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    Indian Hydrocarbon Sector

    Energy   sector   in  India  has  come  a  long  way   since first  commercial discovery of crude oil in   Digboi   Assam in  1889. However,  comparing Indian  energy  sector   with   energy  sector   from  other  major  countries  such as  United  States,  Russia,  and  China   we  can  clearly observe   that  Indian  sector  is   still  lagging behind.

    Although  some  major  discoveries  have  been  made  in  several  basin  of  India, yet  they  are  able  to meet  slightly more than  20 per cent  of  India‚Äôs  current  crude  oil  requirement only.   Comparing   this   with  United States  and  China  we  see  they  are  able  to  meet  approximately   50  per cent  of  their  requirements by internal production.  To  improve this situation  Indian  government  pushed   domestic public  sector  undertaking  such  as  ONGC  Videsh  limited  (OVL)  to get  stakes   in  producing   or  high  potential oil and  gas   field  outside  India. But the result was   not as    planned. The main reason  of this was  unstable  Geo-political  situation   in  countries  where  acreages   were  acquired such  as  Iran,  Sudan,  Syria  and  Iraq  etc.  Due to   geopolitical   instability and lack of security, contracts were  hard  to enforce. Moreover, there was always a big  possibility of  change  in  government   policies  as  a  result  of  sudden  change   in  political   regime   in  those   countries.

    Hydrocarbon exploration  in India and  growth  of  domestic  energy  sector  of  India  was  charming on  paper  but without  any  major  success. However, a few exceptions were there. Even  among  the  proved   reservoirs,  testing has  showed   that  they  are  not  easy   to  produce. Further  Indian government  bid  to  attract major  multinational  oil  companies   have  proved  futile   due  to  lack  of  their  interest  in  Indian  energy  sector, as   a result   attempt  to  increase  hydrocarbon  production  in India  did  not  get  any  major success.

    This  shows  that  Indian  companies need   to  re-look  and  re-plan their  strategy   and  focus  on  areas   where  we  are  lagging   behind. One such area of improvement   is hydrocarbon recovery factor. In Indian fields recovery sector is generally less than 30  per cent. However, the global standard   is 40 per cent or above. Indian companies should focus on enhanced oil recovery and improved   oil recovery   techniques.

    Moreover, Indian hydrocarbon sector needs a good mix of small and large firms. As  a  case  study  if  we  look at  success  of  petroleum   industry  in  United States   we  can  easily  deduce   that   success  lies  in   presence of  both   small  and  large  firms  as  large  firms  are  willing  to  spend money on  latest technology   whereas   small  firms   like  to  take   more  risk.

    Currently, Indian energy    sector is regulated    by Directorate General   of hydrocarbon (DGH). It is suggested that officers of  DGH should    re-look  and  re-plan their  strategy   in  order  to bring much needed changes in Indian  petroleum sector.