India: Oil Market The Import–Gap Widens for India's Oil Market
India's cdoemstic oil production is more and more inssuficient to cater the local demand, US institutions believe. Now the country has purchased stakes in global oil and gas fields to reduce its dependency on foreign imports.
According to the US Energy Information Administration (EIA), India held nearly 5.7 billion barrels of proved oil reserves at the beginning of 2014, mostly in the western part of the country. India was the fourth-largest consumer of oil and petroleum products after the US, China and Japan in 2013, and it was also the fourth-largest net importer of crude oil and petroleum products.
The gap between India’s oil demand and supply is widening, as demand reached nearly 3.7 million barrels per day (bbl/d) in 2013 compared to less than 1 million bbl/d of total liquids production. EIA projects India’s demand will more than double to 8.2 million bbl/d by 2040, while domestic production will remain relatively flat, hovering around 1 million bbl/d. The high degree of dependence on imported crude oil has led Indian energy companies to diversify their supply sources.
To this end, Indian national oil companies (NOCs) have purchased equity stakes in overseas oil and gas fields in South America, Africa, Southeast Asia and the Caspian Sea region to acquire reserves and production capability. However, the majority of imports continue to come from the Middle East, where Indian companies have little direct access to investment.