India - Emerging Opportunities & Challenges in the Oil & Gas Sector

Indian energy consumption is majorly driven by fossil fuels and oil & gas are one of the major resources in energy-mix. A major part of these resources is from imports and it is witnessed that India imports 80% of its crude oil. Hence, this provides enormous opportunity for investors to develop this sector to meet the rising demand scenario. Nevertheless, challenges such as stagnant domestic production, slacking government policies, regulations, lack of intense participation from foreign and private oil & gas players are likely to hamper the growth to an extent. Opportunities in the Sector:- 1) Lack of technology drives foreign players to invest in India India?s prime agenda in the near future would be securing supplies. In India, spurt of exploration activities have already taken place in the shallow basins and onshore assets, it is believed that ultra-deep-water and deep-water oil & gas resources would play a vital role in increasing the domestic production. However, Indian companies, especially the PSUs (Public Sector Units) have limited technical and monetary experience to perform exploration and development activities. This provides an opportunity for strategic investors, who have technical expertise and are financially strong (like BP) to invest in the country through partnerships with the public and private sector companies. 2) Partnerships and transactions assets abroad ? India is facing a fierce competition from countries like China, while acquiring assets abroad. India must raise the level of investments and their strategies while negotiating, so that it can impose a challenge to other countries.