BackIndia leverages talent to seek access to global energy resources
The soft-power strategy seems to be paying off with Kuwait having shown interest in sourcing talent from this human reservoir
Premium
New Delhi: In a bid to boost India’s energy security efforts, the petroleum ministry has prepared a list of 5,000 retired hydrocarbon professionals and is showcasing it to energy-rich countries that need help developing their resources.
India, the world’s fourth largest energy consumer, is leveraging this talent pool of professionals, who can work for years to come, in order to create pockets of influence in these countries.
The soft-power strategy seems to be paying off, with Kuwait having already shown interest in sourcing talent from this human reservoir, India’s petroleum secretary Vivek Rae said.
These countries are expected to play an important role in meeting India’s growing energy needs. India imports 80% of its crude oil and 18% of its natural gas requirements. The country trails the US, China and Russia, accounting for 4.4% of global energy consumption. “This is a low-cost, high-impact strategy. We have this expertise; we will be leveraging it. While Kuwait has already asked for tapping this pool, Ecuador has said this is a great exercise. This is an attempt to open up these markets. We are aggressively marketing this initiative to the energy rich countries," Rae said.
The government believes that sharing such a talented and experienced pool will help India cement strong strategic relations across the world.
India has been busy tying up energy resources overseas, the latest acquisition being the Rovuma Area 1 offshore basin in Mozambique, the largest gas find off Africa’s east coast that is valued at $60 billion. State-owned ONGC Videsh Ltd (OVL), Oil India Ltd (OIL) and Bharat Petroleum Corp. Ltd (BPCL) together hold a 30% stake in Area 1, which has estimated recoverable reserves of 35-65 trillion cu. ft.
Speaking at Petrotech 2014, a biennial conference held last week, Rahul Dhir, chief executive officer, Delonex Energy, said, “India’s biggest resources are its human capital."
The approach also stems from the fact that while interest in the Indian hydrocarbon sector is waning, its energy demand is expected to more than double by 2035, from less than 700 million tonnes of oil equivalent (mtoe) today, to around 1,500 mtoe, according to the petroleum ministry.
India has been trying to restrict its current account deficit (CAD) to $50 billion in the year ending 31 March. In order to do so, it has been trying to bring down its oil import bill by taking equity in overseas assets, which could reduce both supply risks as well as price shocks.
Of India’s total imports worth $491 billion last fiscal, oil accounted for $164 billion. Till date, state-owned firms have invested ₹ 64,832.35 crore on overseas energy assets, according to the petroleum ministry.
In a 15 January report titled India: Towards Energy Independence 2030, consultants McKinsey and Co. said, “India imports a substantial portion of its energy—80% of its oil, 18% of its gas, and now even 23% of its coal. As the Indian economy continues to grow, so will its energy consumption, especially as the growth of its manufacturing sector catches up with services and agriculture. With domestic resource production facing various challenges, the general expectation has been that Indian energy imports will continue to grow, and energy security concerns will intensify."
Though India has ramped up efforts to secure overseas resources, faltering domestic production means attempts to create energy security have been a mixed bag at best.
State-owned Oil and Natural Gas Corp. Ltd (ONGC) has been battling concerns over its production capabilities and diminishing yields at its ageing oil fields.
While ONGC’s domestic reserves increased to 1,287 mtoe in 2011-12 from 1,243 mtoe in 2010-11, its production declined to 52.4 mt from 52.6 mt in that period. ONGC produced 26.12 mt crude in 2012-13 against 26.92 mt in the previous fiscal year. Gas production fell to 25.33 billion cu. m (bcm) from 25.51 bcm.
McKinsey, in its report, said India should “allow its energy PSUs (public sector units) sufficient freedom to develop global talent pools that can seamlessly operate in multiple markets, and transfer capabilities across borders."
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
