The renewed interest shown by international oil and gas majors in India’s exploration & production (E&P) sector is expected to have a limited impact as these firms are reducing investments in the sector, S&P Global Commodity Insights has said.

The agency in its latest analysis on India’s energy transition, released earlier this month, pointed out that as several companies are divesting their interest in oil and gas assets, Indian oil and gas PSUs can pool their resources and jointly acquire such assets.

Domestic exploration has yielded mixed results over the last decade with no new major discoveries, the analysis report, prepared by S&P Global Commodity Insights Chief Energy Strategist Atul Arya and Executive Director, Energy Transitions and Clean Tech Consulting Gauri Jauhar, said.

The government has renewed its interest in boosting domestic production of oil and gas in the country as it aims to check dependence on imports for meeting domestic demand.

The BP Energy Outlook and International Energy Agency (IEA) estimate that India’s energy demand would grow at about 3 per cent per annum till 2040, against the global rate of 1 per cent. Besides, India is likely to account for around 25 per cent of the global energy demand growth between 2020-2040.

Limited impact

“Renewed interest in India from international oil and gas companies is likely to have limited impact because these companies are reducing oil/gas investments while transitioning to a broader fuel mix,” the analysis pointed out.

Still, there is potential to boost output at Indian oil and gas fields using secondary and tertiary recovery technologies. Average recovery factors in India are 20-30 per cent compared with global averages of 35-40 per cent, it added.

The report emphasised that application of new technologies, including digital, machine learning and data analytics, offers further impetus to focus on improving recovery factors. High oil prices are another incentive for increasing domestic oil and gas production.

The report pointed out that many oil and gas companies around the world are divesting oil and gas assets and focusing on energy transition to meet net-zero targets.

“Indian public sector oil/gas companies can pool resources and jointly bid for these assets. They can also partner with strategic international investors that want to access India’s growing domestic energy market. Greater ownership of foreign oil/gas supplies will ensure energy security for India and help in managing price volatility,” it suggested.

India’s energy transition reflects its robust economic growth, with a fast-expanding middle class and rapid urbanisation, S&P Global Commodity Insights said adding that the total primary energy demand more than doubled from 2000 to 2020, surging to 937 million tons of oil equivalent (Mtoe) from 417 Mtoe.

Still, India’s energy consumption per capita is less than 1/10th of the US’s. How India meets its growing energy demand and changes its primary energy mix over the coming decade will substantially influence global energy markets and help determine if, and when, global emissions targets are reached, it added.

E&P activity

Ministry of Petroleum & Natural Gas (MoPNG) has signed a total of 311 production sharing contracts (PSC) involving 29 discovered fields, which includes one PSC signed for Panna & Mukta fields and 28 blocks under pre-NELP exploration blocks as well as 254 under the NELP regime with national oil companies and Private (both Indian and Foreign)/ Joint Venture companies.

Also, thirty Revenue Sharing Contracts (RSCs) have been inked under DSF (Discovered Small Field)-2016 involving 30 Contract Areas.

Since 2017, seven Open Acreage Licensing Policy (OALP) rounds have been successfully concluded with the award of 134 exploration blocks covering 2,07,691 sq. km. area for E&P activities.

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