India is looking like the oil patch's new China.
With federal and Alberta government officials traipsing around there, renewed talk of Indian oil and gas investments in Alberta and a new outlook showing India's energy demand ballooning in the next 20 years, a game plan is taking shape for the subcontinent.
Two things that Canada's energy industry sorely wants following a difficult year are investment capital and big new markets, so India could well represent the promised land.
The trick will be not repeating missteps that occurred during the courtship with China that have led to some disappointments there, including investments by state-owned oil companies that are slow to start paying off, and a halt in deals.
Alberta Premier Alison Redford and federal Natural Resources Minister Joe Oliver, along with several of their charges, have made the rounds in Mumbai and New Delhi this week to talk energy and other things with Indian officials. Ms. Redford opened a new Alberta trade office in the Indian capital.
So far, India isn't a major market for Canadian oil and gas, but judging from BP PLC's annual global energy outlook, released on Wednesday, the opportunity is huge.
According to that forecast, India's energy demand is on track to rise 132 per cent by 2035 – outpacing the other "BRIC" developing economies, Brazil, Russia and China, by a wide margin. At the same time, domestic production of all forms of energy will slightly more than double.
Oil imports, meanwhile, will climb 169 per cent and natural gas imports 573 per cent. Hence the trade missions from Edmonton and Ottawa, as the sector seeks to build a liquefied natural gas industry on the West Coast and pipe oil-sands crude to the East.
Ambitions of Canadian producers to supply India are moving to the fore as TransCanada Corp. pushes ahead with its planned Energy East pipeline to Saint John, N.B., from Alberta.
The $12-billion conduit would feed a deep-water port for supertanker shipments to refineries that have previously been too far from Alberta, including one of the world's largest, Reliance Industries Ltd.'s Jamnagar plant on India's West Coast. Industry brass hope Energy East will face less opposition to pipelines, as has been the case with to the West Coast or through the U.S. heartland, though that remains to be seen.
Meanwhile, Indian companies have scoured the globe for oil and gas reserves, logging around $100-billion worth of deals in the past two years, according to a Thomson Reuters tally.
Its intentions for Canada have been a riddle, though.
For the past decade, officials from various state-owned firms have said that, if there is one resource they want to fork over a few billion dollars for, it's the Alberta oil sands.
Indian companies have been rumoured suitors in countless asset sales. A trio of Indian oil companies were reportedly bidding $5-billion in an auction for ConocoPhillips oil-sands properties in 2012, but the buzz died down shortly after Ottawa instituted stringent restrictions on oil-sands acquisitions by state-owned enterprises.
So, India has remained on the sidelines to date, though talk of a deal has picked up as Ms. Redford and Mr. Oliver have been in India.
"Nothing is guaranteed but I'm hoping we'll see some substantial investments. And you know, when they come they're likely to be substantial," Mr. Oliver told reporters in a conference call from Mumbai on Wednesday.
Indeed, Akhil Verma, the country manager in Canada for ONGC Videsh Ltd., the overseas arm of state-run Oil and Natural Gas Corp. Ltd., said India is still very much in the hunt.
"The fact remains that India is still looking at Canada with interest. The only thing is that the dotted lines have not been signed until now. That's it," Mr. Verma said.
However, a problem for the Harper government has been mixed signals to would-be foreign buyers. It spent years beating the bushes in China and other East Asian countries for investments, then closed the door to acquisitions for all but minority stakes in the oil sands by state-owned enterprises. The new rules created uncertainty for acquisitions of other resources as well.
Following China's investments, some of its executives have complained about the delays in getting pipelines approved to move supplies to market.
Getting these problems solved could help India decide whether to move from tire-kicker to buyer.