Page 6 - AsianOil Week 04 2021

AsianOil SOUTH ASIA AsianOil

for entertaining a certain amount of scepticism mission to help members insulate against global
when considering Barkindo’s suggestions. oil crises, each IEA country is expected to main-
India’s future as an oil importer is virtu- tain an emergency oil stockpile that is equivalent
ally guaranteed after years of domestic policy to at least 90 days of net oil imports. In the event
reforms that have failed to revitalise a tired and of a global oil shock, IEA members can choose
sluggish upstream sector. The country’s explo- to release their collective stocks to the market to
ration and production scene is not a tempting reduce volatility and give the international com-
target for foreign investors and little seems to munity time to respond.
be changing on this front, despite bold govern- India has long been concerned by its expo-
ment targets of reducing the country’s oil import sure to the oil market, with the country having
dependency by 10%. come to rely on imports to meet more than 80%
New Delhi appears to have realised that its of demand in recent years. As such, it has taken
chances of reversing the slow but steady decline to developing its strategic petroleum reserve
in oil production are scant and has begun to (SPR), having built around 10 days of worth of
look for answers to its energy security questions crude oil storage, with a further 12 days of capac-
beyond simply counting on a domestic upstream ity under construction. The country’s commer-
revival. cial oil storage, meanwhile, is estimated to be
able to hold 65 days of crude.
Taking steps
India, which became an IEA associate country What next
in 2017, is the first such affiliate country to for- While India’s membership of the IEA is likely to
malise its desire to advance ties with the agency. be still many years away, the South Asian coun-
Sahai said: “The signing of this agreement try still stands to benefit from a closer working
reaffirms and advances the invaluable rela- relationship with countries further along the
tionship that IEA members and India have. energy efficiency curve.
We hope this partnership leads to an extensive If the country struggles to improve its energy
exchange of knowledge and can be a stepping security outlook through domestic oil produc-
stone towards India becoming a full member tion, one possible solution could lie in sup-
of the IEA.” pressing domestic demand through embracing
IEA Executive Director Fatih Birol, mean- energy transition.
while, said the IEA was a perfect partner to help The IEA has projected that the Indian econ-
support India in expanding its energy system. He omy will likely emerge as the engine of global
added: “[T]his Strategic Partnership is the nat- oil demand growth in the next decade. While it
ural next step for India and the IEA that could is unlikely New Delhi can derail that train, the
eventually lead to full membership.” government is looking for ways to improving the
If India were to graduate as a fully fledged country’s energy systems wherever it can. The
member of the IEA it would have to meet cer- Strategic Partnership with the IEA represents
tain obligations. For example, as part of the IEA one possible solution.™

P6 www. NEWSBASE .com Week 04 28•January•2021