Energy Importer India Apprehensive About Higher Oil Prices
"You need to do some out of the box thinking to make the project viable in this environment," a senior executive at ONGC said. He added that the firm is reworking its FDP to reduce capital spending and boost production to make the KG-D5 project work at the current oil prices, including lowering oil production cost by $10 from $60 a barrel as pegged in the FDP.
When developed, the deepwater KG-D5 project will raise India's production. Greater domestic supplies will be in line with the government's call to lower Indian crude oil imports by 10 percent in seven years from almost 80 percent currently.
"The government should help. This is a national resource, the only big-ticket hydrocarbons project in the country. If we don't pursue this project just because it's unviable at current prices, we may end up importing a lot of oil and gas for many years to come," the ONGC executive explained.
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