After liberalisation in 1990s, India witnessed an unforeseen economic growth, which was majorly driven by demographic changes, rapid industrialisation and a robust, service-oriented business environment. Indian gross domestic production (GDP) enhanced more than 3.3 times from 2002 to 2012.
Subsequently, flourishing economy gave way to increase in the country’s energy demand which has risen by more than 70 per cent. With a humungous surge in automobiles, power and fertilisers, oil and gas (O&G) as a source of energy acknowledges more than 45 per cent of the country’s total energy consumption. As per the industry experts, India is on its way to become the third largest energy consumer in the world by 2020.
Over the last few years, Indian Government has also played a pivotal role in strengthening the core industrial sector. For instance, the introduction of the New Exploration Licensing Policy (NELP) was aimed at intensifying activities in O&G exploration, while the administration allowed 100 per cent foreign direct investment (FDI) in the sector.
India’s O&G sector is a promising one as there is a huge untapped potential basin while many large blocks offshore are unexplored. India’s total hydrocarbon reserves are projected to be around 2 billion metric tonne of Oil Equivalent (bmtoe). Also, the reserves-to-production ratio for the country works out to be 25 years with the current oil production level of around 815,000 barrels per day (bpd) and estimated reserves of 1.2 billion metric tonne (bmt). Analysts foresee a bright future for the gas sector as well wherein reserves-to-production ratio is over 30 years (the current production level being around 40 billion cubic metres [bcm] per annum on an estimated reserves base of around 1,500 bcm).
Thus, there lies a great opportunity for international and domestic companies to participate in the industry’s growth and derive benefits out of it.
India is the world's fourth-largest petroleum consumer and Crude oil production, as indicated by the core sector index, accounts for over 5 per cent of India's index of industrial production (IIP).
The country consumed 5.4 mt of diesel in July 2013, according to data compiled by the Centre for Monitoring Indian Economy (CMIE).