Green Transition? India Bets Big on Oil and Gas

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Revolutionary Oil and Gas Discovery in Pakistan

A groundbreaking discovery has recently emerged that could transform Pakistan’s economic landscape: a vast oil and gas reserve has been identified within the country’s territorial waters.
Preliminary estimates suggest that these reserves could rank as the fourth largest globally, signifying a pivotal moment for an economy long hindered by instability.

Despite the significance of this discovery, international oil companies have shown little interest.
In July, Pakistan’s Minister of Petroleum, Musadik Malik, informed a parliamentary committee that no foreign firms have expressed interest in offshore exploration within the country.
One of the main challenges lies in exorbitant security costs; companies must invest heavily in safeguarding their personnel and infrastructure in potential hydrocarbon-rich areas.

India’s Competitive Advantage

In contrast, neighboring India does not face the same security challenges, making it a more attractive option for international oil companies.
Indian Petroleum Minister, Hardeep Singh Puri, has recently urged major energy firms to ramp up oil and gas exploration in India to reduce dependence on imports and ensure a sustainable fuel supply.

Singh Puri highlighted that the country offers $100 billion worth of investment opportunities in exploration and production (E&P) by 2030.
Currently, only about 10% of India’s extensive sedimentary basin, covering 3.36 million square kilometers, has been explored.
However, a report from S&P Global Commodity Insights indicates that four largely unexplored sedimentary basins could hold up to 22 billion barrels of oil, with immense potential exceeding that of the Permian Basin, known for producing 14 billion barrels.

India’s Current Exploration Efforts

India has already made significant oil and gas discoveries in basins like Krishna-Godavari, Barmer, and Assam, but exploration in other regions remains limited.
Of particular interest are deep-water offshore areas.
This year, the Oil and Natural Gas Corporation (ONGC), an Indian state-owned company, initiated its first deep-water exploration projects in the Krishna-Godavari Basin, with plans exceeding $10 billion in investments.

Additionally, Oil India Ltd, another state company, is preparing to start exploratory activities in Nagaland, underlining the nation’s intent to enhance its hydrocarbon production capacity.
While national companies like ONGC and Oil India are active, the involvement of major international oil companies, equipped with necessary expertise, remains to be seen.

Attracting International Energy Giants

Unlike Pakistan, India appears poised to attract international energy giants.
Recently, British multinational BP held a board meeting in India seeking new investment opportunities.
BP has already entered a joint venture with Reliance Industries, one of India’s largest conglomerates, to manage 1,900 fuel stations and produce oil and gas from a deep-water block in the Krishna-Godavari Basin.

India’s Oil Demand Growth

In the future, India is expected to become a key player in the global oil demand growth.
Analysts predict that India will surpass China as the primary driver of oil demand growth in the coming years.
The rapid population increase, which may have already eclipsed China’s, is a significant contributor to this trend.
Moreover, India’s transition to electric vehicles and cleaner energy sources may take longer than in other regions, sustaining the demand for traditional fuels.

According to Fitch Solutions, China’s share of oil demand growth in emerging markets is projected to decline from 50% to 15% over the next decade, while India’s share is expected to double to 24%.
This shift, driven by demographic trends and industrial development, positions India as a crucial market for global oil companies.

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