India aims to invest in producing oil and gas fields abroad to compensate for falling domestic output and to help reduce the impact of oil price volatility, the oil minister said on Tuesday.
India, the world’s third biggest oil consumer, imports about 80% of its oil needs, making it highly susceptible to crude price swings.
“Today we are very much focused to invest in producing fields,” Oil Minister Dharmendra Pradhan said, adding that the eastern part of Russia was an area “we are concentrating on.”
He said India was negotiating with Russia’s Rosneft to invest in eastern Russia.
Price volatility was a major challenge for India, the minister said, adding that “the changing geopolitics is creating anxiety, creating uncertainty that affects commodity prices.”
Indian firms have invested in foreign oil and gas assets, but many of these assets are still under exploration or not hitting production goals.
“At some point of time India was investing in African countries where a lot of geopolitical challenges were,” he said.
Pradhan said the acquisition by Indian investors of stakes in producing fields in the United Arab Emirates and Russia’s Vankor field had started adding to corporate revenues.
In addition to talks on oil investment, the minister said India and Russia were planning a maritime link from Vladivostok to eastern India. High transport costs have made Russian crude expensive for Indian refiners.
Pradhan said India was also investing in infrastructure to encourage the use of natural gas, which produces lower emissions than oil and coal, helping the country reduce pollution and providing a buffer against more volatile crude prices.
“We are rebalancing the hydrocarbon portfolio by giving more thrust to natural gas and other green alternatives,” he said.