India's Energy Dilemma Prompts Energy Diplomacy

In order to provide the energy needed for India's rapid economic growth, India's series of diplomatic initiatives are increasingly tilted towards the oil and natural gas field and are becoming increasingly pragmatic. “India’s energy gap must be resolved by accelerating overseas development,” Indian Petroleum and Natural Gas Minister Ayal (middle in Figure 2) said at the International Petroleum Conference held in New Delhi earlier this year, showing India’s stance of pursuing pragmatic energy diplomacy.

It can be said that India will do its best to develop relations with any country that India believes may become its energy supplier or energy channel, regardless of their past relations with India and regardless of their reputation on the international stage.

Wherever there are oil fields, there are Indian companies bidding, and wherever there is natural gas, there are smiling faces of Indians.

Energy has always been a bottleneck restricting India's economic development. This contradiction was not very prominent in the 1990s. In the 21st century, if India wants to continue to maintain a high growth rate of 7% per year, it is obviously impossible to rely solely on India's domestic oil demand.

In early March, the Prime Minister of India invited President Chávez of Venezuela, an important member of the Organization of the Petroleum Exporting Countries, to visit India for the first time. This was the first time in India’s history that a head of state from a major Latin American oil country was invited to visit India. The prominent reason for this visit was that India Based on the visit of President Chavez, we will draw closer to this Latin American oil country and resolve India’s priority in the exploration, production and import of this country’s oil industry as soon as possible. This is an outstanding manifestation of India's energy diplomacy, and it also shows that energy diplomacy will become an important part of its overall diplomatic strategy. India's future international stance will be largely restricted by energy diplomacy.

Since the 1990s, India has been vigorously promoting dramatic great power diplomacy in an attempt to quickly join the ranks of great powers. To this end, India has accelerated its economic development strategy. According to some expert estimates, India will become the country with the largest energy demand in the world in the next 20 years, like China.

India was not short of oil. In the mid-1960s, India's GDP was only about US$30 billion, and its annual economic growth rate hovered at 3%. At that time, India's domestic crude oil production had reached 20 million tons. can meet domestic development needs. Since the 1990s, India's energy demand has grown rapidly, and its GDP has risen from US$200 billion to US$500 billion in 2004. Although India's oil industry has also developed significantly at the same time, its annual crude oil production has also Only about 30 million to 35 million tons, which is lower than the level of China's Daqing Oilfield in 1965. At present, India has entered the stage of economic take-off, but its domestic oil and natural gas production can only meet 30% of its economic growth needs. It is obviously unable to meet its needs, and most of its energy needs to be imported. Experts estimate that India's energy self-sufficiency rate will drop to about 15% in the next 15 to 20 years. India's annual GDP growth rate in 2004 reached 8.2%, and it is still possible to continue to reach a growth rate of 7% this fiscal year. Therefore, India is likely to surpass South Korea and become Asia's second largest energy importer next year. Experts estimate that India will likely become the world's fourth largest energy import demander after the United States, Japan, and China within five years.

In late January this year, Indian Prime Minister Manmohan Singh said at an annual meeting of the oil industry that "India's energy gap can only be solved by increasing domestic exploration and accelerating the development of overseas opportunities."

India's domestic oil resources are very limited and it should be classified as an oil-poor country. At present, 60% of the rural population in India still does not have access to electricity. Despite the continuous high temperature in summer, less than 20% of households in India can afford air conditioning. The proven oil reserves are only 660 million tons, accounting for only 0.5% of global oil reserves. In fact, increasing domestic exploration is not the original intention of the Indian government. Because according to the current mining rate and oil production, India's oil resources will be exhausted in less than 25 years. For this reason, the future strategy adopted by the Indian government will not only discourage increased exploitation of existing domestic resources, but will try to limit it to protective exploitation of oil resources.

In February this year, India's local oil extraction and oil production had dropped by 5% respectively. There is news that India is preparing to further reduce its local oil production and extraction, at least on the land of the Indian subcontinent. Against this background, India has realized the seriousness of energy security, adjusted its past strategy of relying solely on domestic oil production or imported oil, and increased its efforts to purchase oil field shares and mining rights overseas. India has turned its attention to the international market and offshore oil fields. In addition to oil, India also regards natural gas diplomacy as a major supplement to its own energy diplomacy.