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World Energy Outlook 2007

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Figure 15.1: India's Fossil Fuel Production and Imports, 2005<br />

240<br />

200<br />

160<br />

36 Mtce<br />

12%<br />

Mtoe<br />

120<br />

80<br />

262<br />

Mtce 1.8<br />

mb/d<br />

70%<br />

40<br />

0<br />

0.8<br />

mb/d<br />

6 bcm<br />

29 bcm<br />

Coal Oil Gas<br />

17%<br />

Production<br />

Imports<br />

% import dependence<br />

Imports of LNG, which started in 2004 from Qatar, are set to grow strongly in<br />

the coming years as new terminals are built. India's proven reserves of natural<br />

gas amounted to 1 100 bcm at the end of 2006 (Cedigaz, <strong>2007</strong>). Prospects for<br />

expanding domestic production are good after a recent major discovery in the<br />

Krishna-Godavari basin and recent announcements regarding gas pricing<br />

(see Spotlight below).<br />

India's energy sector is dominated by state-owned companies. Coal India produces<br />

84% of domestic coal and employs some 450 000 workers, making it the secondlargest<br />

national employer, after the railways industry. Singareni Collieries, a joint<br />

undertaking between the central government and the Andhra Pradesh state,<br />

accounts for another 9% of production. The remaining 7% is shared between<br />

domestic private-sector companies whose production is used exclusively for their<br />

own purposes. The coal industry is the only key energy sub-sector that has not seen<br />

any fundamental restructuring of its legal and organisational structure in over<br />

30 years. The foreign stake in coal mining remains small, despite the opening-up of<br />

the industry to private investment in captive 5 mining projects in 1993. A coal-sector<br />

reform bill has been pending since 2000.<br />

By contrast, the private sector is playing an increasingly important role in the<br />

oil and gas sectors, following reforms launched in the early 1990s (see below),<br />

even though public companies still dominate. The state-owned Oil and<br />

Natural Gas Corporation (ONGC) and Oil India Limited (OIL) are the<br />

5. Captive mining projects are only able to supply coal to an associated project, e.g. steel plant,<br />

cement works or power station. The Indian government does not allow these projects to sell coal in<br />

the market.<br />

446 <strong>World</strong> <strong>Energy</strong> <strong>Outlook</strong> <strong>2007</strong> - INDIA’S ENERGY PROSPECTS

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