Oil and Gas Marketing in India
Market Entry to India > Oil and Gas Marketing in India
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A management consultancy firm advising American companies how to increase revenues and reduce costs by leveraging the economies of China and India.
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The Indian petroleum industry is one of the oldest in the world, with oil being struck at Assam in 1867, nine years after Col. Drake's discovery in Titusville. Not only is India's market potential huge, but in recent years India has emerged as one of the most promising regions in the world with major oil and gas discoveries, both onshore and offshore.
Against a crude oil production of about 37 million tons per annum (MTPA), India’s consumption currently exceeds 125 million tons. To provide energy security, India is seeking investments in excess of $100 billion in both the upstream and the downstream sectors during the next 15 years. India’s petroleum product consumption has grown by 4-5 percent over the past 10 years and the oil demand in India is expected to rise to 368 MTPA by 2025.
With the widening gap between demand and supply, both for oil and gas, the outlook for the upstream sector is extremely positive. While oil and gas will continue to play a substantial role in the total energy mix, the need for harnessing alternate energy sources like Coal Bed Methane (CBM) and gas hydrates will become crucial to balance the demand and supply.
The Government of India announced the eighth round of bidding under the New Exploration Licensing Policy (NELP) on April 9, 2009, which includes 70 oil and gas blocks and 10 areas for extraction of coal bed methane (CBM) gas from below the coal fields under CBM-IV. The blocks include 24 deep-sea blocks, 28 shallow water blocks and 18 onland blocks. Of the blocks offered so far, 49 oil and gas discoveries have been made in Cambay onland, the North East Coast and the Krishna Godavari deep-water areas, asserting over 600 million tons of oil and equivalent gas reserves. Seeking a cut in oil import, India so far has awarded 203 oil and gas blocks in the previous seven rounds of NELP with over $11 billion committed in exploration. In the first six NELP rounds, 162 areas with an investment commitment of $ 8.33 billion have been awarded. Out of the $8.33 billion, $3.887 billion has already been spent by oil and gas till 2007.
India’s sedimentary basins are still relatively under-explored in comparison to the U.S.; this translates into greater potential opportunities for investors. In terms of mitigating the inherent risk in such ventures, India has taken steps to make its exploration blocks more attractive to the prospective investor. Based on input from the petroleum industry, India has revised its model production-sharing contract and has streamlined the bidding and review process.
The focus of oil refining companies has shifted to clean fuels as per current environmental standards. Clean fuel technology is in great demand. Also, with greater liberalization and ensuing competition, oil-marketing companies are wooing the retail customer. In addition to new outlets, existing retail outlets are being modernized with refreshing signage, and the establishment of mini-malls. U.S. companies engaged in the design of gas stations, vending machines and development of concessionaires will find clients among the downstream oil companies.
| US $ million | 2008 | 2009 | 2010* |
| Market Size | 2480 | 2520 | 2900 |
| Local Production | 1880 | 1910 | 2130 |
| Exports | 380 | 430 | 580 |
| Imports (Global) | 980 | 1040 | 1350 |
| Imports from US | 350 | 480 | 760 |
Statistical data are unofficial estimates from trade sources and industry
*2010 figures are estimates
The Indian oil and gas industry has traditionally been more open to imports than other segments of the economy. The U.S. is the leader in the import market segment, with close competition from the U.K., Japan and Korea. Since India uses American Petroleum Institute (API) specifications, U.S. manufacturers have an edge over their foreign competitors.
Our Services
Amritt’s go-to-market service for India helps with developing and executing roadmaps to expand your presence:
• Feasibility Studies & Financial Analysis
• Facilitating joint venture and technology transfer/trademark agreements
• Foreign Direct Investment policy compliance
• Negotiation with Indian counterparts
• Attracting and retaining top business development talent
• Avoiding cultural gaffes
