Step on the gas - Times of India

The ninth round of oil and gas exploration acreage auctions under the government's New Exploration Licensing Policy (NELP) has hardly boosted confidence all round. Out of the 34 blocks that were on offer 33 might have been bid for, but in this instance, the facts obscure the reality. There was little interest from foreign majors - something the Indian energy sector requires urgently - and domestic PSUs grabbed the lion's share. It's nothing new, merely the latest iteration of a trend that has been established over previous NELP licensing rounds. Given the need for the latest technology and knowhow to explore and exploit untapped hydrocarbon reserves, it's a trend that must be reversed.

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The dichotomy between India's energy needs and its output is stark. Currently, it is the fifth-largest energy consumer in the world - and that's with a per capita energy consumption that's just about a quarter of the global average. Calculate the potential per capita increase from such a low base as the benefits of growth trickle down to socio-economically disadvantaged sections, factor in the added demand as the manufacturing base expands, and it's apparent that India will be lucky to maintain its current 70-30 split between imported and domestic crude in the decade or two to come. As it stands now, only a fraction of India's 26 sedimentary basins - with a total area of 3.14 million square km - has been explored. And the gap between rate of growth of demand and of domestic supply when it comes to both crude oil and natural gas has been growing. The entire purpose of the NELP, instituted in 1999, was to circumvent the problem and bring in the billions of dollars in foreign investment required for increasing the extraction and production base by offering attractive terms to private investors, putting in place transparent bidding procedures and creating a level playing field with regard to the PSUs. The massive Reliance Industries-BP $7.2 billion deal points to the sector's potential. With the current instability in North Africa and the Middle East , India ought to offer a stable, attractive option for foreign players.

Step on the gas - Times of India