• 5 hours UK On Track To Approve Construction of “Mini” Nuclear Reactors
  • 9 hours LNG Glut To Continue Into 2020s, IEA Says
  • 11 hours Oil Nears $52 With Record OPEC Deal Compliance
  • 14 hours Saudi Aramco CEO Affirms IPO On Track For H2 2018
  • 16 hours Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 17 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 4 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 4 days New Video Game Targets Oil Infrastructure
  • 4 days Shell Restarts Bonny Light Exports
  • 4 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 4 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 5 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 5 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 5 days Rosneft Signs $400M Deal With Kurdistan
  • 5 days Kinder Morgan Warns About Trans Mountain Delays
  • 5 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 6 days Conflicting News Spurs Doubt On Aramco IPO
  • 6 days Exxon Starts Production At New Refinery In Texas
  • 6 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 7 days China To Take 5% Of Rosneft’s Output In New Deal
  • 7 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 7 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 7 days VW Fails To Secure Critical Commodity For EVs
  • 7 days Enbridge Pipeline Expansion Finally Approved
  • 7 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 7 days OPEC Oil Deal Compliance Falls To 86%
Alt Text

Is China Overreaching In Its Global Power Play?

Xi Jinping’s ambitious plans to…

Alt Text

Kyrgyzstan Unveils Revamped Transnational Gas Pipeline

Kyrgyzstan officials and the head…

India Facing Fierce Competition in its Search for Oil and Natural Gas Resources

India Facing Fierce Competition in its Search for Oil and Natural Gas Resources

While energy-strapped India is scouring the globe for oil and gas - a bid that recently took it to Sudan and Russia where India signed two memoranda of understanding, and to Iran where it forged two agreements – the South Asian nation is also urging energy investors to its shores.

“India is thirsty for energy,” Ron Somers, president of the U.S.-India Business Council, told OilPrice.com. India, with a population of roughly 1.2 billion and a 300-million-strong middle class, is “fundamentally without hydrocarbons,” said Somers, whose organization aims to deepen two-way trade and strengthen commercial ties between the nations.

Large, cash-rich public-sector companies like the Oil and Natural Gas Corp. (ONGC) and the Indian Oil Corp. are investing outside the country but face fierce competition from Chinese and other international interests, Somers noted. “I know that India has succeeded and failed and stubbed its toes,” he conceded, adding that India began its overseas oil
acquisition activities in the last five or six years.

In December, a consortium of Indian firms signed two agreements with Iranian authorities to invest $10 billion developing gas fields and liquefaction facilities in the Islamic republic in return for a minimum of six million tons of liquefied natural gas each year. Days later, India signed a MOU to expand cooperation in Sudan’s oil and gas sector, and one with a Russian company to search for oil and gas assets in Russia and
Central Asia.

India’s energy model in the developing world, particularly in Africa and to some extent in Iran, has combined resource extraction with long-term industry development in that country or region, said Peter Pham, a senior fellow and director of the Africa Project at the New York-based National Committee on American Foreign Policy, and an associate professor of justice, political science and African studies at James Madison University
in Harrisonburg, Virginia.

With a long history in Africa, India is willing to “do value added” on the continent and integrate itself into the economy, rather than simply view Africa as “a supply depot for resources,” Pham argued. India views helping with African development as conducive to a more sustainable relationship between the two regions, he noted.

“I would say it's a hybrid model,” Pham told OilPrice.com. While Western countries largely use a strategy of private investment in Africa, Chinese and Russian models are state-driven, he said. In India’s case, however, quasi-governmental organizations known as “parastatals” work with private firms, but there is a coordinated government effort to drive investment, he explained.

At a joint India-Africa hydrocarbon conference this month, the Indian government was keen on buying more crude oil, sourcing larger volumes of liquefied natural gas, investing in more upstream opportunities, lending “skills, talent and technology” to Africa, and taking up community development programs on the continent.

African countries’ potential acceptance of the subcontinent’s oil and gas model varies, Pham argued. A democratically-accountable nation with regular, competitive elections is more likely to prefer India’s long-term engagement philosophy because “the public can see that there’s more than just resource extraction,” he said.

Pham said Guinea’s new military junta, in contrast, probably has “a shorter lifespan” and therefore was willing to sign an energy deal with China in October. “There’s no  development foreseen; it’s just simple resource exportation.”

India’s investments in Africa have not always been praised, though. The Indian government struck a MOU with Sudan recently, and India’s ONGC Videsh Ltd. has invested $2.5 billion in the oil industry there, but “furious debate” within India over the last few years has centered on whether it should be doing business with the African country at all, he said.

Outside of Africa, India’s model of energy-related development has extended to Iran. India has helped to develop Iran’s refining capacity and other aspects of the sector in exchange for entry into the natural gas market there, he said. Other countries, meanwhile, have mainly taken away energy assets.

India’s November vote to sanction Iran for its nuclear program will have “very little actual impact” on the relationship between India and Iran beyond “politically ruffled feathers,” Somers of the U.S.-India Business Council predicted.

At home, moreover, India forged deals five years ago that are now coming to fruition.

The United Kingdom’s Cairn Energy PLC scored an oil discovery in 2004 that is now under production at the rate of 180,000 barrels a day and will reduce India’s oil imports, Somers said. He said production began this year.

Reliance Industries Ltd., an Indian company, also found at least 30 trillion cubic feet of “proven, probable gas reserves” on the subcontinent and began producing this year, he added. In another 18 months, the “game-changer discovery” will start generating electricity and alter the country’s economy, he said.

In the end, these domestic oil and gas discoveries are like “a flashing green light saying we’re open for business, and that you can succeed magnificently on Indian sovereign soil,” Somers noted.

Anaylsys by. Fawzia Sheikh for OilPrice.com

Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News