Why India slips up on oil

Veteran energy sector journalist Richa Mishra sets out to answer why India has fallen short in extracting oil or gas from its shores

With oil prices rising again, an unfilled barrel is a cause for concern. Veteran energy sector journalist Richa Mishra takes the reader on a journey of how India has tried to fill up those barrels in the past 75 years.
 

Unfilled Barrels: India’s Oil story tells the story well. The first chapter detailing the role of Keshav Dev Malaviya sets the right note. He was not only India’s first petroleum minister, but also largely responsible for making the sector a serious investment concern in government policy. Told through interviews with his daughter, it brings a forgotten history come to life.
 

“If one goes through the parliamentary debates and questions during Malaviya’s time, some threads are common—oil price, cost of drilling rigs, oil equity in third country…he did establish a road map and the ONGC that we see today, is to his credit”. Too little has been written on Malaviya elsewhere and his role in shaping the Indian quest for sourcing oil domestically. This is quite a disservice. As the author rightly points out, his was the “journey of a dreamer. His journey continues to be the journey of successive oil ministers of India”.
 

Ms Mishra sets out to answer why, since then, India has fallen short in extracting oil or gas from its shores. Much like her compact writing style in her articles for The Hindu Business Line,  Ms Mishra has skimmed through the successive stages of the government policies over the decades, offering readers the overall picture without being bogged down with too many details.
 

The sweep takes in the recounting of Vijay Kelkar’s production-sharing formula, the development of the New Exploration Licensing Policy, “Helpless NELP", as she describes it to the latest Open Acreage Licensing Policy, or OALP, rounding off with her observation that India lacks a long-term policy for the sector. “When it comes to oil politics, why is India not as smart as the rest? The answer is—lack of long term strategy to manage oil economics. As one of the biggest consumers of oil, India needs to learn from one of the largest producers, Saudi Arabia, and have a long-term plan to ensure that its interest is protected irrespective of the market situation”.  
 

This is a point to underscore. India has been often caught off guard in playing the geopolitical game of oil to her advantage, despite being one of the world’s largest consumers. There have been some changes of late, as the decision to continue buying Russian oil shows. Before this spell, throughout the past 75 years, India has been most reluctant to face up to possible annoyances in foreign policy as the inevitable cost of securing a secure line of supplies from a strong friendly source abroad. Yet those are the prices of energy security for a big economy.
 

Instead, as the author points out, India has often married an inconsistent domestic oil and gas exploration policy with few plans to import from the cheapest sources of supply. It is only in 2021 that for the first time, India sourced its first-ever oil cargo from a new oil producer Guyana in Latin America. Another one million barrels was a consignment of Brazilian Tupi crude oil.

An interesting element of the book is the inclusion of the detailed comments from successive petroleum and natural gas ministers. Typically, these comments are strewn in various places in files and press releases, making it difficult to piece together a clear narrative of their position on the significant challenges they faced in office. Ms Mishra has filled this lacunae well, making the book a useful source of reference.
 

She has also waded into the difficult area of corporate rivalry in the Indian oil sector, discussing upfront the challenges journalists face in remaining neutral in this battle. “Anonymous attacks are not just restricted to officials. Journalists too are targeted. How can one forget the oh-so-famous Radia tapes….I remember a particular incident when an email was circulated against me”. As she says at the beginning of the chapter titled “Show of might or just corporate rivalry?”, these contests spared no one who mattered, in the sector. Few if any Indian journalists have brought up this seamy aspect of the rivalry on record. Without ascribing roles, she also mentions the impact of the battle between some of the key private sector companies in the sector. As she writes, “Interestingly, in this sector, everyone knows everything but pretends not to know anything about corporate supremacy. Whenever a new player—however mighty—entered the industry, the rumour was that one particular corporate house created hurdles”.

One quibble with the book is that despite the access Ms Mishra has had to generations of key personalities in the sector, she often lets them off lightly. The policy missteps, which she flags, are not taken to their conclusion, affixing responsibility. It might

have also helped if in the description of the policies for the sector, the economic context were also stitched in. Energy policies are plumbing for the economy, and the extent to which they are effective lies in noticing how they have made the rest of the economy run smoothly. This is a connection that can embellish the book.