With oil prices below US$100, time is perhaps opportune for entering into long term crude oil contracts and strategically acquiring oil acreages overseas. Although the price of crude oil has increased almost 100% since February 2009 and has reached US$70 a barrel, CII has recommended that there however still exists a window of opportunity to acquire international oil acreage and to secure long term oil supply deals to secure India's energy future at an affordable price.
The accelerated demand for energy makes it imperative for India to garner assured and continuous supply of energy at reasonable prices through internal efforts and acquiring international acreages. As per CII estimates, in a business-as-usual 8% GDP growth rate scenario, the demand of Oil would be 328 Mtoe by 2030, an increase of 3.8% year-on-year.
Indian private sector has the capability and the capacity developed for both upstream and downstream activities. NELP on the other hand, has brought in new league of domestic companies to oil exploration, production and refining activities. Similarly India today has achieved significant capacity in exports of refined petroleum products, exporting 39 million tones in 2007-08.
In the above backdrop CII has emphasised that the Industry, both in the public and private sector, should collaborate to secure oil equity overseas. The Government on their part must facilitate and encourage such partnerships & aggressively pursue the strategy of acquiring overseas oil and gas assets.
Source: CII
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