• OCTOBER 16, 2000

Energy - Is it too late?

Crude oil prices have once again soared to touch new ten year highs of $ 35.5 / barrel on Thursday. The latest increase will continue to keep India's balance of payments on tenterhooks.

India's oil production over the past five years has stagnated at 32 m tonnes per annum (MTPA). However, in the same period its consumption has increased from 77.9 MTPA to 99.4 MTPA. Consequently, the shortfall has been bridged by imports.

Crude oil imports have risen from 27.3 MTPA to 57.9 MTPA. With production stagnating India's exposure to international oil markets has increased making it more susceptible to the oil shocks.

India's oil misery…
Reserves bn barrels 4.0
Production m barrels/year 235.84
R/P ratio years 17.0
Exp. Imports m barrels/year 501.2
Exp. Oil import bill Rs bn 545.0

To counter the threat of oil shocks, Oil and Natural Gas Corporation (ONGC) has embarked on a programme to accelerate the annual production of crude. It plans to increase the production by 500,000 MTPA with immediate effect. Of the planned increase 350,000 MTPA will be pumped from the Southern and Northeastern region.

ONGC's major initiative is an oil recovery programme, which proposes to hike up production by 22.7 MTPA over the next ten years. India's dependence or the opposite will depend on the success of ONGC's exploration initiatives.

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