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’s 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.