<div>The Ministry of Petroleum and Natural Gas is preparing a roadmap for reducing the country’s dependence on crude oil imports. Veerappa Moily, the Union Minister for Petroleum and Natural Gas promised to bring down crude oil imports to 50 per cent of the country’s requirement by 2016-17 from the current 80 per cent at a function organised by the Kanara Chamber of Commerce and Industry (KCCI) in Mangalore recently.<br /> </div><div>While confirming the news, ministry officials said the background work had already begun and all the stakeholders were being involved. The push to increase domestic oil output will involve looking at all possible measures — shale gas exploration, raising production from coal bed methane (CBM) blocks and acquisition of oil assets abroad.</div><table cellspacing="5" cellpadding="5" border="0" align="right" width="100"><tbody><tr><td><span style="color: rgb(255, 0, 0);"><strong>172.11 MMT — the provisional crude oil imports in 2011-12</strong></span></td></tr></tbody></table><div><br />In a bid to increase domestic production, the ministry has given an in-principle nod to Coal India for the extraction of CBM from the coal blocks operated by it. Four rounds of CBM bidding have already taken place with seven blocks offered in the fourth round. The estimated CBM resources of these seven blocks are about 330 billion cubic meters with expected production potential of 9 MMSCMD.<br /> </div><div>The tenth round of the NELP (New Exploration and Licensing Policy) is expected to take place in 2013. With the government focussing on quality over quantity, the number of blocks to be awarded are expected to be lesser this time, say ministry sources. Since 1997, when the NELP was first launched, nine rounds have been concluded bringing down the unexplored and poorly explored areas from 58 per cent in 1998-99 to 34 per cent in 2010-11.<br /> </div><div>In addition, government-backed companies are moving towards acquiring oil assets abroad and the total investments made by various PSUs for acquisition of assets overseas stood at Rs 64,832.35 crore on 30 June 2011.<br /> </div><div>Will all these efforts help in bringing down imports substantially? Unlikely, say experts. “It will be difficult to define a substantial quantum but the country will need at least 15 years before it can make any real progress in increasing the domestic crude oil production,” says Deepak Mahurkar, leader of oil and gas at PwC.</div><table cellspacing="5" cellpadding="5" border="0" align="right" width="200"><tbody><tr><td><span style="color: rgb(0, 0, 128);"><strong>STEPS AHEAD</strong></span><br /> <ul><li><span style="color: rgb(255, 0, 0);"><strong>Greater domestic exploration activities</strong></span></li><li><span style="color: rgb(255, 0, 0);"><strong> Shale gas exploration</strong></span></li><li><span style="color: rgb(255, 0, 0);"><strong> Acquisition of overseas oil assets</strong></span></li><li><span style="color: rgb(255, 0, 0);"><strong> Increasing production from coal bed methane blocks</strong></span></li></ul></td></tr></tbody></table><div><br />It is estimated that crude oil imports will rise to 90 per cent of the country’s requirement by 2030.<br /> <br />According to a report by PwC, India’s oil trade deficit has risen drastically over the years and currently accounts for around 54 per cent of the country’s total trade deficit. Resultant to that, the drawdown of foreign exchange was to the tune of $12.8 billion in 2011-12. India is the sixth largest consumer of crude oil globally and its primary energy needs stood at 559 Mtoe (million tonnes of oil equivalent) in 2011 and is estimated to increase to 1464 Mtoe by 2035 as per the International Energy Agency. <br /> </div><div>The provisional crude oil imports stood at 172.11 million metric tonnes (MMT) in 2011-12, an increase of 5 per cent over 163.59 MMT in 2010-11. Meanwhile, the contribution of domestic crude has progressively fallen from 26.68 per cent in 2002-03 to 16.45 per cent in 2011-12 (provisional figures). <br /><br /><span style="color: rgb(34, 34, 34); font-family: arial, sans-serif; font-size: 13px; line-height: normal;">(This story was published in Businessworld Issue Dated 24-12-2012)</span><br /><br /> </div>
