BackMEA seeks to help oil ministry secure India’s energy interests
Foreign minister Sushma Swaraj has asked the oil ministry for a list of nations where MEA can help
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New Delhi: Taking the Narendra Modi-led government’s theme of using diplomacy to secure economic interests forward, foreign minister Sushma Swaraj has asked the oil ministry to prepare a list of areas and countries where her ministry can pitch in to contribute towards India’s energy security, said Dharmendra Pradhan, India’s petroleum minister, in an interview on Thursday.
“The foreign minister has asked me for a list of areas and countries where her ministry can help us. It’s not that it has not happened before but now it is happening aggressively," Pradhan said.
This comes at a time when India’s energy security future remains clouded by sputtering investments in power, hydrocarbons and coal mining at home and troubled forays abroad, even as the new government, which rode to power on a promise of prosperity and economic revival, settles down.
Given the foreign policy imperatives for India’s energy security, the petroleum minister has also appointed an Indian Foreign Service officer as his personal assistant.
“This government has started thinking in that direction (forming an energy security doctrine). When we know that there is limitation to its speed and scale, despite that the prime minister clubbed the ministries for a presentation, which all ministries were called to—oil and gas, power, coal and non-renewable energy. This is a first indication that let’s have a big canvas so that there could be a joint strategy for energy requirements," said Pradhan.
While the Bharatiya Janata Party (BJP) had articulated the need for energy security in its election manifesto, India, which is highly dependent on imports to meet its energy demand, is yet to evolve a “long-term national energy security policy".
India, the world’s fourth-largest energy-consuming nation after the US, China and Russia, accounts for 4.4% of global energy consumption. India imports 80% of its crude oil and 25% of its natural gas requirements. The country’s energy demand is expected to more than double by 2035, from less than 700 million tonnes of oil equivalent (mtoe) now to around 1,500mtoe, according to India’s oil ministry.
“Our prime minister has given an important policy statement about what should our foreign departments do. He said that foreign departments should protect India’s economic interests," Pradhan said.
Progress with fuel pipelines—once seen as the one-stop solution for energy woes—has been dismal. Some attempts to achieve energy security through overseas investments have run into trouble such as ONGC Videsh Ltd’s (OVL’s) $2.1 billion acquisition of Imperial Energy Corp. Plc’s Siberian deposits. OVL, which is tasked with securing energy resources overseas, has also faced difficulties in Venezuela, South Sudan and Syria. Till now, the company has invested ₹ 78,000 crore in overseas energy assets.
Also, the security situation in Iraq, a key supplier of crude oil to Asia’s third-largest economy, has been a cause of concern. India imports 12.9% of its requirements, or 21-22 million tonnes, from Iraq. As a supplier, the country has displaced Iran, targeted by Western sanctions because of its suspected nuclear weapons programme.
However, Pradhan dismissed such concerns.
In response to a question about India arranging for alternate supply, Pradhan said, “I said that when there is a crisis in Iraq that I will do that. But there is no crisis in Iraq. Whatever our offtake from Iraq is, we have done that. Around 40-45% has already been completed. India’s procurement linkages are far-off from the areas in Iraq where there is a crisis. Our procurement is safe. We are still getting oil."
“We have started receiving good news. Oil has stabilized. These are good signs. Had there been no such crisis in Iraq, we would have got even more consumer-friendly rate to India. Iraq forced us into some problems but despite that we have managed to do this."
Pradhan also wants the public sector undertakings (PSUs) under his ministry to change their style of functioning, and open up positions to private sector experts.
“PSUs are important organs of this oil economy. They need to change with time, especially their top leadership. A lot of new talent join them, especially from engineering and marketing, therefore, there is no shortage of intellectual capacity there. What it needs is a leadership who can have a world view, who can get best technology, best marketing practices of the world and have a knack of social profiting. Therefore, we need to strengthen its leadership with dynamism and accountability," Pradhan said.
On its part, the BJP-led National Democratic Alliance has expressed its willingness to open up these positions to private sector experts for providing effective governance, with the desired priority skills being set as “high integrity" and “high efficiency".
“Even within the country, there are a lot of models where we have world-class competency. So, we need to pull together all the best practices. PSU leadership will have to update themselves. They have to be more focused and dynamic if they have to compete with the world giants," Pradhan said. “When I said that this government is going towards a paradigm shift for governance, this, (opening PSU leadership positions to the private sector) is also a part of that. If we need to make this country a world economic power, we will have to do whatever is required."
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