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Last Updated: Monday, 28 November 2005, 12:41 GMT
Concerns over Indian oil output
Indian petroleum minister Mani Shankar Aiyar
Mr Aiyar says he has a duty to think about energy security
India's Oil Minister Mani Shankar Aiyar has raised concerns about the country's future energy supplies, amid falling oil output at its main energy company.

The minister warned that output from the Oil and Natural Gas Corporation's (ONGC) current fields may fall sharply, creating significant future problems.

India's largest energy company sought to ease government worries and pledged to double its reserves by 2020.

ONGC said new discoveries and better technology would boost reserves.

Energy security

ONGC's oil output has stalled at about 520,000 barrels a day in the past couple of years and is expected to decline as older fields near the end of their productive lifespan.

Mr Aiyar voiced concerns about a fall in domestic output at a time when India's rapidly expanding economy is fuelling huge demand for energy.

There is nothing to feel alarmed about
Oil and Natural Gas Corporation

"The decline in anticipated output from existing fields is going to assume increasingly significant proportions," he said.

"I will be failing in my duty if I didn't draw the attention of the country to some of the alarming facts about ONGC and energy security in the immediate future."

Nearly 20% of India's estimated oil reserves remain undiscovered, Mr Aiyar said, while ONGC's record in finding new reserves was patchy.

Clear vision

In response, ONGC - which is majority owned by the Indian government - said it had discovered five out of India's six oil producing basins and that prospects for future discoveries were "very encouraging".

"There is nothing to feel alarmed about," an ONGC spokesman told the BBC. "ONGC has a clear vision and plan for providing oil security to the country."

Discovery of new reserves and improved technology would enable ONGC to double its energy reserves to 12 billion tonnes by 2020, he added.

India is struggling to meet its burgeoning energy needs with annual demand for power expected to grow 5% over the next two decades.

The government announced plans on Monday to import 20 million tonnes of coal in 2006-7, a 30% increase on current totals.

Market highs

ONGC and other Indian energy firms are increasingly looking abroad to develop new supplies.

It recently teamed up with steel producer Mittal Steel to secure oil exploration rights in Nigeria in return for a huge investment in infrastructure in the oil-rich African country.

India's thirst for oil has pushed ONGC shares to record highs in recent months, mirroring an across the board rise in Indian shares.

Shares on the Mumbai (Bombay) Sensex broke through the 9,000 barrier, setting a record on Monday before falling back slightly. At the end of trading the index was 1% higher at 8,987.40.

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