In line with Prime Minister Narendra Modi’s ‘Make in India’ initiative to give domestic manufacturing a major push, the country’s oil and gas sector is expected to see investments worth as much as Rs 5-6 lakh crore over the next five to seven years.
Manufacturing opportunity is expected to be created in the near-to-medium term across the oil and gas value chain including upstream sector (oil and gas exploration and development), midstream (gas pipelines and LNG ship building) and downstream (refining and petrochemicals), petroleum ministry sources said.
Ministry officials cited a recent presentation by Boston Consulting Group (BCG), according to which the upstream oil and gas sector will see investments of close to Rs 1.6 lakh crore over the next 5-7 years for development of discovered basins and other exploration and development activities.
Investments to the tune of another Rs 2.6 lakh crore are expected to come in for development of natural gas pipeline infrastructure in five years as well as in LNG shipbuilding and creation of city gas distribution networks and new LNG terminals. Refinery & petrochemicals, too, are likely to see huge investments of about Rs 88,000 cr and Rs 100,000 crore, respectively.
“The investments will boost demand, leading to higher procurement to be leveraged to promote domestic manufacturing…Targets are being set for each PSU to promote indigenisation,” the official said. “Various key initiatives have been undertaken in the last six months… a steering committee constituted on October 27, 2014 to identify equipment and products in the petroleum sector which can be domestically manufactured.”
Further to jump-start manufacturing, the government will emphasise on local value addition, opening of more service centres in India, providing access to capital at globally competitive rates, creating shipbuilding capabilities, the official said.