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India must look for oil assets overseas: CII

business Updated: Jul 19, 2009 11:35 IST

As the oil price is below $100 per barrel in the international market right now, India should look at entering long-term crude oil contracts and acquiring oil assets overseas, suggests the Confederation of Indian Industry (CII).

With the price of oil hovering around $70 a barrel, CII feels there still exists a window of opportunity for India to acquire international oil acreage and to secure long term oil supply deals to secure the country's energy future at an affordable price.

"The accelerated demand for energy makes it imperative for India to garner assured and continuous supply of energy at reasonable prices through internal efforts and acquiring international acreages," CII said in a statement.

As per CII estimates, the demand for oil would be 328 million tonnes oil equivalent (Mtoe) by 2030, an increase of 3.8 per cent year-on-year.

"Estimates suggest that by 2020, only about 25 per cent of the total demand will be met internally," CII said.

In this backdrop CII has emphasised that industry, both public and private sectors, should collaborate to secure oil equity overseas. The government on its part must facilitate and encourage such partnerships and aggressively pursue the strategy of acquiring overseas oil and gas assets.

"Ensuring India's energy security requires active participation from Indian industry, both the public and private sectors, with support from the government to secure fuel supply at predictable and affordable prices," said Chandrajit Banerjee, director general of CII.