Top export sector


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Though India's oil exploration and production industry is among the better managed  segments of the public sector, increasing decontrol of this industry is on the cards.


Oilfield equipment and supplies

(in US$ million)
Oilfield equipment & supplies 1995 1996 1997*
Total market size

2,990

3,570

4,030
Locally manufactured 3,780 4,460 4,860
Total exports 1,080 1,230 1,470
Total imports 290 340 640
Exchange rate: US$1 = Rs. 32.75 34.95 35.00
Source: Independent studies
*1997 figures are estimates

 
Promising sub-sectors 1997* market size (US$ mn)
Seismic survey equipment and services

1,310
Offshore/onshore drilling equipment

1,060
Offshore logistic support services and equipment

690

Points to note:

  • Crude oil imports constitute more than 35 per cent of India's total import bill which India wants to reduce.

  • The Oil and Natural Gas Commission (ONGC) is the flagship of India's oil and gas sector and is counted among the more efficient public sector companies. But decontrol and opening up the sector has been recommended by a 1995 official committee's report titled "Hydrocarbon Perspective: 2010." The report was well-received by the government of the time as well as by Parliament.

  • The government and all political parties are generally committed to maintaining a 7-8 per cent annual GDP growth for many years into the future. Even if performance falls below target, a GDP growth rate of 5-6 per cent is almost certain to be achieved and sustained. Indian economists agree that a 6 per cent GDP growth rate requires a 9 per cent increase in energy production. Thus, the growth prospects for the oil sector are excellent.

  • But for such growth to come about, technology, capital and better management are called for. This heightens prospects for imports of equipment, services, technology and capital.

  • The writing on the wall is that exploration rights will be increasingly given to both the domestic private sector and foreign companies.

  • Exxon, Shell and Chevron are among the foreign oil majors present in India.

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