The global oil and gas industry is reinventing itself in search of an optimal trajectory into a sustainable future. The good news in 2017 was a return of cautious optimism across the industry. According to Barclays’ latest E&P Spending Survey, the capital expenditure of the oil and gas sector is expected to increase by as much as 7 per cent.

While it is widely believed that US shale has provided flexibility and a balancing effect to the market dynamics, its impact appears to be moderated in 2017. OPEC production cuts are slowly providing responsible pricing windows for fresh investments to look up.

The gas segment is definitely going to be in a sweet spot for a long time. LNG prices are quite attractive and natural gas, with a low ecological footprint, is gaining a bigger share in the changing energy mix.

The refining sector is facing another dilemma. With changing product demand and likely projections for the future, a clear emerging trend is that the refineries of the future would be large and flexibly configured, with integrated chemicals and petrochemicals plants.

As regards the emerging threat from renewables and EVs, it is seen that the Governments are pushing these initiatives with more regulation, subsidy and impetus to R&D. However, the industry is confident of living harmoniously with these new trends. The consensus is that the immediate solution lies in cleaner fuels and higher engine efficiencies, besides commercialisation of horizon technologies.

The oil and gas sector must help catalyse the sustainable evolution of the energy sector. Its own longevity and profitability depends on its adaptability and its flexibility to integrate other forms of energy as complementaries and not adversaries.

India remains one of the fastest growing major economies in the world and has emerged as the third largest consumer of petroleum products, after US and China. The unprecedented low-price regime in crude oil prices in the past three years has helped the Indian oil & gas sector. We have effectively deregulated almost all petroleum products.

We have facilitated energy access across socio-economic divides through customer-focussed innovative initiatives like PaHaL, GiveItUp and Pradhan Mantri Ujjwala Yojana.

India is a net exporter of petroleum products and the world’s largest integrated refinery-cum-petrochemicals complex being set up on the west coast, will firmly establish our credentials as a regional refining hub.

(The writer is Chairman, IndianOil)