PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Energy/Environment/Clean Technology
68% in 2005–06. The Center for Strategic and International Studies sees the import share rising to
91% by 2025. The U.S. Department of Energy and the International Energy Agency forecast that
India’s oil consumption will more than double from 2.5 million barrels per day (bpd) to 5.3 million
by 2025, nearly all of it imported. (Indian government projections for 2025 are 500,000 to 1 million
bpd higher.)
India Crude Oil Sector Profile 2002–2008, in Millions of Metric Tons (MMT)
(provisional)
2002 2003 2004 2005 2006 2007–08
Reserves 741 733 739 786 756 725
Consumption 112.56 121.84 127.42 130.11 146.55 156.10
Production 33.04 33.37 33.98 32.19 33.99 34.12
Imports 81.99 90.43 95.86 99.41 111.50 121.67
Exports 10.29 14.62 18.21 21.51 33.62 39.33
of crude oil and refined petroleum products
Source: Ministry of Petroleum & Natural Gas
Only about a third of the country’s 26 sedimentary basins have been developed, suggesting that
much of India’s reserves remain untouched. Still, at generally accepted rates of demand growth,
India’s domestic crude oil supplies are forecast to last only about 40 years.
Beginning in the 1990s, demand began to rise dramatically relative to production, but the national
oil companies (NOCs) lacked the technology or expertise to identify and tap significant
potential reserves. The New Exploration Licensing Policy (NELP), launched in 1997, allowed
foreign and private domestic firms to bid for exploration blocks on a level playing field with the
NOCs. Six NELP bidding rounds already completed put 162 blocks out to bid, attracting $8 billion
in new private and joint venture investment and resulting in 49 discoveries in 15 blocks since
1999. A seventh round launched in 2008 offered another 57 blocks—19 in deep water, 9 in
shallow water and 29 on land. NELP auctions have so far brought 20 foreign firms into the
Indian oil market, most notably deepwater drillers like StatoilHydro, Petrobras, Cairn Energy,
and Eni. Reliance Industries has become a major private domestic player. In all, more than 100
NELP exploration and development contracts are in effect.
Private refinery capacity has increased significantly in recent years, accounting for 26% of total
capacity. However, most of this output is for export, due to domestic retail price controls and
government-mandated pricing parity for domestic and imported oil products.
Indian public and private sector firms are also expanding their global reach in search of petroleum.
They have tended to pursue interests in oilfield locations where competition from the
177