India is the fourth-largest consumer of oil and petroleum products in the world. Its energy demand is expected to reach 1,464 million tonnes of oil equivalent (MTOE) by 2035 from 559 MTOE in 2011. Moreover, the country’s share in global primary energy consumption is expected to increase two-fold by 2035.
Oil consumption is estimated to reach 4 million barrels per day (MBPD) by FY 16, expanding at a compound annual growth rate (CAGR) of 3.2 per cent during FY 08–FY 16. In FY 13, imports accounted for approximately 80 per cent of the country’s total oil demand. Also, backed by new oil fields, domestic oil output is anticipated to grow to 1 mbpd by FY 16.
The government’s supportive foreign domestic investment (FDI) policies and promotion of investments have helped the sector grow. The Centre has introduced policies such as Coal Bed Methane (CBM) and New Exploration Licensing Policy (NELP). Backed by this support, the sector garnered FDI worth US$ 5.4 billion during the period April 2000–September 2013.
India offers abundant skilled labour at much competitive wages compared to other countries. The University of Petroleum and Energy Studies in Dehradun, Uttarakhand, is Asia’s first and only energy university. Further, several domestic companies have reportedly found natural gas in deep waters. Taking all this into account, there is significant expansion opportunity for the sector in the coming decade.