Could India become a petro-rupee state? The Indian oil minister said last week that the country has almost as much oil as Saudi Arabia, just when conventional wisdom says it’s running out. Energy independence would be excellent; relying on oil without building a real economy, disastrous.
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Petrominister |
[Mani] Shankar Aiyar, minister of petroleum for India… believes that India could become a petrodollar state in the 21st century… The optimism is grounded in massive oil deposits, close to 30 billion tons, in Central India. That’s twice the size of the deposits in Iraq (13 billion tons, according to the Institute of Petroleum) and just shy of Saudi deposits. With this, India, which imports 70 percent of its oil, could become an exporter… [Link]
India may exhaust its existing oil fields soon, and as its economy grows, so does its thirst:
India has oil reserves to last only till 2016, if no new discovery is made, the Petroleum Minister, Mr Mani Shankar Aiyar, said today. [Link]ONGC’s oil output has stalled at about 520,000 barrels a day in the past couple of years and is expected to decline as older fields near the end of their productive lifespan. Mr Aiyar voiced concerns about a fall in domestic output at a time when India’s rapidly expanding economy is fuelling huge demand for energy. [Link]
Central India has oil deposits twice the size of those in Iraq and just shy of Saudi deposits. But they’re not easy to extract
India ranks sixth in the world in terms of energy demand… While India has significant reserves of coal, it is relatively poor in oil and gas resources… The majority of India’s oil reserves are located in fields offshore Bombay and onshore in Assam. Due to stagnating domestic crude production, India imports approximately 70% of its oil, much of it from the Middle East… The World Energy Outlook… projects that India’s dependence on oil imports will grow to 91.6% by the year 2020. [Link]
Nearly half [India’s] electricity, according to various estimates, gets stolen by individuals placing illegal feed wires onto power lines… [Link]
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p>But exploiting the new Deccan fields isn’t easy. The trick is extraction:
Unfortunately, oil is stuck under the Deccan Traps, a deep layer of volcanic rock created 65 million years ago when the protocontinent Gowandaland smacked into Eurasia. The collision coincided with the extinction of the dinosaurs… Geological science remains a second-class citizen at the Indian Institutes of Technology. [Link]The Deccan Traps is a large igneous province located in west-central India and is one of the largest volcanic features on Earth. It consists of multiple layers of solidified flood basalt that together are more than 2,000 m thick and cover an area of 500,000 km². [Link]
… most oil and gas has been found in sedimentary terranes up to now… there is a growing record of petroleum resources in igneous terranes… igneous rocks below sedimentary cover may well have enormous potentials. [Link]
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p>India has even been investing in our favorite 419 state, Nigeria, as well as in Russia, Iran, Syria, Sudan, Vietnam, Myanmar, Kazakhstan and Tajikistan. The presence of oil easily controlled by a central government is, of course, highly correlated with political repressionThe presence of oil easily controlled by a central government is highly correlated with political repression. It’s the curse of black gold.
ONGC and other Indian energy firms are increasingly looking abroad to develop new supplies. It recently teamed up with steel producer Mittal Steel to secure oil exploration rights in Nigeria in return for a huge investment in infrastructure in the oil-rich African country. [Link]To support energy security interests in Central Asia, India has already stationed troops in Tajikistan, provided it with $40 million aid package and undertook to refurbish an air base near the Tajik capital Dushanbe. India is also pursuing relations with Kazakhstan, Azerbaijan and Iran. [Link]
With its choice of oil partners, India is now heading into territory well traversed by the U.S. Funding those who would attack you — sounds mighty familiar.
… many of the countries with which India is dealing are known for severe violations of human rights, sponsorship of terrorist activities, and general misuse of oil revenues. Further enrichment of oil supplying countries like Sudan, Syria and Iran is not in the interest of India, a country which itself is a prime target of Islamist terrorism. [Link]
Just as India skipped the wireline era and plunged headlong into mobile phones, this would be an ideal time for the Indian government to incentivize hybrids and alternate fuels. Here’s an even better idea to pump oil more efficiently: undo Indira Gandhi’s handiwork of ’76 and privatize the oil ministry. Mani Shankar Aiyar should get rid of his own job.
Well, it would be great if we could gurantee that there woul dnot be mass ‘leakage’ – the euphemism for the corruption that would see the benefits of this going to waste.
If it could be utilised for spending on infrastructure, education, health, investment in science and industry – just imagine what a godsend that would be. But the question is, do people in India have the foresight and integrity to do that? Spend the oil billions on providing opportunity for the poor, whilst bringing Indian infrastructure up to 21st century standards?
Then that would be a dream come true.
I have a stupid question – who lives where these oil reserves are held? I wonder if we’d see an Ogoni-land style situation as folks tried to do extraction.
Like dams, oil is not going to be a fun way to go down. I say give up on the muck and go to sustainable, less invasive energy extraction. India could do amazing things with hybrid technology.
well 100cc motorcycles are efficient than a hybrid car. And a couple of folks tell me that its possible to squeeze another 10-15% efficiency out of small bikes by using more sensors and cvt’s(i dont know much about this… but if its true i’m sure they are looking into this globaly scooters,mopeds and commuter bikes are huge markets.) Now only if indians can understand that helemts, and gloves and shoes are not fashion statements so many injuries can be avoided. And whats with the ammaji’s sitting sideways on a bike w/o helmet and in chappals….
Indian Oil will not be privatized anytime soon. The Communist Party of India is in power.
How about metro systems in the six major urban centers?
Hard reality: There simply is not enough easily accesible oil for the hordes of Hindustan and China to have a first-world, energy profligate lifestyle. Now that North Sea reserves have virtually dried up, the only swimming pool left is in the Middle East, and you gotta beat down some of the locals to get any piece of that.
We are all–first world included–going to eventually meet somewhere in the middle. Nuclear energy is a good strategy worth pursuing.
All’s not lost yet. There is definitely a slow, but growing energy awareness in India, with active search for sources for alternative energy.
Here in Bangalore, there are quite a few Reva electric cars, and my friends say that their tribe’s increasing. I also see solar-powered traffic lights, heating systems etc all around.
Did you know that the state of Tamil Nadu has a huge wind energy effort? One of the most exhilarating sights during my travels in South India were these wind farms stretching for miles and miles on either side of the highway.
Dhaavak, my blog is here. I’ve managed to put up one entry about the first few days of my trip, but rest will be put up soon, as soon as I get back home early next week.
dude, where is Kush?
Saheli,
I am here. I have been quite busy for last three-four weeks. Also, I was in SF for a meeting and just came back.
I’ll write my view once I slept from yesterday’s party on O’Farell street.
I personally think Mani Shankar Aiyar has lost his cabbage. There maybe oil beneath Deccan traps but I have not seen any evidence for giant oil fields similar to Saudi Arabia. Oil men are prone to day dreaming and that is how they make investors invest money – sometimes it works and does wonders but do not take them too seriously.
Also, there has been some privatization in oil and gas exploration in India – only some. Reliance Energy has very strong presence (I have lot of friends working there). Crain Energy from Canada discovered a new gas field recently. ONGC being privatized was on the cards but has been put on back burner due to colation realities of NDA.
More later……….spoiler (I think India’s energy policy is still in dark ages compared to USA, Europe, Japan, and China……China is squeezing India out in new frontier areas).
Alternate energy……there is a huge DOE funded project in India (last year Science magazine on Hydrogen Economy discussed it). However, they will be more novetly acts for another 30-40 years. Let’s not count them as solution yet.
Correction: Cairn Energy is from UK.
Deccan trap type exploration in many ways is similar to new exploration work in sub-basalts in North Sea.
Also, remember oil and gas politics is always dominated by national oil companies. Saudi Aramco is five times bigger than Exxon-Mobil. We thought Exxon-Mobil was Godzilla.
More later….
“I personally think Mani Shankar Aiyar has lost his cabbage”
Kush, you kill me man! 😀
The Cairn gas field – is this the offshore field that was being hyped some time back?
Nigel Lawson (former UK Chancellor of Exchequer) was on BBC’s Hardtalk last night and had some interesting things to say about energy policy in India and China. Major point – the politics of Kyoto and renewable energy poorly reflect realities on the ground in terms of demand and efficiency in India and China.
Personally – based on what I’ve been hearing from friends/entrepeneurs in Pune/Chennai – I think alternate/renewable energy sources might (have to) end up playing a larger role in the Indian economy than it has so far in the US.
“I think alternate/renewable energy sources might (have to) end up playing a larger role in the Indian economy than it has so far in the US.”
Sure, it will. To some degree cultures like India have been using alternate energy much before – cow dung in villages. Paper bags are made of old newspapers, use of cloth bags for daily use, and glass bottles have been used again and again – recycling on a larger scale existed there much before here. On the other hand, a few hours in Delhi – one knows how energy is wasted in India and things like emissions are out of control.
I later corrected myself – I was talking about oil find by Cairn in Rajasthan. I worte some of my ideas on energy last night on my blog – please read.
I will be the first guy to say they need to aggresively survey Deccan traps and Bengal fan. I also have to credit to Mani Shankar Aiyar to bring energy issue on the forefront and at least confronting the problem. According to India Today, his ministry was running into road blocks from Natwar Singh’s foreign ministry and often Manmohan Singh had to intervene.
Countries like Japan and Russia with long history of mutual distrust and some level of dispute are in the process of making grand alliances for energy, and India has not done much beyond talking.
As usual, I come to this discussion way late, after seeing the original news article quoted on News.com, and then reading up on the Deccan Traps, and then finally (belatedly) thinking, has SM hit it? And true to form, you guys did way back when.
Some info, if anyone is interested at all anymore, since this topic is cold as a witch’s tit:
The Deccan Traps is a the largest volcanic geographic feature in the world. Its age coincides with the extinction of the dinosaurs to some degree, leading quite a few people to infer some level of causality: massive eruptions, meteor impact, etc.
But I have yet to find anything anywhere suggesting that there would be huge petrochemical deposits in that big igneous slag-heap. Has anyone else?
“Has anyone else?”
Not in the strictist sense. It is possible (only within a realm of possibility) that the sediments (the sediments that were deposited before the basalt/ igneous eruption) buried beneath the Deccan traps (slag heap, as you put it) may have oil and gas. However, there is no proof and right now it is just an idea. There are some preliminary imaging (geophysical) surveys underway to determine the geology of the area in detail to even evaluate such a hypothesis. However, it is very difficult to even image clearly beneath flood basalts (igneous rocks) – what to say about evaluating the fossil fuel potential?
The closest analogy comes to my mind is the new oil exploration work in deeper sedimentary deposits beneath the basalts in North Sea. However, North Sea has proven fossil fuel reserves, and they are looking for new ones and is quite a different scenario in terms of geology.
I think Mani Shankar Aiyar wants companies to have a closer look with fresher eyes – that’s pretty much it.
It definitely struck me the same way, Kush: an invitation to fish.
I can’t seem to find anything on the internet about the actual geology of the area that indicates that the basaltic intrusions may have petrochemical deposits. Are there traps with similar morphology elsewhere that make for promising prospecting? And what’s the company that owns the rights to the area, apart from the Indian government?
Finally, at least one article I’ve found indicates that the other likely K-T event crater sites (Chicxulub crater in Mexico, Boltysh crater in Ukraine, Silverpit crater in the North Sea, etc) are good hydrocarbon producing sites (The article actually says “among the best in the world”). What’s the physical science behind that? Why would an impact site be a good hydrocarbon reserve? The trapping / capping effect of the basalts on naturally occurring sediments, or some other principle I’m unfamiliar with?
The Government of India auctions leases. I do not know the details. ONGC, Reliance Energy, Nikko Resources, Cairn, Shell – all of them have leases in India. I think for Deccan traps, only ONGC might have leases just because it is a wild card right now. They are going to massive surveys there – this I know.
I’ll have to look if sediments beneath flood basalts elsewhere are being actively explored, like Karoo basalts (S. Africa), Afar basalts (Ethopia). I do not know. In $.60/ barrel world, every place is a game.
“Why would an impact site be a good hydrocarbon reserve? The trapping / capping effect of the basalts on naturally occurring sediments, or some other principle I’m unfamiliar with?”
Only trapping/ capping by basalts as you rightly said. Also, you have something unexplored because it cannot drilled that easily so there is a possibility of huge “pristine” discoveries. I think they are just new frontiers – like ultra-deep Gulf of Mexico in $60/ barrel world.