Fossil oil and natural gas meet 40% of India's energy needs and about 80% of petroleum products are imported annually to meet the growing demand. With one-sixth of the world's population, India's per capita energy consumption is estimated at 530 kg of oil equivalent (kgoe) which is significantly lower than the global average of 1800 kgoe. Per capita energy consumption in the world's most populous country and an emerging economy like China was 1430 kgoe in 2006, while that in another emerging economy, Brazil it was 1180 kgoe. In developed countries like US the per capita energy consumption was 7740 kgoe in 2006, while that in UK it was 3820 kgoe and in Japan it was 4130 kgoe.

To meet its development needs, India may have to depend upon 90% oil and 60% gas imports by 2030-31. Global prices of crude oil are volatile. In July 2008 it peaked to $ 147 a barrel and today it is hovering around $ 75 to $ 80 a barrel. The unpredictability of global crude oil market prompted the Indian external affairs minister, SM Krishna at the inauguration of the two-day 2nd India-Africa Hydrocarbons Conference (Dec 7, 2009) in Delhi to say: “Do we continue to treat hydrocarbon assets as a zero-sum game or in the true spirit of globalization ensure that they become part of a truly global, integrated, open and competitive energy market for the mutual and long-term benefit of producers and consumers?”

At present about 15% of India's crude oil imports come from Africa. Efforts can be made to increase crude oil imports from Africa at affordable prices and mutually beneficial terms. Africa, though lagging behind in the use of energy it produces would need to increase its energy consumption as its development programmes gather momentum. Hence though Africa rich in natural resources cannot be viewed as an energy surplus continent. India also needs more energy consumption. World's petroleum resources are on a decline and many not last for long. Burning of fossil fuels are contributing to global warming and climate change. Efforts should be made both in Africa and in India to go for an energy-mix policy including use of renewable sources like solar, wind and tidal energy, geothermal energy, hydrogen energy, ocean thermal energy conversion, nuclear energy and also eco-friendly hydro-power generation.

At 5.6 billion barrels of oil equivalent (boe), India's proven oil reserves are a meager 0.5% of the world's total placing it at 22nd position in the global oil map. India's existing domestic production of about 766,000 barrels of oil per day (bopd) is much less than its current consumption of 2,882,000 bopd, creating a wide gap to be met through imports.

Natural gas is about 8.6% of India's total energy basket, which is much below the world average of 24%. India's proven gas reserves currently stand at 1.09 trillion cubic metres, which are 0.6% of the world's total proven gas reserves and ranking the country at 25th in the global gas reserve map. At present gas production in the country is about 87 million standard cubic metres per day (mmscmd). Gas supply is currently constrained at about 107 mmscmd against an estimated demand of about 150 mmscmd. India meets three-fourth of its current demand from its own production and the balance is being met by liquefied natural gas (LNG) imports.

In 2008-09 there were 15 new discoveries of oil fields by public sector companies like ONGC, OIL and private and joint sector companies which would increase India's crude oil production by 11% to reach 36.708 MMT. The production of natural gas is likely to increase by 52.8% and touch 50.211 BCM. But the country would still have to depend upon imports to meet its energy needs.

Africa has recently got prominence due to numerous hydrocarbon discoveries, especially in the Gulf of Guinea. Combined with this is the low energy consumption in the continent (453 million tonne of oil equivalent in 2006) which makes it an attractive destination for sourcing energy products.

According to January 2008 data, Africa held proven oil reserves of about 125.6 billion barrels, representing about 10% of the total world oil reserves, fuelled primarily by the growing reserves in Libya and Nigeria. This trend is likely to continue due to new discoveries in Ghana, Sao Tome and Principe and Uganda. At present six African countries, Libya (OPEC member), Nigeria (OPEC member), Algeria (OPEC member), Angola (OPEC member), Sudan and Egypt together hold about 93% of the continent's total oil reserves. Other oil producing countries are Eq Guinea, Congo, Gabon, Chad, Tunisia, Cameroon, South Africa, Cote d'Ivoire, DR Congo, Ghana, Morocco.

In terms of net oil exports in barrels per day in 2006, major exports in order were Nigeria, Algeria, Libya, Angola, Eq Guinea, Sudan Congo, Gabon, Chad, Cote d'Ivoire, Cameroon, Egypt, Mauritania and DR Congo.

According to January 2009 data, Africa has about 14,654 bcm gas reserves, representing 7.9% of the world's total proven gas reserves. Nigeria, Algeria, Egypt and Libya together hold 91% of Africa's gas reserves. Africa's gas production has more than doubled over the last 10 years from 107.2 bcm to 214.4 bcm in 2008, contributing 7% to the world's gas production. Algeria, Egypt, Nigeria and Libya are major producers of natural gas. The African continent has rich deposits of mining resources including coal.

Can India be able to compete with other economies of the world including China to have access to these natural resources in Africa? Among the emerging economies, China has taken the lead by making its presence adequately felt in Africa. Nevertheless India has made a humble presence in the African hydrocarbon sector. Indian upstream companies have invested in exploration and production of oil and gas in Sudan, Nigeria, Libya, Egypt, Gabon, Congo Brazzaville, Nigeria-Sao Tome Joint Development Zone and Equitorial Guinea.
The public sector companies like ONGC Videsh Ltd has invested $ 2.5 billion in Sudan for oil exploration and production while Oil India Ltd has found upstream opportunities in Libya and Gabon. Another public sector, GAIL India Ltd has invested $22 million in three Egyptian companies for distribution of LPG and CNG. ONGC Videsh Ltd is planning to set up a Greenfield refinery in Nigeria. An Indian company has invested in a major refining hub in South Africa. Some Indian companies are engaged in retailing of petroleum products, building of storage terminals, upgradation of refineries, training and consultancy services in Africa. ONGC Videsh Ltd has formed a number of joint ventures with foreign companies and currently holds interests in 25 oil and natural gas projects in 15 countries in Africa, Asia, Latin America.

India's attempt to source gas through international pipelines like Iran-Pakistan-India pipeline, Turkmenistan-Afghanistan-Pakistan-India pipeline, Myanmar-India pipeline and Bangladesh-India pipeline is yet to materialize.
India needs to carefully play its cards in the global oil politics, more so it needs to be extra careful in dealing with African nations. Africa has sounded its top priority is sustainable development remaining mindful of resource constraints, environmental concerns and imperatives of economic development.

India should act as a partner in development of Africa on basis of mutual benefit. The Indian minister of state for petroleum and natural gas, Jitin Prasada rightly summed up in his valedictory address at the 2nd India-Africa Hydrocarbons Conference on December 8, 2009 by saying : “while pursuing mutually beneficial projects in Africa, we should also take up community development programmes there for inclusive growth.”

India and Sudan inked a MoU for cooperation in oil and gas sector on the occasion. The Sudanese minister of state for energy and mining, Angelina Jany Teny said that she preferred Indian investments with the hope that it would be based on mutual benefit unlike the experiences of traditional structure of global investment in oil sector. Indian company ONGC Videsh Ltd is a leading player in many oil consortium in Sudan but a Chinese company bagged the order for upgradation of the Khatron refinery.

Sudan has rift basins like Malgad, Melut, Blue Nile, Mardi and Red Sea basins. It is divided into 22 exploration blocks. Exploration and production sharing agreements have been signed for 17 blocks. Teny invited India companies to participate in bids for three remaining blocks. Gas reserves are also being discovered in central Sudan and Red Sea. The Sudanese minister reflected upon the opportunities for cooperation for HSE functions of the hydrocarbon sector.
“We are in the process of reviewing oil contracts in terms of environment protection and production,” she said.

One of the main reason why the underexplored country like Sudan is seeking bilateral cooperation is due to the US embargo, particularly in oil exploration and production. “We are trying to resolve this political issue that led to the embargo. We are engaged in a dialogue with the US,” she said.

This a good opportunity for India to step up bilateral cooperation with Sudan. But the existence of Sudan is at stake. A referendum in Southern Sudan is due in 2011 and hence this referendum would decide whether this region would remain with Sudan. Southern Sudan has rich deposits of oil while facilities are located in Northern Sudan. However, Teny assured that under any circumstances the signed agreements would be honoured.

Regarding bids for exploration and production, many African countries have begun reforming their petroleum sector. Indian companies need to carefully understand the African process, procedures and the regulations in each of the African nations. The best option would be for seeking joint ventures between public sector oil companies of India and African countries so that buy back arrangements for crude oil and LNG came be made on mutually beneficial terms.

Many African countries are welcoming investments in upstream, middle stream, down stream, setting up of or upgradation of refineries, setting up of cross-country pipelines, terminals and depots and consultancy services. Indian companies are capable of availing these opportunities. India has developed expertise in oil refining and today the world's single largest refining complex is not in the US or in West Asia, but is in India at Jamnagar in Gujarat. India's installed refining capacity has gone up to 178 million tonne in 2009. India has been able to partly offset its foreign exchange outgo by exports of petroleum products valued at $ 25 billion. The Engineers India Ltd is ready to share its expertise with Africa in areas like petroleum refineries, infrastructure, laying of offshore and onshore pipelines.

Apart from offering market for African petroleum products, including LNG, India needs to undertake development of Africa as an equal partner. Though Nigeria is a major producer and exporter of petroleum products, it suffers badly from electricity shortage. As energy crisis would become more acute in both in Africa and in India as the development process gather momentum, it would be better to go for an energy-mix policy including the use of renewable sources like like solar, wind and tidal energy, geothermal energy, hydrogen energy, ocean thermal energy conversion, nuclear energy. India can help Africa with its expertise in the renewable energy sector.

Speaking at the 2nd India-Africa Hydrocarbons Conference, the special advisor to the Nigerian President, Dr Emmanuel O Egbogah invited Indian companies in his country's oil and gas sector and informed about the changes being brought about through the new Petroleum Industry Bill pending before the National Assembly. Nigeria has formulated a Gas Master Plan.

Angola's vice minister for petroleum, Jose Gaualter dos Remedios invited investments in transportation and distribution of gas and engagement of people in the new refinery. Gabon's minister for mines, petrol and hydrocarbons, Nkoghe Bekalen Julian sought help for development of infrastructure for liquefaction of gas and for setting up of petrochemical plants. He invited Indian companies to bid in the mining sector. Oil has been discovered in the coastal sedimentary basin of the country. Gabon has rich deposits of platinum, potassium, iron ore, gold and diamond.

Ghana's deputy minister of energy, Emmanuel Armah Kofi Buah lauded India's help in rural electrification. He cited investment opportunities in the four main basins namely East, West, Central and Voltaian basins. Jubilee Field has been discovered in the deep sea. It has 800 million barrels of recoverable oil and 17 wells are planned to be drilled in the first phase which begins in 2010, while the second phase of operation would be in 2012-13.

The executive director of the Algerian public sector, Sonatrach, Benhammou Mohammed said his country was interested in building a top position in Atlantic Basin in upstream and down stream sectors. Algeria has partnered with two Indian companies for exploration in Libya. The chairman of the Egyptian Natural Gas Holding Company, Mahmoud Latif said that his country has invited two Indian companies - Alkor and GSPC - to invest in areas of geological surveys, exploration and production of oil and gas, hydropower generation and coal sector. Egypt has reserves in the Mediterranean, Nile Delta and North Sinai. About 24 gas discoveries have been made since July 2008.The general manager of Nigeria's Oando Plc, Olu Ogunfowora invited Indian investments in the down stream sector The CEO of East Africa Essar Energy Ltd, Alok Sinha called for Indian investments in refinery's downstream sector like captive power plants and also capacity building.

Benin's minister for petroleum and mineral research, Barthelemy Kassa informed that researches were being carried out in the coastal sedimentary basins. He invited Indian companies in some specific blocks. Kenya's assistant minister for energy, Mohamed M Mohamud informed that 15 blocks are currently available for bidding. He invited Indian participation in jetty construction, upgrading of refining technology, expansion of pipelines and additional storage facilities. Tanzania's minister for energy and minerals, William Mganga Ngeleja informed that two new gas fields - Mkuranga and Kiliwani - were expected to be developed. He solicited help for construction of petroleum pipeline from Dar es Salam to Mwanza. He invited Indian participation in infrastructure, gas-based power plants, fertiliser and cement units, coal-to-liquid technology for methanol production, CNG/PNG for domestic and transportation needs, export of natural gas and setting up of LNG terminals in PPP mode.

Uganda minister for energy and mineral development, Hilary Onek emphasised the need for petroleum production in 10 explorable blocks of Albertine Graben. He said that his country intends to develop medium to large refineries, implement short to long-term plans for developing resources and develop power sector through private sector participation.

Africa has much to give to India and the rest of the world provided the partnerships are on basis of mutual benefit and aiming at Africa's development, not exploitation. The African leaders have made this clear in different such fora hosted by India. India too has responded by announcing $ 5.4 billion loan for development of Africa, supported by $ 500 million in grants for capacity building, doubling of scholarships to African students studying in India, increasing capacity building positions under India's International Technical And Economic Programme and a duty free tariff preferential scheme to encourage African exports to India. Yet much needs to be done to bring both sides to an effective mutual cooperation.