Stating that the the status of the energy sector in India was “highly uneven”, Prime Minister Narendra Modi on Monday hinted at further reforms in many areas in the sector. At an interaction here with oil and gas CEOs and experts from across the world, he also recognised the need for a comprehensive energy policy.
“Now with this liberalised regime India offers around $300 billion investment opportunity in the next 10 years in the oil and gas sector. We want investors, both domestic and global, who can bring in the best technology and capital,” petroleum minister Dharmendra Pradhan had told the gathering during the meeting. Speaking to reporters later, Pradhan added that the prime minister urged the industry players to have more investments to have both vertical and horizontal growth in the sector.
According to the department of industrial policy and promotion (DIPP), FDI inflows into India’s petroleum and natural gas sector between April 2000 and June 2017 has been just $6.86 billion, 2% of the total inflow during the period.
A senior official associated with the government, however, said the global oil giants evinced interest to invest a whopping $1 trillion in the country over the next five years. While Saudi Aramco, which opened an office in India on Sunday, alone intends to invest $300 billion over the next three to four years, Rosneft — which had invested $13 billion for acquiring Essar Oil — has plans to ramp it up, he said. However, the oil biggies haven’t issued any such statements.
While the prices of auto fuels namely high-speed diesel and motor spirit have been deregulated, the wasteful element of LPG subsidy outgo has been curtailed and gas extracted from difficult terrain is offered premium prices, experts reckon more needs to be done to enthuse investors.
CEOs and/or officials from Rosneft, BP, Reliance, Saudi Aramco, Exxon Mobil, Royal Dutch Shell, Vedanta, Wood MacKenzie, IHS Markit, Schlumberger, Halliburton, Xcoal, ONGC, Indian Oil, GAIL, Petronet LNG, Oil India, HPCL, Delonex Energy, NIPFP, International Gas Union, the World Bank and the International Energy Agency were present at the India Energy Forum organised by CERAWeek.
Subjects such as the need for a unified energy policy, contract frameworks and arrangements, requirement of seismic data sets, encouragement for biofuels, improving gas supply, setting up of a gas hub, and regulatory issues came up for discussion, a government statement said.
The development comes at a time when the country is offering exploration blocks under the Open Acreage Licensing Policy. Though India has 26 sedimentary basins over an area of 3.14 million sq km, only seven basins are used for hydrocarbon exploration. In the new rounds, 1.5 million sq km of onshore and 1.2 million sq km of offshore areas will be on offer, and blocks will be offered through the revenue-sharing model.