India aims to attract $25bn of investment in natural gas and crude oil in the next few years with the help of sweeping reforms to its exploration and production rules announced last week.
Dharmendra Pradhan, minister of state for petroleum and natural gas, said the new hydrocarbon exploration and licensing policy (Help) and a liberalized gas price regime would help reduce India's heavy dependence on imported energy over the next 10-15 years.
Basing his calculations on a crude oil price of $45 a barrel, he said the principal aim was to increase domestic gas production at a time of rising demand and falling output. "Forty billion dollars of hydrocarbons will be unlocked for production through this policy reform," he said in an interview. "To realise this amount we are expecting investment of more than $25bn in the next two to three years."
The government had previously said it expected to monetize unexploited gas reserves of around 6.75tn cubic feet, worth more than $28bn, from existing and future discoveries.
Businesses and industry analysts welcomed the changes, although some were skeptical given the recent collapse of the oil price and a reluctance to expend capital on high-cost projects.