Nature’s way

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smoothly. On top of that, we have been seeing depleting oil reserves leading to higher prices, which touched $110 per barrel recently. Due to the growing need and simultaneous shortage of crude oil in the future, everyone will be looking to safeguard their energy requirements and also find various other alternatives to feed the energy demand. India is dependent on oil imports for its requirement. India's crude oil production was 29.3 lakh tonne in 2006-07 and meets 75% of its total oil requirement through imports. Also, in the case of natural gas, 75 mmcm is produced in the country and the consumption is 96 mcm, so the balance is provided through imports. To fulfil consumption domestically, it is estimated that the blocks awarded to Reliance Industries alone could give production of 80 mcm. Other than this, blocks awarded to ONGC and Cairn India will also lead to higher production of crude oil in the country to meet the requirement. All this will see an investment of more than $4 billion in oil and gas exploration.

What is it?

This huge investment reflects healthy growth in the coming years. To tap this opportunity, some of the mutual funds have launched funds, which focus on energy and natural sectors. Specifically, the ones engaged principally in the discovery, development, production, or distribution of natural resources. Natural resources companies include oil, natural gas, and precious metals. The companies providing related services such as mining, drilling, rigging, chemicals, related parts, and equipment will also be affected along with the energy sector. Those companies engaged in transporting, distributing, and processing natural resources should be targeted. Oil-marketing companies do not have as much scope as the restrictions on increasing retail prices parallel to crude oil prices hampers their profitability.

The funds will also look at non-conventional energy companies. 'However, there are very few companies listed that are related to this category. So our focus would be on conventional energy,' says Kumar.