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'21st century is the century of gas'

India's Minister for Petroleum and Natural Gas, Ram Naik, presents his view on
'Oil Scenario in the New Millennium: Issues and Perspectives' in an erudite exposition.

With global oil prices threatening to impact adversely several economies, no other time would be more appropriate than now to discuss the oil scenario in the new millennium. I only wonder whether I should discuss in terms of the millennium, the century or the current year. I would like to have a mix of all of them.

21st century will be the century of gas

The 19th century was the century of coal. The 20th century was the century of oil. The new century will be the century of gas.

We have moved from oil to gas in the new century. The world scenario, as far as we are concerned, is presently dictated by oil producing countries. Big oil-consumers like the USA and other developed countries have their impact on the market.

These countries are in a better position to pay higher prices. In this situation, the crude prices in the global market have soared in the last one-and-a-half years; it was $11 a barrel in February-March 1995; in September 2000, it has reached $35, a three-fold increase.

So far as India is concerned, presently we import 70 per cent of our requirement. The indigenous production is thirty per cent but that production is going down, if we consider the quantum. Our import bill last year (1999-2000) was Rs 540 billion. And at the present rates, if they remain at $30 for the remaining five months of this fiscal, our import bill would be Rs 800 billion.

This is the situation we are living in. We are lucky in a way. Our foreign exchange reserves are at a healthy level. As a country, we have never defaulted in repayment of loans like some other countries have been doing. In that context, our good reputation at the global level is intact.

Need for a long-term oil policy

When I was asked to work with the petroleum and natural gas ministry, the first thing I did was to press for a long-term policy. And I deliberated with my colleagues the different aspects of hydrocarbons, whether it is exploration, refining, etc.

We appointed different groups of the best available talent in India. After receiving their reports and those of the sub-groups, we brought out what we call India Hydorcarbons Vision 2025.

Having done that, it was placed before both houses of Parliament. This document is also available on the ministry's Web site. The first and important task which we have taken up is about exploration, which has been neglected so far.

The very fact that indigenous production has been meeting only thirty per cent of our internal demand, and has not gone up at all, tells the tale. Our consumption is increasing by six to seven per cent every year. Naturally, since there has been no important find, we have been stagnating.

So we formulated New Exploration Licensing Policy or NELP. Under that policy, worldwide offers were invited. In a period of seven months, the offers were sorted out. In the month of April 2000, we have given 25 blocks for exploration.

Let me offer you a comparative picture: for the period of 1991-98, 23 contracts were signed; within seven months after we came to power, we signed 25 contracts. That's the difference.

India forays into deep-sea exploration

Our scientists have been working in the sea and are keen on deep-sea exploration -- deep-sea is where the depth of water is more that 500 metres. Bombay High wells are not in deep-sea. They are 170 kilometres away from the coast. They are around 450 meters deep. We have developed the necesssary knowledge, technique and expertise for deep-sea exploration.

We have decided to bring out the second round of licenses under the NELP. This will be done before December 11. The way our people are working... we have no proper words to appreciate their work. This is one way of increasing the production within the country.

India goes global

We are also taking steps to get some deals in other countries like Vietnam. ONGC Videsh has successfully entered into a contract and we will explore there and also produce there.

In a systematic way, we are trying to go into other countries like Russia, Iran and Iraq. I have no doubt in my mind that after six months, you will feel, yes, the country is doing something sincerely and seriously in this field.

This is known as the explore-and-exploit programme. (I'm not very happy with the word 'exploit'. It has negative connotations. The right word is 'produce'.)

Part II: India is self-sufficient in refining

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