India's Prime Minister has highlighted investment opportunities worth half a trillion dollars in the energy sector to advance the ambition of moving from energy security to energy independence. Achieving this will likely still require imports alongside hoped-for domestic mega-discoveries in underexplored basins, underscoring that outside investment is critically needed.

Persistent Reliance on Imports

Despite a past goal to cut oil imports by 10% by 2022, India's oil and condensate imports are on track to reach a record 5.2 million barrels per day. The nation competes for upstream investment with other global exploration hotspots and, for liquefied natural gas (LNG), with other energy-hungry nations that often have deeper financial resources.

Stalled Progress in Gas Adoption

A decade-old target for gas to constitute 15% of the energy mix by 2030 has seen little progress, with its share currently at just 6.2%. While India's LNG import nameplate capacity has more than doubled to 52.7 million tonnes per annum across eight facilities, with more projects planned, actual imports are only about half of installed capacity. This underutilisation is attributed to past infrastructure constraints and the high price sensitivity of Indian customers.

Conditional Demand Growth and Price Sensitivity

Demand for gas from industry, city gas distribution, and power generation is expected to grow, but affordability is key. Petronet LNG estimates 2026 imports could reach 28 million tonnes, up from 25.5 million tonnes last year, provided prices remain soft. The company's managing director stated that LNG prices between $6 and $7 per million British thermal units could support consumption growth, emphasizing India's need for more oil-linked LNG contracts due to the volatility of Henry Hub-linked prices.

Domestic Exploration Push and International Partnerships

In parallel, India is aggressively seeking to boost domestic exploration. State-owned Oil and Natural Gas Corporation (ONGC) is proactively engaging with international supermajors like ExxonMobil, Shell, BP, Chevron, and TotalEnergies for exploration and production ventures. ONGC is in talks with ExxonMobil for joint bidding in ongoing licensing rounds, building on previous agreements. Several memoranda of understanding on LNG and exploration have been signed with international and local partners, though such agreements have often been scant on detailed commitments.

Conclusion: The Need for External Investment

There is clear will from the Indian government and energy players to expand operations and boost energy security. However, realizing this ambition is contingent on securing substantial external, third-party investment.