O&G Rs.1.2 lakh crore CAPEX for 8,363 projects/economic activities
The five-pronged strategy to reduce crude oil import dependency including increasing domestic oil and gas production, promoting biofuels and renewables, energy conservation and energy efficiency, improvement in refinery processes and demand substitution, is making an impact.
This update was given by Petroleum and Natural Gas Minister Dharmendra Pradhan in a keynote address at the ‘GCTC Energy Security Conference 2020’, organized by Global Counter Terrorism Council, on 29 Sept 2020.
“In the past, energy security has been seen in a narrow approach, mainly aimed at managing supply. Our government has widened the scope of energy security by making it much more inclusive, and taking into account geopolitical, economic, social and environmental dimensions,” he said.
India’s energy diplomacy and its alignment with foreign policy over the last six years has delivered tangible and substantive results.
“We have enhanced our engagement with key global energy players, and firmed up of strategic and comprehensive energy engagements with producing countries such Russia, US, Saudi Arabia and UAE on hand, and close engagement with consuming countries such as Japan and South Korea.”
“It is imperative that we position ourselves well to handle the current energy challenges to be able to develop our strategies in the post-Covid-19 world,” he said.
India, as the world’s third-largest consumer of energy, has not only been impacted but also could potentially define the way how global energy trends would emerge.
The country’s energy sector particularly Oil & Gas sector was affected significantly in the initial stages of Covid-19 until May 2020.
“We are already witnessing the significant restoration of consumption of several of the petroleum products to pre-Covid levels since July onwards,” said Pradhan.
The minister said that the oil & gas sector PSUs alone will have CAPEX spending Rs.1.2 lakh crore in 8,363 projects/economic activities during the current financial year, and other ministries in the energy sector also have similar ambitious CAPEX spending projects, to help boost employment and economic growth, he shared.
India’s energy sector has shown greater resilience in the face of the COVID-19 pandemic with supplies holding up admirably, despite the global turmoil in financial and commodity markets.
Talking about the need to overcome energy poverty, Pradhan said that with over 16% of the global population, “we are currently using only 6% of the world’s primary energy”.
He stressed on the need to develop reliable and compatible energy infrastructure in the country.
With the per capita consumption of energy still one-third of the global average, India will have to continue to develop all possible energy sources to meet this energy deficit, while fully cognizant of the sustainability dimensions of it.
“The energy landscape in India is evolving like never before. Our Government is also taking a constant reality check on the undercurrent of energy transition that is underway in the country”, he disclosed.
Pradhan said that India has shown greater resilience in economic, financial, regulatory and infrastructure terms, for an effective energy transition.
He referred to the findings of the World Economic Forum, listing India among the select countries making consistent and measurable progress on energy transition over the past six years.
“Suffice to say that at the height of geo-political tensions in the Middle East and country-specific restrictions on crude exports during the last year, we had sufficient supplies of crude oil & LNG.
“It is as a result of our policy of diversification of sources of hydrocarbons pursued over the last six years.”
The Indian oil marketing companies are now importing crude oil from over 30 countries, including from Africa, North and South Americas as well as Southeast Asia. New long-term contracts have been entered into by the companies with their counterparts in the US, Russia and Angola.
LNG imports have also been diversified from traditional supplier Qatar to the US, Australia and Russia, he informed.
“Taking the advantage of low crude oil prices in April and May 2020, we filled the existing strategic petroleum reserves with 16 million barrels of crude oil, resulting in saving of over Rs.5,000 crore for the Government”, he disclosed.
Talking about further improving energy security in the hydrocarbons sector Pradhan said that India is gradually improving crude and petroleum product storage capacity from the existing 74 days of national consumption to 90 days.
He invited the participation of companies in the development of 6.5 MMT of crude storage capacities at Chandikol and Padur in the next commercial-cum-strategic reserve programme.
“We are also exploring overseas crude storage facilities in the US and other commercially viable locations”, he said.
To promote oil and gas production at the domestic level, reinvigorating policy reforms are already underway–be it Hydrocarbon Exploration and Licensing Policy (HELP), Discovered Small Field (DSF) Policy, Open Acreage Licensing Policy (OALP), and exploitation of Unconventional Hydrocarbons.
The Minister talked about policy reforms including shifting of focus from ‘Revenue’ to ‘Production’’ maximization, marketing including pricing freedom for the gas from difficult Areas, and for new discoveries from March last year, as well as for CBM Gas.
“We are also actively prompting participation of global oil majors to increase their domestic oil & gas exploration”.
‘We are developing alternative fuels as the next wave of transformative change with ethanol, second-generation ethanol, compressed biogas (CBG) and biodiesel in helping to reduce the country’s import dependence.
“Oil Marketing Companies are in the process of setting up twelve 2G bio- refineries with an investment of Rs.14,000 crores. We are well on our way to meet the target of 20% blending of ethanol in petrol and 5% blending of bio-diesel in diesel by 2030.”
The Government’s focus on a gas-based economy is to be achieved by promoting free gas markets in synchronization with the creation of gas infrastructure for increasing gas share in the primary energy mix to 15% by 2030.
An estimated investment of US$60 billion is lined up in developing gas infrastructure which includes pipelines, city gas distribution and LNG re-gasification terminals.
India’s first automated national-level gas trading platform has been launched to promote and sustain an efficient and robust gas market and foster gas trading in the country.
“Our quest for energy security will work under the framework of four ‘A’s: availability, accessibility, affordability and acceptability, which is to make energy accessible to all the sections and sectors at an affordable price,” he said. #enery #investment #production #processing #refining #OPEC #IEA #gas #renewables /fiinews.com
