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Energy: Investments needed in E&P

Sep 12, 2000

ONGC has recently announced plans to revamp its Bombay High rig. The restructuring plan has been developed by a foreign consultant. The plan envisages an investment of Rs 30 bn for improving the recovery rate from the oil well. Initiatives for increasing domestic production of this energy resource is a must, as consumption is growing at a faster clip due to the on going economic development. Domestic production has stagnated over the last five years and the increased demand has been met through imports.

Production needs a boost
Oil Production (m tonnes) FY95 FY96 FY97 FY98 FY99 CAGR
India 37.1 36.2 37.1 36.4 36.2 -0.6%
World 3,272.0 3,370.9 3,468.5 3,533.1 3,452.2 1.4%

Imports for FY01 are expected to be 70 m tonnes, twice the domestic production. The increasing imports along with the strong crude prices have adversely impacted India's current account deficit.

India's proven reserves stand at 600 m tonnes. At current consumption rate the reserves have a life of 17 years. New technology in exploration and production (E&P) will help increase the recovery rate and boost production. However, newer fields will have to be explored to increase the reserve base of the country.

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