A Comprehensive Energy Policy will Drive the Growth of the
Indian Gas Industry and Attract Foreign Investments
Reference Code: GDGE0633VPT Publication Date: May 2010
1 Table of Contents 2 Summary
1 Table of Contents.................................................................1 A significant portion of India’s natural gas demand can be met
1.1 List of Tables .................................................................1 by its natural gas resources over the short-term. Despite
1.2 List of Figures................................................................1 significant gas discoveries, the Indian natural gas industry has
2 Summary .............................................................................1 not gained sufficient positive momentum. The regulated price
3 A Comprehensive Energy Policy will Drive the Growth of the market has been one of the major factors for the delay of the
Indian Gas Industry and Attract Foreign Investments ..........1
development process. Additionally, the country does not have a
3.1 Increasing Reserves Are Favoring the Growth of Indian
Natural Gas Industry .....................................................1 unified, transparent and comprehensive energy policy, which
3.2 Government Controlled Gas Prices Deter Foreign would improve economic clarity, accelerate the approval
Investments and Domestic Exploration Investments .....2 process and encourage foreign and domestic exploration
3.3 Initial Measures By the Government are Not Adequate investments. An unambiguous energy policy framework from
to Boost the Natural Gas Industry .................................3 the government should provide a commercially viable price
3.4 Despite Being Regulated, the Immense Unexplored
fixation mechanism to boost domestic natural gas production
Potential Attracts Oil and Gas Majors............................4
3.5 Lack of Robust Policy Framework will Delay the Indian and exploration activities. The implementation of new policy
Natural Gas Industry Development ...............................4 would impel the domestic and overseas oil and gas majors to
4 Appendix..............................................................................5 make the investments required to drive the country’s natural
4.1 Methodology..................................................................5 gas production and exploration activities.
4.1.1 Coverage..............................................................5
4.1.2 Secondary Research............................................5 3 A Comprehensive Energy Policy will
4.1.3 Primary Research ................................................5 Drive the Growth of the Indian Gas
4.1.4 Expert Panel Validation ........................................6
4.2 Contact Us ....................................................................6 Industry and Attract Foreign
4.3 Disclaimer .....................................................................6 Investments
India is experiencing a drastic increase in energy demand due
to increasing internal demand and rising industrial consumption.
1.1 List of Tables A major portion of the Indian energy demand is met by imports.
Table 1: India, Oil and Gas Reserves, 2005-2009.....................2 Despite having adequate domestic reserves, the country did not
Table 2: India, Exploratory and Development Drilling, 2004- witness a significant increase in domestic oil and gas
2009 .........................................................................2 production in 2004-2009. The homegrown oil and gas majors
could not capitalize on the reserves due to prices being
regulated. Moreover, the subsidized prices have led to
1.2 List of Figures undercover losses for the domestic oil and gas majors. The
country’s conventional regulated price market has also
Figure 1: GlobalData Methodology ..........................................5 discouraged the participation of overseas oil and gas majors.
The extended time-line for block allocation, the low
transparency in allocation, the lack of a robust regulatory body
and policy has dissuaded foreign investments.
3.1 Increasing Reserves Are Favoring the
Growth of Indian Natural Gas Industry
Natural gas contributed 24% of the global energy consumption
in 2009, whereas the share of natural gas in the total energy