India must rethink dependence on Middle East for energy, build large reserves: ONGC chief

New Delhi: As the West Asia conflict pushes global energy markets into their worst supply crisis in recent decades, Oil & Natural Gas Corporation’s (ONGC) Chairman Arun Kumar Singh called for a hard reset in India’s energy strategy — urging the country to rethink its dependence on the Middle East for energy supplies, “chase every drop” of domestic oil, gas or coal “at any cost” and build large strategic reserves.

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Speaking at an industry event organised by PNGRB, themed ‘Energy Security: Driving India’s Next Wave of Gas Demand,’ he said, “Thinking that the Middle East is the nearest to us and therefore, all their resources are with us… that assumption… we should take with a pinch of salt.” India relied on the Middle East to meet nearly half of its crude oil requirement, 30 percent of natural gas demand and around 90 percent of Liquefied Petroleum Gas (LPG) demand. The West Asia conflict led to the closure of the Strait of Hormuz, a critical global chokepoint through which a fifth of the world’s energy supplies traverse, for the first time in history.

A shift in world order

Referring to a shifting world order, the ONGC CMD said that rising geopolitical conflicts are questioning long-held beliefs about energy security. “If the world gets more and more de-globalised, we have more and more problems,” said Singh.

Calling the geopolitical landscape increasingly fragmented, the ONGC Chairman said that in a world, where there are multiple powers, a war of supremacy is fought everyday. “We should be prepared to see more and more of this,” said Singh.

India’s place in a fragmented global order

Singh said that due to the rise of protectionist policies and resource nationalism, India, as a large importer of energy supplies, is especially vulnerable it needs to reset its energy security strategy. “No country wants you to take away his oil. He wants you to take away his money, not oil,” he said. Stressing on the need to increase domestic production of all forms of fuel available within the country, he said, “We must chase every drop of oil or gas or coal, wherever it is available, at any cost.”

“We must have big storage. We must now address this (storage), whatever it takes. Be it underground, be it above ground or salt tavern,” said Singh. And he also called for diversification of supply chains for all forms of energy that needs to be imported.

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Despite global disruptions, Singh said India has managed the fuel crisis effectively. “You should be very proud of what the country has done,” he said.

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