India courts oil sands opportunity
Another Asian tiger looks to join the bitumen bonanza
As China continues to wheel and deal its way into the Canadian oil and gas industry, another Asian tiger is looking to join the petroleum party. In February, India sent a high level delegation that included the state’s petroleum secretary, S. Sundareshan, to Alberta to promote the country’s domestic oil and gas industry and to tour some oil sands operations. The delegation’s visit wasn’t publicized by India, the Alberta government or industry. But it also included officials from the state-owned goliath, Oil and Natural Gas Corporation Ltd., and Indian-based private sector companies like Reliance Industries Limited.
The visit is a clear sign that India is interested in getting more involved in Canada’s petroleum sector. That doesn’t surprise Rana Sarkar, president and CEO of the Canada-India Business Council. With 1.2 billion people and a rapidly growing economy, Sarkar says this petroleum-poor country needs access to more oil and gas to fuel a rapidly growing economy. India currently imports about two-thirds of the crude oil it requires. Alberta, with reserves estimated at 171.3 trillion barrels of oil and 77 trillion cubic feet of conventional natural gas, has large supplies of petroleum India desperately needs. “India has a huge energy deficiency and it needs to get better at procurement of supplies,” Sarkar says. “As there is this strategic race for resources globally, you are starting to see Indian companies coming out more.”
Coming out to Alberta accomplishes a couple of goals for the Indian government. For one, it raises awareness in Alberta’s active oil patch of investment opportunities in India. Sarkar says the government is scheduled to put exploration blocks up for sale in 2011 and it wants to drum up global interest in bidding on these blocks. “India desperately needs to develop an indigenous oil and gas industry. Not having one is a significant strategic disadvantage,” Sarkar says. “It needs overseas investment in the country and India is realizing it can’t do this on
The Alberta trip also allows India to explore how to get involved in the oil sands just as its Asian economic rivals, China, Japan and South Korea, have done. While some Canadians might grow concerned about even more foreign investment – and potentially, control – over the nation’s precious petroleum resources, India’s courtship does present significant advantages and opportunities for Canada’s oil and gas industry.
One perk is that India represents another huge market for Canadian producers looking beyond traditional buyers in the United States. Sarkar says closer ties with India could also provide job opportunities for oilfield services companies, as the country looks to contract Canadians to work on domestic oil and gas projects.