(EnergyAsia, November 5 2017, Sunday) — Energy experts have cast doubts on the Indian government’s plan to boost domestic oil and gas production over the next five years, never mind the long term.

India relies on imports to meet over 80% of its domestic oil demand and half its natural gas consumption, both of which are growing at rapid rates to fuel its economy.

The government of Prime Minister Narendra Modi has set a target to reduce oil imports by 10% by March 31, 2022 from current levels. For the year ending March 31, 2017, India imported 213.9 million tonnes of crude and 36.3 million tonnes of refined products.

By liberalising the country’s upstream sector to foreign and private capital, the government wants to reduce the national dependence on imports.

The Ministry of Petroleum and Natural Gas has projected India’s oil consumption to rise by an annual rate of just under 4.5% from 197 million tonnes in 2017 to 245 million tonnes in 2022.

The country’s natural gas demand will grow by an annual rate of five percent over the next 20 years to make India the world’s largest liquefied natural gas importer by 2035, said consultant Wood Mackenzie in a report last April.

The UK firm said India will have to focus on boosting production from existing fields if it is serious about reducing import dependence over the next five years. The government must step up now to attract much-needed foreign expertise to tap the country’s mostly ageing and marginal fields.

Elaborating on this point, CEO Neal Anderson told Bloomberg that India will not meet its production goals just by opening up exploration to foreign investment due to the long lead time to develop any new finds.

Indian oil companies have one of the industry’s lowest recovery rates in tapping producing fields, with state-owned ONGC leading with just about 27%. Using enhanced oil recovery technology, US firms claim to be able to boost production from ageing fields by between 30% and 60%.

The Center for Strategic and International Studies (CSIS) has been just as negative, stating that the Modi government’s new policy moves to open up and liberalise exploration opportunities will only “have a small impact on India’s oil and gas supply and demand balance.”

The Washington-based think tank questioned if the limited reforms will be sufficient to attract investments amid the “fierce” global competition for capital and budget cuts by companies in the face of the recent tenuous oil price recovery.

“India’s upstream oil and gas E&P policy has been subject to criticism, with protectionism and government red tape being blamed for lackluster development of oil and gas upstream,” it said.

Since July 1, international companies have been allowed to bid for access to explore for oil and gas in 2.8 square km of sedimentary basins under the liberalised Hydrocarbon Exploration and Licensing Policy (HELP) programme. The petroleum ministry will review the bids and decide if it will make any awards before launching the next round of bidding from January 1.