India seems to be a desirable market for foreign investments, despite not having very large oil and gas reserves. According to a recent poll by Ernst & Young, five countries - Norway, Canada, Qatar, India and the United Arab Emirates - emerged to have favourable conditions for US investments in the energy sector.
Though India has the smallest oil and gas reserves with just 10 billion barrels oil equivalent (BBOE)of all countries , its rapidly growing economy and favourable foreign investment policies have helped India to attract significant oil and gas investments. According to the E&Y poll, major investment opportunities exist in development of transmission pipeline grid, local distribution networks, downstream refining, in particular setting up Export oriented units, marketing of petroleum products etc.
The E&Y poll was conducted on 10 countries including China, Indonesia, Nigeria, Russia, Saudi Arabia These nations were rated on economic stability and tax administration, government structure and accessibility, legal and regulatory systems, infrastructure in place to support oil and gas operations and availability of educated and skilled workers.
The five countries, which received a 'green light' in the poll, had all received a score of 80 percent or more under the said categories. India has a score of 84 %.
E&Y team in India also reported some deficiencies in respect to workforce education and frequent political protests, reliable Electric power systems etc. But the E&Y poll stated that with its population surging-it is expected to surpass China by 2020-even if the Indian economy were to stagnate, its consumption will increase, and drive exploration and production of its 10 BBOE.
Source: The Business Line
