India, Crude Oil, and Import Dependence
The Republic of India has been increasingly reliant on oil imports since 2014. It imported 78.3% of its crude in FY 2015. By FY 2019 that was 83.8%.
The IEA projects that India's dependence on imports will continue to rise through 2025. Indeed, it will rise at twice the pace at which the IEA expects China’s importation will rise.
Nonetheless, even in absolute terms the amount of domestic crude oil production in India has been falling. It was close to 720 thousand barrels a day in 2017. Then it was 695.619 in 2018. Final numbers are not available for 2019, but the rates of domestic production continued to decline through most of the year.
Now, cutting the continuing reliance on foreign oil is a major policy goal for India.
Reducing Dependence on Imports
What is the government going to do to limit dependence on imports, especially imports from insecure sources? It is moving in three different but compatible directions. First, it is shifting its sourcing: importing from more secure exporters. The United States has only recently become one of the main exporters of crude to India. Second, India is working on alternative sources of energy, both cleaner-carbon sources and non-carbon sources. Third, it is working to increase its domestic production of oil.
As to alternatives, the present policy is to promote solar energy and to seek World Bank assistance in implementing an ambitious international electrical grid. The idea behind this policy is that India will employ solar for electricity not only to displace some of its need for hydrocarbons but to give it a resource for export. It will export electricity through the multinational grid to other south Asian nations: including Myanmar, Thailand, Cambodia, etc. and perhaps an even greater challenge, through an undersea link to Oman. India has even pitched an International Solar Alliance (ISA) as a counterweight to OPEC.
India projects that it will add 100 gigawatts of solar capacity within the next three years, a sizable share of that coming from rooftop projects.
India’s offshore and onshore oil
The month by month numbers on the country’s crude oil production show a steady decline through late 2018 and most of 2019, but with a tick up in October, the last month for which data is available.
The government owns the Oil and Natural Gas Corporation (ONGC), which has underway a deep-water oil and gas project expected to begin producing this year, and in time to hit a peak production of 78 thousand barrels a day.
Most of the onshore production comes from three states, Assam, Gujarat, and Rajasthan. Of these, it is Rajasthan (in the northwest, near New Delhi) which looks most promising for new discoveries.
And although the government now allows 100% foreign direct investment in natural gas, petroleum, and refineries, it isn’t solely foreign investors who are attracted to these targets. Reliance Industries Ltd (RIL), the Mumbai headquartered concern that, according to Forbes, is the 71st largest publicly owned corporation in the world, is invested in this space, as is Cairn India, the Gurgaon headquartered concern that has been a subsidiary of Vedanta Resources for a decade now.
The geology is certainly promising. The deposits of hydrocarbons beneath India is a subject of continuing discussion in the geological literature, as for example in the latest issue of Earth and Planetary Science Letters.