The government in New Delhi said it would look to exploit oil and natural gas reserves in a bid to become self-sufficient in energy by 2030. The government said it was looking overseas at U.S. energy advancements, and closer to home to China, for inspiration. For oil, the government expects production to increase more than 10 percent from last year. Natural gas production is in decline. "Very soon," however, the government said it would announce its own plans to usher in a shale gas revolution.
Last week, a joint venture between Cairn India and India's Oil and Natural Gas Corp. Ltd. announced the start of production at the Aishwariya field in the onshore Rajasthan block. Cairn said it expects oil production there to reach around 10,000 barrels per day, which it says would "reduce the nation's import bill."
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Indian Oil Minister Veerappa Moily said domestic crude oil production could pass 300 million barrels this year, 11 percent higher than in 2012. Much of that production should come from Rajasthan in the west of the country. He announced a series of energy targets that would reduce crude oil imports by 50 percent by 2020. The country should be able to wean itself from imports entirely and be energy independent by 2030. Oil imports have historically increased in India, but the minister said he was exploring every avenue to attain self-sufficiency.
In terms of natural gas, the minister said conventional production was about 9 percent lower than last year. There may be hope, however, in shale reserves spread throughout the country. Lagging behind China in terms of shale means it's time for New Delhi to embark on its own shale revolution, he said. China wants to get as much as 230 billion cubic feet of shale gas out of the ground by 2015 and recently held its second auction for shale gas. The Indian government said companies there may do the same with their existing blocks.
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India's economy is slowing down. Laura Papi, assistant director of the International Monetary Fund, said the government needs to take dramatic action to return to the days of 8 percent growth. Nevertheless, the economy is set for a "fairly modest recovery in 2013," she said. The Finance Ministry expects the economy to grow by as much as 6.7 percent this year, after slowing to 5 percent recently. With that growth comes more energy demands, meaning the energy minister's work may be cut out for him. With the International Energy Agency predicting a "golden age" of natural gas, it may be India's turn next to capitalize on the boom, however.
"(The government) will identify prospective areas for shale gas exploration," the energy minister said. "Very soon, we will finalize the shale gas policy, which will provide necessary impetus to the exploration activities and eventually pave way for increased domestic supplies of natural gas."
By. Daniel J. Graeber of Oilprice.com