Looking for offshore oil to beef up supply

Energy security must work on other fronts too, including building large strategic reserves and technology to substitute between imported and domestically available fossil fuels

The Indian economy has done better than what most people expected in the wake of the oil shock from the ongoing Iran war. However, the roots of this resilience lie in the country’s fiscal prowess, which allowed it to procure supplies at higher prices. This, while welcome, cannot be a strategy. India must reduce its energy import dependence on a long-term basis. Renewables will be an integral part of the plan, but it must also include securing fossil fuel supplies.

The Cabinet decision to sanction aims to boost India’s domestic oil and gas offshore production by working on all levers (Bloomberg)

It is in this regard that the Cabinet decision to sanction ₹84,000 crore for offshore oil and gas exploration over the next five years is welcome. The decision aims to boost India’s domestic oil and gas offshore production by working on all levers: collect high quality seismic data, subsidise exploration activities and expand the industrial infrastructure to increase petroleum processing. The decision should be seen as one of the pillars to secure India’s energy requirements. Exploration, even when successful, does not always translate into commercially viable scaling of operations. Also, it is unlikely that India’s oil and gas production will ever have a share to reckon with in the country’s overall energy needs.

So, energy security must work on other fronts too, including building large strategic reserves and technology to substitute between imported and domestically available fossil fuels (coal-based fertiliser production, for instance). The announcement of the Samudra Manthan project to aggressively pursue offshore oil and gas production should, hopefully, be the first of policy measures to boost energy security.