CAIRN INDIA Energy Security – Oil is Well 19 January 2010 What is a Cairn? A Cairn is a collection of stones marking the way to the top of a Scottish mountain or hill.
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Energy Security – Oil is Well
19 January 2010
A Cairn is a collection of stones marking the way to the top of a Scottish mountain or hill.
The placing of a stone on the Cairn serves dual purpose; it marks the path for others to reach the top and it also records the achievement of the individual.
Each stone becomes integral to the structure and strength of the Cairn which continuously evolves and expands.
The Group’s name originated from this vision.
Primary energy fuel mix (2008)
Comparison of primary energy consumption
Source: BP Statistical Review, 2009
India is one of the fastest growing economies of the world : GDP growth - ~6% CAGR (1995 to 2009)
Primary energy consumption growth in India over last two decades: ~5% (CAGR) VS ~2% World
India produces 36.1 MMT of crude but consumes 135 MMT - high consumption but low domestic resources - greater import dependence!
Balanced coal supply / demand vs. skewed oil supply / demand
As India becomes a refinery hub and a major consumption centre, international oil prices would play a more prominent role
Energy security is essentially encapsulated in the following 3 elements –
Availability on demand, when a country wants energy, it should be available
The nation should be able to access energy sources globally to ensure uninterrupted growth
Affordability of the energy being procured to ensure that the growth engine is not impacted by the price impact
While rich countries are able to find willing sellers, the issue of energy security gains importance for developing countries which have invested billions of dollars in infrastructure but still face issues in securing energy at high costs.
India has moved in steps – create refining capacity to refine crude - create infrastructure to improve market access – securitize supply of crude
Striking the right balance would help increase productivity
Energy requirements of the country
Policy directives on all fronts – difficult and complex but possible with persistence!
Sustainability & Growth
*Market Cap of Cairn Energy PLC end 1999
**Market Cap as of 18 January 2010
*Q2 FY 2009-10
Provisional award of KG-OSN-2009/3 and MB-DWN-2009/1 blocks in NELP VIII bidding round; subject to GoI approval
Karunakaran Hari - GM (International Trade)