India's government is attempting to revive investments in its upstream sector, following several years of decline. These efforts are focused on achieving a policy objective of reducing energy imports by 10 per cent over current levels by 2022. Following an auction of marginal fields held by its National Oil Companies (NOCs) in 2016, an open acreage licensing round was launched in 2017; changing the upstream fiscal regime, going forward, from a profit-sharing to a revenue-sharing model. With the 2022 target looming, other models are also being considered, including NOC farmouts and production-enhancement contracts. This paper contributes to the policy discussion by addressing the following questions: what are the lessons from India's previous bidding rounds for upstream acreage? And, what are some of the policy considerations, given similar international experience?
Despite being the largest oil producer in Africa, Nigeria has been in the limelight over the last decade for all the wrong reasons. Beginning in the late 1990s, the cosy relationship between Big Oil and a despotic Nigerian state was challenged by popular, and increasingly militant, pressure from local communities, or more properly from armed youth movements. The shift from non-violent protest to militancy, and ultimately to armed struggle, was in many respects the inevitable result of the Nigerian government's brutal repression of the Ogoni movement. A decade later, the Niger delta is home to a fully-grown local insurgency. While sporadic episodes of violence and attacks on oil facilities have always proved an inherent feature of the Nigerian oil sector, the problems have escalated dramatically since the election cycle of 2003.
Over the last decade, non-OECD oil demand growth, and by extension global oil demand growth, was driven mainly by China, which accounted for half to two-thirds of this growth. However, since the Chinese government embarked on a deliberate policy of rebalancing, the country's annual demand growth has slowed to under 0.3 mb/d, compared to an average demand growth of over 0.5 mb/d in the 10 years prior to 2013. In this new era of slower Chinese growth, a new contender has emerged: India, which in 2015 was the main driver of non-OECD oil demand growth. In this paper we argue that in addition to the boost from low oil prices, structural and policy-driven changes are underway which could result in India's oil demand 'taking off' in a similar way to China's during the late 1990s, when Chinese oil demand was at levels roughly equivalent to current Indian oil demand. These changes include: a rise in per capita oil consumption (reflected in rising motorization of the Indian economy), a massive programme of road construction (amounting to 30 km per day), and a push towards increasing the share of manufacturing in GDP by 2022 (which could increase oil consumption by at least a third based on a conservative linear estimate). This paper also examines the implications of a take-off in domestic demand for India's recently acquired status as a net petroleum product exporter.
In recent years, a key theme in the oil market has been that of disappointing non-OPEC supply growth, despite an environment of high oil prices. Oil companies are struggling to generate substantial returns on their investments; decline rates have stepped up in various areas like the North Sea and Brazil; and existing fields are requiring a higher CAPEX spending on maintenance. This has resulted in challenging issues of feasibility and scalability and hence it has been harder for producers to generate capacity to offset declines in production. Moreover, planned capacity investments might not be achievable at the current budgeted costs. In recent years, infrastructure, material and manpower constraints have been significantly underestimated, leading to substantial cost overruns and project delays. Rising security costs have also played a part, as companies are increasingly operating in countries that are politically unstable.
In June 2010, the Indian government deregulated the retail prices of petrol. Shortly afterwards, the 'administered' price of gas was raised to double its previous level. The prices of 'sensitive' petroleum products – diesel, kerosene and LPG, have also progressively been increased; petrol prices rose by roughly 33 percent between June 2010 and November 2011, while diesel rose by just under 2 percent. Simultaneously, measures also began to be put in place to reform the method of meeting distributional objectives in energy, by way of direct provision or transfer of subsidy amounts to consumers. As energy in India has historically been priced very low, these changes reflect a transition in the energy sector, which is arguably part of a wider movement of the economy, from a system of central planning and quantitative allocation, to one based on market principles.
Most general discussion on the future of the market for internationally traded gas focuses on the 'swing towards Asia' – specifically, China and India are highlighted as major drivers of demand. But in reality, there is considerable ambiguity over the assumptions underpinning this outlook for India. In its New Policies Scenario, the International Energy Agency (IEA) predicts that non-OECD demand will continue to constitute the majority of world gas demand, growing from 53 per cent (1,806 billion cubic metres) in 2012 to 61 per cent (3,035 Bcm) in 2035. However, within this figure, while the share representing China and India combined will grow from 11 per cent in 2012 to 24 per cent in 2035, India's share will grow from 3 to 7 per cent (as opposed to China's, which will grow from 8 to 18 per cent) while as a percentage of world demand, it will grow from 2 to 4 per cent. The proportion of gas in India's primary energy consumption will rise from 7 to 9 per cent, but this will be nowhere near enough to displace either coal or oil (44 per cent and 25 per cent) by 2035. These projections suggest that India's contribution to world gas demand is lower than perceived. Despite these conservative forecasts, Indian policymakers have tended to be very optimistic on gas's potential to displace coal and oil in electricity, cooking, and transportation. As the use of these fuels is supported by controlled pricing and subsidies, it is ambiguous at best as to how these potential markets for gas could materialize. In fact, despite relatively high economic growth in the last decade, it is difficult to make a confident and accurate assessment of India's potential as a major gas market. Government forecasts carried out within a central planning framework tend to be overly optimistic, whereas projections by multilateral organizations tend to be cautious, but confused. The reason for this incongruity is because the Indian gas sector is characterized by two moving parts: one where prices and quantities are set by the government, and ...
Most discussion on the future of the market for internationally traded gas focuses on the 'swing towards Asia'. Specifically, China and India, the world's two most populous nations, are frequently highlighted as major drivers of future demand. Yet, there is considerable ambiguity over the assumptions underpinning this observation, particularly with regards to India. In fact, despite several years of relatively high economic growth in the last decade, it is difficult to make a confident and accurate assessment of India's potential as a major Asian gas market. Official government forecasts carried out within a central planning framework tend to be overly optimistic, whereas projections by multilateral organisations tend to be cautious but confused. The reason for this lack of clarity is that the Indian gas sector is broadly characterised by two moving parts: one which has prices and quantities set by the Indian government, and another which utilises gas at market (LNG import) prices. Additionally, there is some overlap between the two, further complicating attempts to assess these as separate markets. The lack of a clear pricing signal therefore makes it difficult to determine future levels of demand. This paper analyses whether or not recent reforms to the pricing of domestic gas could potentially change the Indian gas landscape by making price signals clearer. It investigates three important questions: First, could gas pricing reforms reverse the recent decline in domestic production? Second, could they lead to new upstream investments in gas? Finally, what is the impact of the reforms on downstream consuming sectors? The paper begins with an analysis of the 2014 gas pricing reform, followed by an overview of demand, supply and consumption. It then delves into the three broad questions posed above, and concludes with observations on whether reforms to gas 'price formation' (as opposed to 'price level') in India are in fact achievable, or whether they will continue to elude successive governments, and on whether ...
In November 2014, India implemented an unprecedented reform of domestic gas pricing. Under the reform, India's gas price (formerly controlled by the government at $4.20/MMBtu) became linked to a volume-weighted average of world gas prices – US Henry Hub, UK NBP, Alberta Gas Reference price, and the Russian domestic gas price. The price is to be reset every six months, based on a twelve month trailing average with a lag of one quarter.
In this paper that is a transcript of a lecture held to commemorate the 250th anniversary of Adam Smith's "Theory of Moral Sentiments" the author who is a Nobel Prize winner in economics reflects on the relevance of this classic. He shows that Smith proposed a historical approach to institutional transformations as opposed to the authors who tried to advance a system of ideal institutions. The importance of Smith's views on impartiality in ethical evaluation of social conditions and in building a just society is also emphasized.
Focuses on the model of human behavior manifest in Tibor Scitovsky's The Joyless Economy: An Inquiry into Human Satisfaction and Consumer Dissatisfaction (1976) & its contrast to that of standard economic theory. It is shown that Scitovsky makes a basic distinction between comfort & stimulation, to argue that, while comfort is easier to obtain, it leads to a more impoverished life. Instead, he advocates stimulation as the only path toward true human satisfaction & happiness. It is suggested that Scitovsky reconstructs the notion of rationality into an ideal of critical self-reflection in which individuals are encouraged to think deeply about their personal desires. Further, it is demonstrated that his analysis also has important implications for theories of utility. It is concluded, however, that Scitovsky's theory has greatest import for thickening the concept of freedom to capture not only instrumental but also substantive aspects of this notion. 20 References. Adapted from the source document.
Goal rights systems are compared to welfarist consequentialism & constraint-based deontology in a discussion of three interrelated problems: (1) the role of rights in moral theory; (2) the characterization of agent-relative values, & their role in consequence-based evaluation; & (3) the nature of moral evaluation of states of affairs. The welfarist view, which judges the goodness of states of affairs by the personal utility of those states, & the constraint-based deontological view, which considers rights to be constraints on action, are both inadequate in the analysis of states of affairs, due to their failure to recognize the role of rights in such an analysis & in an evaluation of the consequences of actions. The goal rights system includes the fulfillment & nonrealization of rights in its goals, using them to evaluate states of affairs & to choose actions through consequential links. Agent-relative values, or ethical positions, play a central role in this theory, which determines the relative importance of different rights & duties by a comparative analysis & evaluation of consequences. 3 Tables. Modified HA.
Intro -- Half Title -- Title Page -- Copyright -- Dedication -- Contents -- Acknowledgements -- Author's Note -- Introduction -- Part I Early Development -- 1. India Before the Millennium: Only Indira Gandhi Was Disruptive -- Part II Finance and Economy -- 2. Living Dangerously with a Troubled Legacy: The Chimera of Achhe Din -- 3. Jan Dhan and Demonetisation: A Political Gain and Economic Loss -- 4. GST: Reform Done, Revamp Needed for a Business-Friendly Solution -- Part III Energy -- 5. Coal Makes a New Beginning: Production and Distribution Revives -- 6. Opportunity to Build Oil Infrastructure Lost: High Taxes Hurt the Consumer -- 7. A Remarkable Progress in Renewable Energy: Solar, Wind Cheaper Than Fossils -- Part IV Manufacturing and Infrastructure -- 8. Mining in the Pits: Activism and Illegal Mining Continues -- 9. Infrastructure: Reasonable Growth but Environmental Concerns Remain -- 10. Manufacturing: Moving Out of the Woods but Slowly -- Part V Food and Agriculture -- 11. Volatility in Food Prices: Can It Be Controlled? -- 12. Indian Agriculture at Crossroads: New Direction Needed -- Part VI Social Sector -- 13. MGNREGA: Need Wage Distribution and Rural Asset Building -- 14. Swachh Bharat Mission: Is Rural India Using the Toilets Build? -- Part VII Employment -- 15. Jobs Are Growing, but So Are Educated Unemployed -- 16. Entrepreneurship: Start-Ups Flourish, Unicorns Prosper -- Part VIII Digital India -- 17. Telecom: A Growth Story Despite Call Drops -- 18. IT Sector: Facing Global Headwinds -- Part IX The Way Ahead -- 19. Managing Future Risks -- Conclusion -- Bibliography -- Index -- About the Authors.
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