INDIA AND ITS OIL AND GAS INDUSTRY
The Indian economy has performed strongly over the last few years, with the Reserve Bank of India estimating growth in GDP at 9.1 per cent. during the fiscal year 2007/8 (Source: Macroeconomic and Monetary Developments Mid-Term Review 2007-08, Reserve Bank of India). This rapid economic growth has led to a significant increase in demand for crude oil and natural gas, to the extent that India is currently the sixth largest consumer of oil and gas (Source: BP Statistical Review of World Energy, June 2007). In 2006, India’s world share of crude oil and natural gas consumption was 3.1 per cent. and 1.4 per cent. respectively (Source: BP Statistical Review of World Energy, June 2007). India is a net importer of crude oil and natural gas. In 2006, India consumed 2.58 million barrels per day of crude oil, yet it produced only 0.81 million barrels per day. Similarly, in 2006, India consumed 1.4 Tcf of natural gas, but produced only 1.1 Tcf (Source: BP Statistical Review of World Energy, June 2007).

India started importing gas via LNG in 2004 at the Dahej terminal on the west coast of India. In 2006 India imported 282 Bcf of LNG. Upstream activity continues to remain at high levels with 42 active offshore rigs and several seismic vessels engaged in operations offshore on the east and west coasts. Several significant discoveries have been announced since the NELP was introduced. The commercial discovery of the Dhirubhai field by Reliance in the deepwater Krishna Godavari basin has demonstrated the existence of significant reserves in the basins of India.

India’s regulatory framework has no restriction on repatriation of profits outside the country and the legal framework is based on British common law, which helps to attract non-Indian companies to operate in the
region.