China’s share of oil demand growth is set to decline from 50% to 15% over the next decade while India’s share is expected to double to 24%.
A potentially game-changing discovery for the economic future of Pakistan was recently announced: a vast oil and gas field was found in the country’s territorial waters.
According to some preliminary estimates, these reserves could rank fourth in the world in size, representing a real turning point for an economy that has struggled for years to find stability. However, despite the importance of this discovery, major international oil companies do not seem particularly interested.
In July, Pakistan’s Oil Minister, Musadik Malik, told a parliamentary committee that no foreign companies have expressed interest in offshore exploration in the country. The main difficulties are the high costs related to security. Indeed, companies face significant expenses to protect their personnel and infrastructure in areas potentially rich in hydrocarbons.
In contrast, neighboring Pakistan, India, does not face the same obstacles in terms of security, proving a much more attractive option for international oil companies. India’s Petroleum Minister Hardeep Singh Puri recently called on energy majors to step up oil and gas exploration in the country. The aim is to reduce India’s dependence on imports and ensure affordable fuel supplies.
Singh Puri highlighted that the country offers investment opportunities in the exploration and production (E&P) sector worth $100 billion by 2030. Currently, only 10% of India’s vast sedimentary basin, which covers 3.36 million square kilometers, has been explored. However, the potential is huge: According to a report by S&P Global Commodity Insights, four largely unexplored sedimentary basins could hold up to 22 billion barrels of oil. These lesser-known basins, such as the Mahanadi, Andaman Sea, Bengal, and Kerala-Konkan, could surpass the enormous Permian basin in reserves, which is known to have produced 14 billion barrels so far.
India has already made major oil and gas discoveries in basins such as the Krishna-Godavari, Barmer, and Assam, but exploration in other areas has remained limited. Of particular interest are deep-water offshore areas. This year, India’s state-owned Oil and Natural Gas Corporation (ONGC) began its first deep-water exploration projects in the Krishna-Godavari basin, with investment plans exceeding $10 billion.
Another state-owned company, Oil India Ltd, is also planning to start exploration in the state of Nagaland, demonstrating the country’s growing appetite to expand its hydrocarbon production capacity. While domestic companies like ONGC and Oil India are active, it remains to be seen whether large international oil companies with the expertise to tackle the challenges of ultra-deepwater exploration will step in.
Unlike Pakistan, India seems to have all the makings of attracting international energy giants. Recently, British multinational BP held a board meeting in India, looking for new investment opportunities. BP has already established a joint venture with Reliance Industries, one of India’s largest conglomerates, to operate 1,900 service stations in the country and produce oil and gas from a deepwater block in the Krishna-Godavari Basin.
Going forward, India is set to become a key player in the growth of global oil demand. Analysts predict that the country will overtake China as the main driver of oil demand growth in the coming years. The country’s growing population, which may have already surpassed China’s, is one of the major factors behind this trend. Additionally, India’s transition to electric vehicles and cleaner energy sources may take longer than other regions, keeping demand for traditional fuels high.
According to Fitch Solutions, China’s share of emerging market oil demand growth is set to decline from 50% to 15% over the next decade, while India’s share is expected to double to 24%. This shift, driven by demographics and industrial development, positions India as a key market for global oil companies.
Original article published on Money.it Italy 2024-10-13 08:00:00. Original title: Transizione green? L’India punta tutto su petrolio e gas
