Energy security: We need not be staring at a $1 trillion import bill

India needs to move quickly to eliminate hurdles in the way of reducing its growing dependence on oil and gas shipments

- VIJAY L. KELKAR & RAHOOL S. PAI PANANDIKER

As India races towards economic superpower status, a glaring vulnerability threatens to undermine our progress: our dependence on imported oil and gas. According to the Petroleum Planning & Analysis Cell (PPAC), India's crude oil import dependency has reached 87-88%, with projections suggesting it may exceed 90% by 2030. This trajectory could result in a staggering $1 trillion energy import bill over the next five years.

The decline in domestic production makes for disheartening reading. Our crude oil output has fallen from over 36.9 million tonnes in 2015-16 to just 29.7 million tonnes in 2023-24, even as our consumption stays on a relentless upward trajectory. Natural gas presents a slightly better picture, with import dependency at 50-55%, but rapidly rising demand threatens to widen this gap as well.

On paper, India holds significant hydrocarbon potential: around 210-215 billion barrels of oil and oil-equivalent gas across 3.14 million sq km of sedimentary basins. Yet, only half this area has been explored. Without aggressive efforts to explore and develop these reserves, this potential will remain untapped.

To its credit, India's government has implemented several policy initiatives to stimulate upstream activity. The Hydrocarbon Exploration and Licensing Policy (HELP), introduced in 2016, replaced the previous New Exploration Licensing Policy with a revenue-sharing contract (RSC) model, uniform licensing for all hydrocarbons and promised marketing and pricing freedom for new gas production. The Open Acreage Licensing Policy (OALP) allowed companies to select exploration blocks year-round, rather than waiting for formal bid rounds.