The Hindu Business Line : Ministry sees crude prices dropping to $45 by 2009-10

Chennai May 19 The Ministry of Petroleum and Natural Gas expects global crude oil prices to decline and stabilise at around $45-a-barrel levels by the year 2009-10, the Union Petroleum Secretary, Mr M.S. Srinivasan said on Saturday.

Delivering a lecture on energy security for the Indo-Japan Chamber of Commerce and Industry, Mr Srinivasan said the Ministry's assessment was based on the investments that are being made into exploration and production of hydrocarbons.

Exports

Observing that India had invested about Rs 30,000 crore in the last six-seven years in building up refining capacity of 160 million tonnes, Mr Srinivasan said petroleum products were the single largest item of exports in 2006-07. India exported 32 mt of petroleum products and earned $18 billion, he said.

Mr Srinivasan said the downstream oil sector was set to invest another Rs 40,000 crore in the next four years so as to be able to produce value- added products conforming to the advanced emission standards. He said by 2011, India's refining capacity would increase to 240 mt (from 160 mt now), which would give space for exporting 90 mt of petro products.

`Marginal surplus'

The Petroleum Secretary said India's production of natural gas would double to 200 million cubic metres a day in the next 15 months. India would then have "marginal surplus" in natural gas production. (He later told Business Line that with the increasing availability of natural gas, imported LNG was losing its sheen. "I would not be worried even if I am not able to sign a single contract for additional LNG," he said.)

The world today regarded India as "under explored" rather than "under endowed", he said, noting that even after six rounds of New Exploration Licensing Policy, only a third of India's sedimentary basins was explored.

Mr Srinivasan said the epicentre of hydrocarbon production was shifting from West Asia to Russia, Caspian and North Africa regions. This shift would bring in changes in geopolitical equations, he said.