India/Oil & Gas

Establishing Local Upstream Industries – Trends on India's Oil and Gas Market

Page: 2/3

Related Company

Petrochemicals and Fertilizers Govern India's Gas Market

Considering the high potential demand of gas from various sectors – particularly power; fertilizers and petrochemicals and the modest expected domestic supply additions, – the gas deficit in the Indian market is expected to further balloon over the medium to longer term part of which can be catered to by increased LNG imports – while a larger portion is likely to remain unfulfilled due to high price sensitivity of certain end user sectors.

Policy environment for the exploration and production sector remains not so favourable with prevailing uncertainties on the role of the regulator in areas of pricing and allocation of hydrocarbon resources; granting of approvals and various clearances; and interpretation of the terms of the Production Sharing Contracts (PSCs) and other framework agreements.

These factors have led to a dampened investment climate, which is already facing challenges of increasing capital costs; increasing risks due to more complex and difficult geology and high operating cost pressures.

Analyst See Little Potential Shale Gas In India

Efforts on development of non-conventional hydrocarbon resources such as Coal Bed Methane (CBM) and shale gas have also been uninspiring and with various structural uncertainties still existing, these are unlikely to become major contributors to the country’s energy security in the foreseeable future.

(ID:36954700)