Promising outlook for India in the energy sector
The insatiable hunger for energy is causing oil and gas imports to spiral since no major strike has taken place since Bombay High and the findings of gas by Reliance in KG basin. This is posing an immense challenge to government planners and economists. With close to 70% of its oil requirements being imported from more than 8 countries, India is a net importer of oil. 30% of the rest is provided by the domestic oil production.
Some interesting facts have come to light at the International Maritime Offshore Logistics forum that appears to have yielded a likely promising outlook for the country. Those involved in Exploration and Production (E & P) activities have expressed confidence that as the search for oil and gas gets into deeper waters, the chances of a major strike is significantly higher.
A number of contributory factors are said to have raised hopes of improving the oil and gas scenario. More than 50 per cent of the gas and oil potential area is yet to be mapped. The number of players now involved in exploration and production and other support activities have mushroomed and there are far more private operators in this sector which earlier was the sole domain of the state owned ONGC and a few public sector oil companies. Indian ship building has made rapid strides especially in the offshore sector.
According to S.C. Tripathi, former Secretary of Petroleum & Natural Gas, a new strategy is in place with the search for oil going into deeper waters. “Offshore resources are easier to access than on land where it is difficult to manage the problems created by the local population and politicians. The focus for prospecting for gas and oil is clearly in the offshore sector. The search is not restricted to just the Indian offshore but various public sector companies are prospecting in 23 countries by partnering with the local companies there.”
“Some Indian EPC contractors will be operating in various potential areas of the world including the Arctic oil and gas fields,” said S. Majumdar, COO of Offshore, Pipavav Defence and Offshore Engineering Company Ltd. “Because of their proven ability and expertise they have qualified to operate in various Indian offshore projects provided they get support from logistic service providers.”
The rapid growth of the Indian ship building industry has also greatly helped promote the offshore E & P activity pointed out S. Sarkar, President of Bharati Shipyard Ltd. “A number of shipyards in India which have produced vessels for the Indian offshore operations have helped enhance productivity. Even Ice Class vessels built here are already in operation in various oil and gas offshore waters all over the world,” he stated. “Indian shipyards continue to cater to worldwide markets meeting exacting environmental and production standards necessary for performing in perilous and hostile conditions.”
India is the world's fourth largest importer of oil. The petroleum and natural gas industry in India has attracted foreign direct investment (FDI) worth US$ 3.280.72 million from April 2000 to September 2011, according to the data provided by Department of Industrial Policy and Promotion (DIPP).
Though gas has been discovered off the East coast of India in the KG basin more major discoveries are yet to take place according to A.K. Jain, Executive Director, Chief Offshore Logistics of Oil and Natural Gas Corporation. “Today our import bill for oil and gas is becoming an issue and this will continue to grow. Oil and gas have been found by Reliance and Cairn India but this will not last forever. We have not done enough and exploration has yet to be initiated in eleven basins where prospects are high.
He felt that much can and needs to be done to factor in suitable and cost effective technology. 50% of the construction cost for offshore gas supplies involves construction of supply vessels. Hence, there is a need to get together with various logistic and other service providers on various fronts for cutting down costs and to enhance efficiency.
India has emerged as the 5th largest refining country in the world, accounting for 4 per cent of the world's refining capacity. India exported 50 million tonnes (MT) of refined petroleum products during 2010-11. With our refining capacity increasing further, this figure is likely to touch about 70 MT by 2014, making India one of the world's major exporters of petroleum products.