New Delhi, June 20 (IANS) With India projected to grow at over 6 per cent annually and its primary energy demand increasing at a CAGR of 5.5 per cent, there is an urgent need to safeguard oil and gas supply chains amid rising geopolitical and market uncertainties, according to a report released on Friday.

Over 85 per cent of India’s crude oil needs are met through imports, positioning the country as the world’s third-largest oil importer.

“Geopolitical instability, especially in chokepoints like the Hormuz Strait and Suez Canal, threatens consistent crude supply and pricing,” said the report by the PHD Chamber of Commerce and Industry (PHDCCI).

Brent crude prices are forecast to decline from $81 per barrel in 2024 to $66 per barrel in 2026, driven by supply expansion outside OPEC+ and moderate demand growth.

“India’s economic growth trajectory demands resilient and diversified energy sources. This report provides an integrated roadmap to navigate future energy challenges while ensuring affordability, accessibility, and sustainability,” said Hemant Jain, PHDCCI President.

The industrial sector now consumes approximately 40 per cent of India’s total energy, making it the largest single energy-consuming sector in 2023.

“Over past three decades, industrial energy demand has tripled, and industry accounts for approximately 36–38 per cent of final energy consumption,” the report noted.

Currently, India’ domestic oil and gas production is centred in Assam, Gujarat, Rajasthan, Mumbai High and the Krishna Godavari Basin.

Hydrocarbon Exploration and Licensing Policy (HELP) launched in 2016 has simplified approval processes, with attractive fiscal terms, and bolstered licensing and exploration activity.

By mid-2024, 144 blocks covering approximately 243 000 km² had been awarded, though international companies have largely avoided participation, favouring other countries with more attractive terms.

Offshore production is set to increase thanks to additional supplies from ONGC’s deepwater KG-D5 project between 2025 and 2030.

However, offshore (and overall) gas supply growth will be tempered by plateauing output from the KG-D6 fields and declining production from legacy assets like ONGC’s Mumbai offshore fields.

According to recent reports, India may be inching closer to a game-changing offshore oil discovery in the Andaman Sea — one that could hold as much as 184,440 crore litres of crude oil and rival Guyana’s transformational find, Union Petroleum and Natural Gas Minister, Hardeep Singh Puri, has hinted.

According to projections, India’s natural gas production is also expected to rise to 54.7 BCM by FY 2029-30.

–IANS

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