Moscow
Honorable Energy Ministers
Excellencies, Ladies and Gentlemen
I thank the presidency of G-8, Russia and H.E Mr. Putin, the chair, for having invited India to this Energy Ministers meeting in Moscow.
I feel privileged to address this gathering of Energy Ministers at a time when global energy security along with education and the fight against infectious disease have been singled out as the priority agendas.
India cradling a sixth of world’s human resources is not only its sixth largest consumer of energy but has also embarked upon a high growth trajectory. The GDP growth rates is projected to be 8% this year, and expected to climb even higher in the future. Even with a present per capita primary consumption of energy in India at one third the world average, our total primary energy requirements are close to 500 million tons of oil equivalent per annum. These may indeed go up to 1.8 billion tonnes of oil equivalent by 2030.
Commercial energy sources contribute nearly 70% of the primary energy requirements of India. The rural households still use considerable quantities of traditional fuels like bio-mass and fuel wood. With a large coal reserve of 92.5 billion tons coal accounts for a 54% share in the energy mix, and is the main source of energy. Nearly 78% of the coal production is used for power generation. Oil and gas account for a 40 % share in the energy mix and the rest is shared by hydro and nuclear sources.
India currently has reserves of about 1.6 billion tonnes of oil and gas of which domestic production accounts for 25%. The demand for oil is expected to increase to around 7.5 million barrels from the current level of 2.6 million barrels per day per day, by 2030. The energy challenge to economic growth is clearly visible and India recognizes the role it has to play in meeting it.
The energy demand pressures of vibrant economic growth in the developing world, particularly in countries like India, China and Brazil, and that from the world as a whole, are reverberating globally. With the vast majority of the global population spread in marginal or emerging economies, the challenges of energy demand and its affordability become fundamental to the quality of life. We need to collectively take-up this challenge and initiate programs and policies that can assure secure and sustainable growth globally.
For the last few years India has pro-actively initiated policies and regulations to promote larger public-private participation in the energy sector. New power generation capacities are being introduced and a capacity of 20,000 Mega Watts shall be added during 2005-07. India has a hydroelectric potential of 150,000 Mega watts of which only a fifth is currently being utilized. We have initiated programs to enhance the electricity generation and our rural electrification program has covered nearly 80% of the villages in India.
In oil and gas a level playing field for all participants exists in exploration and production of oil and gas. Larger area and frontier basins are being brought under exploration. Under the New Exploration licensing Policy (NELP), production sharing contracts for 110 blocks in the last 5 rounds have been signed and this year we have opened another 55 blocks for participation. These initiatives have led to 30 oil and gas discoveries in NELP blocks and some, such as the gas discovery by Reliance, in the East coast off shore and by Cairn in Rajasthan are substantial. We are confident of seeing more oil and gas discoveries in the coming years.
Parallelly we have also taken up Coal Bed Methane extraction from coal deposits. This year we have launched the 3rd round of CBM blocks. The earlier two rounds finalized a total of 16 contracts for exploration and production for Coal Bed Methane (CBM) from which we are expecting first commercial production in 2007.
Besides the accelerated exploration programs, schemes to enhance oil production from the existing reservoirs are also in implementation. Our national oil company, ONGC, has taken up investment plans of US $ 2.7 billion in 15 fields to enhance oil production. These investments aim to raised the company’s oil recovery to 32 % in the first phase, after which it shall be enhanced to 40%.
In refining and marketing India has already introduced liberal policies. Investments in the refining sector are open to all, and companies investing over Rs. 20 billion (US $ 450 million) in the domestic oil and gas sector can market petroleum products in India. Owing to the demographic profile of India, petroleum products pricing is continuously monitored. At present the response to high international crude oil prices, is being modulated through normalizing the under recoveries of the marketing companies, but we are seriously looking at the ways to improve this situation.
We join the international community in the quest for discovering and producing more oil and gas, through our company ONGC Videsh Limited (OVL). It has today a presence in 13 countries with participating interest in various oil and gas projects, which include Sakhalin-I in Russia.
Besides our accelerating efforts at home and internationally, we are working towards building energy corridors through trans-national oil and gas pipelines to India from oil and gas rich regions in the East and the West of India. LNG plants both at East and West coasts of India are proposed. These initiatives could help to realize the vision of adequate, reliable and quality supplies for growth imperatives of not only India but of the entire South Asian sub-continent.
New technologies for generation of energy and its efficient productive use also augment energy security. The capabilities in engineering and technology in field of Gas hydrates exploration and production, Coal gasification, Gas to Liquids conversion, Coal bed Methane exploration and production, ultra deep oil and gas exploration and production, which is available in some parts, is largely lesser known in the developing world. We need to think in this direction also.
The time has come that the world collectively shares the responsibility of sustainable development for all, in order to elevate the quality of life of its people. We as energy ministers can initiate a crusade to overcome heterogeneity in the availability, use and productivity of energy.
I would appeal to this gathering of the G-8 + 5 to come together and initiate an institutional process of ensuring global energy security and lay the foundation of a new beginning, to realize the vision of secured, sustainable, equitable, efficient and productive global energy security.
