Energy companies spend less than 1% of their sales on research and development, and will have to top this figure if they are to help the country address its growing energy needs, experts said.
Data compiled by the petroleum and natural gas ministry show that annual revenues of energy companies aggregate around Rs5 lakh crore, of which they spend Rs370 crore, or 0.74%, on R&D. Comparable figures for other developed countries are around 1%.
“In order to fully tap into the hydrocarbon potential of the country, there is a pressing need to develop technologies that can help in E&P (exploration and production) activities in deep offshore areas,” said an official at the petroleum ministry who did not wish to be identified.
Apart from not possessing the technology to explore for oil and gas in deep offshore blocks, Indian firms do not have the skill required to tap gas from gas hydrates. Energy firms have in the past sourced technology for exploration from foreign firms, it is in areas such as refining that they are lacking.
“As Indian oil-marketing firms have global ambitions and are expanding into overseas market, they need to develop strong R&D,” said Ajay Arora, a partner with Ernst & Young.