian crude," Ghosh added.
TransCanada's (TSE:TRP) proposed $12 billion Energy East pipeline would carry crude across the country to refineries in eastern Canada.
Meanwhile, Indian news outlet Financial Express recently wrote that imports from Canada's oil sands could help reduce India's massive energy bill. Oil imports are the biggest contributor to India's current account deficit.
"It is clear that even as China and Japan would compete with India for Canadian crude, India can get a sizeable chunk of it, leading to huge savings on oil import bill and oil subsidies," the Financial Express wrote.
Earlier this month Canada's Minister of Natural Resources Joe Oliver travelled to India to promote Canada as a “safe, secure, reliable market," Brampton Guardian reported.
“Canada is becoming the leading supplier of energy,” he said, as reported by Bramton Guardian. “India needs what we have, and want to diversify its source of supply."
India is the world's fourth-largest energy consumer and its biggest supplier is currently the Middle East.