India’s growth aspirations are inextricably linked to the availability of energy. Finding energy for 1.2 billion people is a tremendous challenge. With total energy imports accounting for 40% of supplies, India’s net energy import bill of around $180 billion per annum continues to put pressure on the economy. Reducing our dependence on imports and growing domestic energy production will be a key parameter to the new government’s success.
Domestic exploration & production (E&P) and energy efficiency will need to play a very crucial role if our dependence on energy imports is to be decreased. The sector needs a big shot in the arm to attract high-risk investments, bring back foreign players who have left or about to leave and attract technology and skills to increase exploration and production activity which will ultimately result in higher domestic production. For example, as per Indian and international geologic estimates, India has the potential of 100 trillion cubic feet (tcf) of ‘yet to find’ gas resources—this can literally turn the tables on the current situation of energy deficit in the country. Only 22% of the oil and gas basins have been explored. In terms of avoidable energy imports, the value of this potential domestic resource exceeds $1.5 trillion at today’s LNG import price—an immense prize which can be delivered by an enabling policy framework focussed on encouraging E&P activity. India needs to support and unshackle its E&P sector to step up and participate in this very risky business! This is a business where there are more companies that fail than those that succeed. Track record in the Indian basins are 1 to 2 discoveries in every 8-10 wells drilled.
Though it may sound strange, the overarching goals of the government and the industry are completely aligned as partners in the production sharing contract in terms of increasing production and maximising value of the natural resources to the nation. The main focus for the petroleum and natural gas ministry today should be around framing policy initiatives to encourage any and every activity that allows production of every drop of oil and every molecule of gas and in building the trust between the government and the E&P companies. It is important to remember that this is an association for decades once oil or gas is found, where the industry is investing multi-billions in the near-term for production over the long-term. This is repeated across the globe and