ONGC Chief warns under-investment in Oil & Gas will stall progress, ET EnergyWorld

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New Delhi: Under-investment in the Oil & Gas sector could hamper India’s progress, Arun Kumar Singh, Chairman and CEO of state-owned Oil and Natural Gas Corp (ONGC) has warned. National Oil Companies aroud the world are facing increasing pressure to take credible steps towards energy transition, away from fossil fuels.

“Under-investment in oil and gas is not only a disservice to the energy sector but a roadblock to global progress,” he said recently while speaking at an industry event.

While the world is passionately focusing on renewable energy as a measure to combat climate change, he argued that ignoring the traditional fossil fuel industry could stall economic growth and hamper societal development.

He emphasized that “balance is key.” According to Singh, the transition to renewables is a gradual process and will take time. A sudden, massive shift could lead to energy poverty in developing nations and curtail essential services, he cautioned.

The speed of the global transition away from fossil fuels, according to Singh, is “very disorderly” and not meeting expectations at various levels — political, resource allocation, and technological. “If the transition is not affordable, it won’t happen,” he added.

Singh pointed out that most of the world’s future energy needs will come from Asia and Africa. Stressing on India’s increasing energy needs due to its growing economy, he said, “India’s growth so for us the need for transition is more pronounced than anybody else.”

Citing global oil prices currently at $92 per barrel, up from a stable range of $40 to $60 over the last five years, Singh indicated that the surge is due to under-investment in the sector since 2019. “Today, oil price, we believe, is a story of 100% under-investment. And who is paying for it? Poorer countries like ours,” Singh remarked.

Calling for responsible investment and sensible policies, Singh urged the delegates to consider the ‘energy dilemma’ in its totality. “While we invest in the future, let’s not under-invest in the present,” he opined.

The CEO also shared insights into India’s energy sector, revealing that the country’s dependence on oil is almost 87%, and on gas is 55%. “What we do will simply substitute imports by whatever we find in our country,” he explained.

Singh called for greater efforts in technology development for a faster transition. He highlighted the existing use of hydrogen in refineries and urged for its greener alternatives. “Green hydrogen in this country will most likely be led by refiners,” he predicted.

Sketching out ONGC’s roadmap, Singh said that the company is allocating resources in a 3:1 ratio for conventional oil and gas compared to transition efforts. “We are committed. By 2030, almost 10 to 12 billion dollars will be devoted to transition,” he said.

Singh concluded by inviting all stakeholders to participate in making the energy transition cost-effective and quick, warning that failure to do so will result in an even more pronounced imbalance in global wealth and resources. “If this transition doesn’t happen fast, the energy dependence on OPEC countries will be so high that you can’t imagine how much wealth will get transferred,” he warned.

  • Published On Sep 15, 2023 at 06:18 PM IST

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