Opportunity for india

Brent crude prices averaged $55 per barrel in the first nine months of calendar 2015, after averaging just under $100 for all of 2014. The oil price environment should stay benign[bi'nIn(kind,दयालु)] over at least the next 18-24 months.
This prolonged low price environment offers opportunities for countries such as India — which rely heavily on crude imports and render[ ren-du(provide,देना)] large fuel subsidies.

While low crude oil prices and the deregulation of diesel prices halved[hãv(half,आधा)] India’s fuel subsidies to ₹762 billion in fiscal 2014-15 from ₹1.4 trillion in fiscal 2013-14, more can be done to ensure that fuel subsidies remain low and subsidy sharing between the upstream companies and the government becomes more pellucid[pu'loo-sid(transparent,पारदर्शी)] and predictable.

In a revenue sharing model, the upstream companies pay a percentage of their production revenues from the nomination blocks to the government directly, and the government shoulders the entire burden of providing fuel subsidies. if fuel subsidies are eliminated altogether, the government will continue to receive a share of production revenue from the nomination blocks. As for cess — a tax on production — the government could change the way that such an indirect tax is charged. Cess[ses(rate,दर)] is fixed at ₹4,500 per tonne which currently equates to $9.3 per barrel.

For every barrel of crude oil produced in India in fiscal 2014-15, five barrels were imported.India also imports nearly 40 per cent of its natural gas consumption.

Dependence on imports can only be addressed by accelerating exploration and production in the country or partly by overseas acquisition.
More than two-thirds of total crude oil production in India in fiscal 2014-15 was from the nomination blocks that were awarded to the state-owned, Oil and National Gas Corporation and Oil India Limited.

These blocks have matured and production rates are starting to decline. Consequently[kón-si-kwunt-lee(resultant,परिणामस्वरूप)], if production rates in other domestic fields do not rise, India’s dependency on oil imports will increase further.

Dependence on imports can be partly addressed by acquiring assets overseas, for which the valuations are more reasonable now.

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