A new oil find in India could chip away at a serious energy gap many top Asian emerging markets now face.
Even among nations confronting production that falls well short of consumption, there are flickers of hydrocarbon hope to reduce dependence on foreign supplies.
The U.S. Energy Information Adminstration says Indian oil production stood at 883,000 barrels per day in 2008, from 185,000 bpd in 1980.
India’s economic growth means that it has climbed to the spot of Asia’s #3 oil user, and Indian imports are up to 70% of consumption…and that is projected to climb to 90% by 2030.
From just 643,000 bbl/d of oil thirst in 1980, greater prosperity has driven daily consumption to nearly 3 million barrels a day, of which nearly 2.3 million are bought from abroad.
But this past weekend, execs from the Scotland’s Cairn Energy joined Indian government officials to turn the spigot on at a brand new production site.
The Barmer oil field about 80 miles from India’s border with Pakistan had been all but abandoned by Shell, but Cairn India stepped in and made Shell red-faced in 2004.
That’s when Cairn announced a 3.5 billion-barrel discovery out in the western region of Rajasthan, with 1 billion bbl estimated to be recoverable with current technology.
Bringing the Barmer find online has brought Cairn (LSE:CNE) into the FTSE 100, making it a certified London blue chip, and government estimates say the field’s production will reduce imports by about 7%.
It’s a win-win for India and Cairn Energy shareholders, but to keep above water, India has to find much more than 3.5 billion barrels and develop other resources like natural gas, wind, and solar to replace some oil intake.
More on India’s natural gas industry soon.