Oil Import dependency to rise to 87.3 % by 2012

India's dependence on crude oil import will rise up to 86.3% by 2011-12 from 78.3% at present (2006-07), considering the current level of domestic crude production, Minister of State for Petroleum & Natural Gas Dinsha Patel said on Tuesday.

The projected dependence would be lower, if new finds materialize under the New Exploration Licensing Policy (NELP), he told the Rajya Sabha.

Patel also said that India's refining capacity of 148.97mn tons (MT) during 2007-08 will increase up to 235MT at the end of the 11th Five Year Plan (2007-12). The requirement will be met by importing 198MT of crude oil by 2011-12.

In a reply to another question, Patel told the Upper House that the demand of petroleum products in the country for the terminal year (2011-12) of the 11th Five Year Plan is estimated to be 131.8MT.

Stating that the refinery sector was de-licensed in June 1998, Patel said that since then a refinery can be set up anywhere in India by private or public sector enterprises depending on the promoters' assessment of its viability.

Regarding the demand of natural gas, Patel said that according to a report by a Working Group on Petroleum & Natural Gas for the 11th Five Year Plan, the demand for natural gas in India is projected to increase from 179.17mn standard cubic meters per day (MMSCMD) in 2007-08 to 279.43 MMSCMD in 2011-12.

According to the report, LNG import is projected to increase to 23.75mn tons per annum (MMTPA) by 2011-12. An investment of about Rs400bn has been projected in the natural gas sector during the 11th Plan period (2007-12).

The Government of India has adopted a multi-pronged strategy to augment supplies and to bridge the gap between supply and demand for the domestic market through :

• Intensification of domestic Exploration & Production activities under NELP
• Exploitation of unconventional gas, like Coal Bed Methane (CBM)
• Implementation of National Gas Hydrate Programme (NGHP) for evaluation of hydrate resources and their possible commercial exploitation
• Import of gas as LNG, and implementation of transnational gas pipelines.