Could India become a petro-rupee state? The Indian oil minister said last week that the country has almost as much oil as Saudi Arabia, just when conventional wisdom says it’s running out. Energy independence would be excellent; relying on oil without building a real economy, disastrous.
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Petrominister |
[Mani] Shankar Aiyar, minister of petroleum for India… believes that India could become a petrodollar state in the 21st century… The optimism is grounded in massive oil deposits, close to 30 billion tons, in Central India. That’s twice the size of the deposits in Iraq (13 billion tons, according to the Institute of Petroleum) and just shy of Saudi deposits. With this, India, which imports 70 percent of its oil, could become an exporter… [Link]
India may exhaust its existing oil fields soon, and as its economy grows, so does its thirst:
India has oil reserves to last only till 2016, if no new discovery is made, the Petroleum Minister, Mr Mani Shankar Aiyar, said today. [Link]ONGC’s oil output has stalled at about 520,000 barrels a day in the past couple of years and is expected to decline as older fields near the end of their productive lifespan. Mr Aiyar voiced concerns about a fall in domestic output at a time when India’s rapidly expanding economy is fuelling huge demand for energy. [Link]
Central India has oil deposits twice the size of those in Iraq and just shy of Saudi deposits. But they’re not easy to extract
India ranks sixth in the world in terms of energy demand… While India has significant reserves of coal, it is relatively poor in oil and gas resources… The majority of India’s oil reserves are located in fields offshore Bombay and onshore in Assam. Due to stagnating domestic crude production, India imports approximately 70% of its oil, much of it from the Middle East… The World Energy Outlook… projects that India’s dependence on oil imports will grow to 91.6% by the year 2020. [Link]
Nearly half [India’s] electricity, according to various estimates, gets stolen by individuals placing illegal feed wires onto power lines… [Link]
But exploiting the new Deccan fields isn’t easy. The trick is extraction:
Unfortunately, oil is stuck under the Deccan Traps, a deep layer of volcanic rock created 65 million years ago when the protocontinent Gowandaland smacked into Eurasia. The collision coincided with the extinction of the dinosaurs… Geological science remains a second-class citizen at the Indian Institutes of Technology. [Link]The Deccan Traps is a large igneous province located in west-central India and is one of the largest volcanic features on Earth. It consists of multiple layers of solidified flood basalt that together are more than 2,000 m thick and cover an area of 500,000 km². [Link]
… most oil and gas has been found in sedimentary terranes up to now… there is a growing record of petroleum resources in igneous terranes… igneous rocks below sedimentary cover may well have enormous potentials. [Link]
India has even been investing in our favorite 419 state, Nigeria, as well as in Russia, Iran, Syria, Sudan, Vietnam, Myanmar, Kazakhstan and Tajikistan. The presence of oil easily controlled by a central government is, of course, highly correlated with political repressionThe presence of oil easily controlled by a central government is highly correlated with political repression. It’s the curse of black gold.
ONGC and other Indian energy firms are increasingly looking abroad to develop new supplies. It recently teamed up with steel producer Mittal Steel to secure oil exploration rights in Nigeria in return for a huge investment in infrastructure in the oil-rich African country. [Link]To support energy security interests in Central Asia, India has already stationed troops in Tajikistan, provided it with $40 million aid package and undertook to refurbish an air base near the Tajik capital Dushanbe. India is also pursuing relations with Kazakhstan, Azerbaijan and Iran. [Link]
With its choice of oil partners, India is now heading into territory well traversed by the U.S. Funding those who would attack you — sounds mighty familiar.
… many of the countries with which India is dealing are known for severe violations of human rights, sponsorship of terrorist activities, and general misuse of oil revenues. Further enrichment of oil supplying countries like Sudan, Syria and Iran is not in the interest of India, a country which itself is a prime target of Islamist terrorism. [Link]
Just as India skipped the wireline era and plunged headlong into mobile phones, this would be an ideal time for the Indian government to incentivize hybrids and alternate fuels. Here’s an even better idea to pump oil more efficiently: undo Indira Gandhi’s handiwork of ‘76 and privatize the oil ministry. Mani Shankar Aiyar should get rid of his own job.
