India imports nearly 90% of its crude oil—largely from Russia and the Middle East. With geopolitical trouble making both of those sources less reliable and leaving it vulnerable, the world’s most populous country is inviting more foreign investment to help it boost its domestic oil and gas supply, a top energy executive from India told Fortune.
While India is acquiring more alternative supplies to help it ride out the war in Iran, it typically imports most of its oil from Saudi Arabia, Iraq, and Russia. At present, those Russian barrels are flowing only under a temporary waiver from the U.S., after President Trump had used higher tariffs to get India to stop buying from Russia.
As part of reforms to open the country up to more domestic oil and gas exploration, India is seeking to attract $100 billion in investment by 2030. Recently, the chairman of India’s top private oil and gas producer, Cairn, made the trek to Houston for the CERAWeek by S&P Global conference with government officials to meet with many of the top American companies specializing in shale and offshore drilling.
Billionaire industrialist Anil Agarwal, who chairs mining giant Vedanta Resources and its subsidiary, Cairn Oil & Gas, said he personally made the trip “with a shopping list to spend $5 billion.”
India remains “vulnerable” and lacking in energy security until it can produce at least 50% of its own oil, Agarwal told Fortune. He believes India can grow to produce enough oil to meet 30% of its domestic demand within a few years. He wants to help create a “mini Houston” in India.
“It’s a greater opportunity to be an explorer in India because India is fundamentally oil rich, as far as the reserves are concerned,” he said. “But you have to do the exploration, make investment, and this is the great opportunity to develop the hydrocarbons in India.”
India may have surpassed China as the world’s most populous nation, but it produces less than 1% of the world’s oil and gas. India also imports more than half of its natural gas.
Cairn has ambitious plans to increase its production capacity from roughly 110,000 barrels of oil per day to 500,000 barrels daily over the next several years. Close to 70% of the vast country has never been explored for potential oil and gas reserves.
India is becoming friendlier to domestic oil and gas production and foreign investment, with legal reforms eliminating some barriers, and Cairn aims to take advantage, Agarwal said. More than 70% of India’s industry is still composed of state-owned companies. “That mindset is changing,” Agarwal said, arguing that businesses should be run by businesspeople.
Cairn already works with top U.S. oilfield services companies, including Halliburton and Baker Hughes, but the company also is looking for exploration joint venture partners. The government’s current round of bids for onshore and offshore exploration blocks has been extended to the end of May.
Lots of opportunities remain with newer technologies, including the onshore Digboi, Assam, region, which was the birthplace of India’s oil sector, but sees little activity today. “There is hardly any production there,” Agarwal said.
India counts quadruple the population of the U.S. and rising, and its middle class is growing. “This will be the highest [energy] demand in the world,” he said.
Agarwal sees aligned entrepreneurial spirits between the U.S. and India. “The collaboration between America and India is very strong. We think alike, we work alike, and we can adjust with each other and trust each other,” he said. “America is very important for us. America can give us all the technology.”
India and Vedanta also are eager to partner more with the U.S. on critical minerals to help the U.S. build up supply from partners outside of China. Vedanta is strong in the production of copper, zinc, rare earths, and much more.
“I use the words, ‘Drill, baby, drill’ for the hydrocarbons, and I use the words, ‘Dig, baby, dig,’ for the minerals,” Agarwal said with a laugh.
