India Diversifies Oil Sources, Boosts Refining to Shield Economy
Union Minister Hardeep Puri outlines India's strategy to diversify oil sources and expand refining capacity to shield the economy from global shocks.
In an era of volatile geopolitical tensions and unpredictable global markets, India is aggressively pivoting its energy strategy to safeguard its economic stability. Union Minister of Petroleum and Natural Gas Hardeep Singh Puri has revealed that the nation is diversifying its crude oil sources and expanding refining capacities to ensure that external shocks do not derail domestic growth.
Speaking at the Pathways to Viksit Bharat Conclave held at Shri Ram College of Commerce, Minister Puri emphasized that energy security is not just a policy goal but a necessity for the common citizen. He pointed out that conflicts in distant shipping routes can have a direct ripple effect, altering the operational costs of Indian factories and tightening the budgets of ordinary households.
Expanding the Global Oil Net
To mitigate the risks associated with relying on a few regions, India has significantly broadened its procurement horizon. Minister Puri disclosed that India has increased its sources of crude oil supply from 27 countries to 41. While the government facilitates these international energy relationships, the actual purchasing decisions remain driven by commercial entities focusing on competitive pricing and availability.
The Minister specifically highlighted the vulnerability of the Strait of Hormuz, through which a massive portion of the world's energy flows, as a prime example of why diversification is critical. He also noted that the government is closely monitoring emerging tensions in the Red Sea to ensure that supplies remain uninterrupted.
Boosting Domestic Production and Innovation
Beyond imports, India is doubling down on its internal capabilities to meet the rising energy demands of a growing industrial sector. Two key initiatives are leading this charge:
- Samudra Manthan Scheme: This initiative focuses on deep-sea oil and gas exploration. The government intends to provide the necessary resources for drilling 150 wells over the next three years to unlock India's domestic potential.
- Gobardhan Scheme: Aimed at sustainability and entrepreneurship, this scheme converts organic waste and agricultural residue into compressed biogas through investment support and assured offtake.
Powering the Future: Data Centres and Green Hydrogen
As India becomes a hub for global capability centres and massive data centres, the demand for reliable and uninterrupted power is expected to surge. Minister Puri stated that the future will require a strategic mix of conventional fuels, renewable energy, and green hydrogen.
On the front of green hydrogen, the Minister shared encouraging news regarding cost reductions. Thanks to successive tenders, the production cost has already dropped from approximately USD 5.60 per kilogram to below USD 3. He expressed confidence that costs will eventually slide further to around USD 2 per kilogram.
Refining Prowess and New Frontiers
India's role as a refining powerhouse continues to grow. Speaking with reporters, Puri noted that while India imports over 5 million barrels of oil per day, it also exports around 1 million barrels, a feat made possible by the expansion of its refining capacity.
Regarding potential new partnerships, the Minister mentioned that the government is exploring all possibilities with Venezuela. He noted that Venezuelan oil has returned to the market and highlighted that ONGC already possesses assets in the country, signaling a potential for deeper engagement.