India’s Growing Energy Demand and Production Strategies
India is rapidly emerging as a major player in the global energy landscape. According to the Energy Institute’s Statistical Review of World Energy 2024, India ranks as the third-largest energy consumer in the world. This surge in energy consumption is primarily driven by the country’s sustained economic growth, which has been fueled by industrialization, urbanization, and rising living standards. As India continues to develop its infrastructure and improve access to modern energy, the demand for energy resources, particularly crude oil and natural gas, is expected to rise significantly.
Rising Energy Consumption in India
India’s energy consumption has been on a continuous upward trajectory. The country’s economic growth over the past few years has led to increased industrial activity and urban development. This growth has also resulted in higher transportation needs and a greater demand for infrastructure development. As a result, private consumption and gross fixed capital formation have surged, further driving energy demand.
Currently, India produces approximately 13% of its oil and 53% of its gas domestically. The Exploration and Production (E&P) sector plays a crucial role in reducing the country’s reliance on imported oil and gas. In the fiscal year 2023-24, India produced 29.36 million metric tons (MMT) of crude oil, with a provisional estimate of 14.4 MMT for 2024-25. The International Energy Agency projects that by 2030, India’s demand for oil will reach 6.6 million barrels per day (mb/d), while the demand for petrol is expected to be around 1.0 mb/d. This growing demand underscores the need for India to enhance its domestic production capabilities.
Government Initiatives to Boost Domestic Production
To address the increasing energy demands, the Indian government has implemented several policies aimed at boosting domestic oil and gas production. These initiatives are designed to accelerate exploration activities and enhance the overall efficiency of the sector.
Key policies include the 2014 Policy under the Production Sharing Contract (PSC) regime, which focuses on the early monetization of hydrocarbon discoveries. The Discovered Small Field Policy introduced in 2015 aims to facilitate the development of smaller oil and gas fields. In 2016, the Hydrocarbon Exploration and Licensing Policy (HELP) was launched to streamline the licensing process and attract more investment into the sector.
Additionally, the government has introduced various measures to incentivize enhanced recovery methods for oil and gas, as well as reforms in natural gas marketing. These policies are designed to create a more favorable environment for exploration and production, ultimately reducing India’s dependence on imported energy resources.
Investments in Exploration and Data Acquisition
The Indian government is making significant investments in exploration and data acquisition to enhance its energy production capabilities. Approximately ₹7,500 crore is being allocated for the acquisition of seismic data in both onshore and offshore areas. This investment aims to provide quality data on Indian sedimentary basins, making it easier for bidders to assess potential exploration sites.
Furthermore, the government has approved the acquisition of additional 2D seismic data, covering 20,000 line kilometers (LKM) on land and 30,000 LKM offshore, beyond India’s Exclusive Economic Zone (EEZ). This comprehensive data collection effort is expected to improve the understanding of India’s hydrocarbon potential and attract more investment into the sector.
In addition to these initiatives, the government has also released around 1 million square kilometers of ‘No-Go’ areas in offshore regions that had been blocked for exploration for decades. This move is anticipated to open up new opportunities for exploration and production, further bolstering India’s energy security.
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