India needs energy infrastructure

April 16, 2013 at 1:07 PM
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NEW DELHI, April 16 (UPI) -- India should consider developing infrastructure to deal with supply and demand issues in its energy sector, a Shell top executive said.

"On supply, India is already a significant component in the global energy consumption and is going to be 10-15 percent of global energy in the decades ahead. For that, you need to have infrastructure," Jeremy Bentham, vice president, Global Business Environment for Shell told India's Business Standard.

India's reliance on imports is about 80 percent for crude oil and 25 percent for natural gas. The country's energy demand is expected to more than double by 2035, from less than 700 million tons of oil equivalent now to about 1.5 trillion tons, says India's Oil Ministry.

Shell has called for a more robust investor friendly framework in India. Bentham's comments come as India's energy sector faces problems regarding pricing and contractual and allocation issues.

"As a business, we cannot do with an energy ministry. We have issues fragmented across different departments, each of which has its different agenda, which is not very well joined up here," Bentham said, referring to India.

Bentham said India should investigate how it can participate in the energy scenario of South Asia and Asia Pacific and also how it can take advantage of developments in global shale gas, so that India not only encourages domestic production but is also open to global opportunities.

India announced last month that it was preparing to launch its first auction of shale natural gas blocks but the government has not yet unveiled its policy for shale gas development.

Separately, Indian Foreign Secretary Ranjan Mathai said last week that India would continue to buy oil from "vital supplier" Iran.

Mathai said that import decisions are taken by the oil marketing companies on a commercial basis and the Indian government did not play a role in the recent decline in purchases from Iran.

Earlier this year, Indian Petroleum Minister Veerappa Moily said his ministry would work on an action plan to make India energy independent by 2030 through increased hydrocarbon production, unconventional resources such as coal-bed methane and shale, foreign acquisitions by domestic Indian companies and reduced subsidies on motor fuels.

In 2011, India was the fourth largest energy consumer in the world after the United States, China and Russia.

"India is predicted to be one of the world's largest economies but the road ahead is fraught with challenges -- where 80 percent of our energy is imported and many people still do not have access to electricity," Shell India Chairman Yasmine Hilton told the Business Standard.

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