World Energy Outlook 2007

These reforms have achieved their objective (Table 15.2). For example, privatesector
or public-private joint ventures now control 14% of oil exploration and
production and more than one-fifth of natural gas production. In 2005, more
than one-quarter of India's installed refining capacity was privately owned.
Private companies marketed 14% of petroleum products; prior to reform, their
market share was nil.
Table 15.2: Private Participation in India's Energy Sector, 2005
Ownership
Public (%) Private (%)
Electricity
Generation* 76 24
Transmission 100 0
Distribution and end-user supply 87 13
Trade 93 7
Oil and gas
Crude oil exploration and production 86 14
Natural gas production 77 23
Oil refining 74 26
Marketing 86 14
Coal
Exploration, production and marketing 93 7**
* Includes industrial autoproducers.
** Includes captive mines.
Note: The first public-private partnership in transmission became operational in 2007 (see Box 15.3).
Source: The Energy and Resources Institute of India.
Foreign investment in the coal sector has been allowed since 1993, but only
with approval from the Foreign Investment Promotion Board in cases where
a foreign investor takes a controlling equity interest. Foreign companies are
allowed to invest in captive coal mining on a case-by-case basis and up to a
maximum of 50% of equity. The Indian government has considered the
introduction of competitive bidding for coal blocks, but legal constraints in
the 1973 Coal Mines Nationalisation Act rule this out. A major failing of the
attempt to attract private investment is that Coal India still plays a role in
identifying blocks for private participation and naturally retains the best
prospects for itself. Without the possibility of selling into a free market
454 World Energy Outlook 2007 - INDIA’S ENERGY PROSPECTS