India is urging its oil companies to expand overseas to meet the soaring demands of its growing economy. India 's massive dependence on imported oil has prompted the country to look for energy assets overseas.
Prime Minister Manmohan Singh told a petroleum conference Monday in New Delhi that over the coming decade, India 's demand for fossil fuels is set to increase massively. He said domestic production, though rising, will not keep pace with this demand.
"In India, the demand over the next 10 years will increase by about 40 percent, whereas the increase in supply from the maturing oil fields is expected to be about 12 percent," said Sing.
Mr. Singh told delegates that India 's state-owned oil companies will search for energy assets overseas. "Indian government is therefore encouraging all national oil companies to pursue equity oil and gas opportunities overseas. For these reasons we seek to build strong economic partnerships with other producing countries, and their oil and gas industries, to the mutual benefit of all us."
The push to acquire overseas oil assets already has acquired momentum in a country that imports about 70 percent of its energy needs. This year, India 's oil minister, Murli Deora, traveled to several countries, including Nigeria, Uganda, Sudan, Angola and Venezuela, to lend diplomatic support to the search for oil and gas fields by state-owned companies.
India 's Oil and Natural Gas Corporation is planning to borrow $10 billion over the next decade to buy overseas assets, according to media reports. The government also has increased to $1 billion the amount that state-owned companies can spend on acquisitions without government approval.
The hunt for sources of oil overseas has acquired a new urgency as India races to catch up with China, which has spent billions of dollars in acquiring oil assets in several countries. India 's oil companies have often lost out to China in the past while bidding for overseas assets. Energy experts say this is partly because China 's bids are backed by offers of aid, investment and loans to countries with oil assets.
As India, too, gives political backing to its bid to secure oil assets, Prime Minister Singh said hydrocarbons will continue to be India 's major source of energy for quite some time in the future.