Pradhan woos foreign firms to invest in India's oil & gas sector
"Our focus is to attract global investments into the oil and gas sector, as India would invest $100 bn by 2024 in refining, pipelines and gas terminals," he said
Abu Dhabi/New Delhi: India on Monday wooed foreign companies to invest in its oil and gas sector as the world's third-largest energy consumer is likely to see over $100 billion spending in energy infrastructure creation to meet rising demand.
Oil Minister Dharmendra Pradhan, who is on a two-day visit to the United Arab Emirates, showcased investment opportunities, promising political and fiscal stability, predictable policies and a huge diverse market.
"Our focus is to attract global investments into the oil and gas sector, as India would invest $100 billion by 2024 in refining, pipelines and gas terminals," he said at a conference in Abu Dhabi. "There is no better place to invest (than India) if you are in the business of energy."
India is expanding oil refining capacity to produce more fuel and petrochemicals as also investing in pipelines and terminals to increase the share of natural gas in the energy mix.
With no one fuel expected to meet all the energy needs of the vast nation, a closer look at India's energy mix reflects a clear trend towards gas and renewables, he said adding that the share of natural gas in the country's energy basket is being targeted to be raised to 15 per cent by 2030 from the current 6 per cent.
"India has a huge appetite for energy and will be the key driver of global energy demand in the coming decades," he said. "India's oil demand is projected to rise at the fastest pace in the world to reach 5.05 million barrel per day in 2020 and expected to reach 10 million barrel per day by 2030."
Natural gas consumption is projected to increase 3 times to reach 500 million standard cubic metres per day (mmscmd) by 2030 from current 150 mmscmd. India's share in total global primary energy demand is expected to double to 11 per cent by 2040, he said.
"In the last five years, a series of transformational policy reforms have been introduced laying the path for unlocking the value of Indian hydrocarbon industry," he said highlighting a new licensing policy for oil and gas exploration as well as downstream pricing and marketing reforms.
"There is no place better than India (to invest)," he said. "Political and fiscal stability, predictable policies and huge diverse market make India a favourable investment destination for global investors."
He asked foreign companies and investors "to take note of this incredible opportunity" and invest in oil and gas exploration licensing rounds, farm-in to existing blocks or invest in oilfield equipment and services sector where $100 billion investment is required in the next 10 years.
These are besides the downstream investment opportunities in refining, petrochemical and gas business.
"Our government is exploring strategic partnerships for the overall development of the oil and gas sector," he said. "The role of the private sector for bringing in investments with necessary innovations for future energy landscape in the country will remain crucial."
Pradhan said the world is in the midst of a paradigm shift in energy supply and consumption. "Global energy transition is driven by Asia becoming the centre of energy consumption, greater availability of LNG (liquefied natural gas), a greater promise of energy independence through renewables including solar and wind energy, emergence of US as a leading hydrocarbons exporter and the urgency to meet COP 21 Paris climate commitments."
These developments, he said, are redefining the oil and gas industry.
"India, with a per-capita consumption of energy far below the world average, is redefining a new and sustainable energy mix. India is, therefore, expected to become the largest growth market for energy by mid-2020s," he said. "India, as the third-largest energy consumer, will play its rightful role."
He said India being largely import-dependent on crude oil and LNG, external developments impact significantly its consumers, who are extremely price-sensitive.
The minister said Indian companies were embracing new technologies which together with improving productivity and efficiencies could result in cost reduction of primary energy by 20-25 per cent by 2050.
"An area that calls for attention is enhanced oil recovery to reduce import dependence," he said.
"Petrochemicals offer a great opportunity to expand the downstream value chain. India's petrochemical market is expected to grow at a compound annual growth rate of 10 per cent over the next five years to reach the $100 billion mark by 2022," he said. "The industry can potentially enhance the country's growth through the development of niche products for exports and advanced integrated complexes for polymer production."