Former Prime Minister of India - Shri Atal Bihari Vajpayee

KEYNOTE ADDRESS BY PRIME MINISTER SHRI ATAL BIHARI VAJPAYEE at the 5th International Petroleum Conference and Exhibition PETROTECH-2003 at Vigyan Bhavan,

My colleague Shri Ram Naik,

His Excellency Mr. Abdulla Bin Hammed Al Attiya, Minister of Energy and Industry of the State of Qatar,

Mr. B.K. Chaturvedi, Secretary, Petroleum,

Mr. Subir Raha, Chairman, Petrotech Steering Committee and Chairman & Managing Director ONGC,

Distinguished invitees & delegates,

Ladies and Gentlemen,

To begin with, I wish all of you a very Happy and Prosperous New Year.

It gives me great pleasure to be with you today at PETROTECH-2003. I must compliment the organizers of this Conference for bringing together representatives from both public and private sector companies, experienced professionals, eminent scientists, technocrats, economists, environmentalists and energy experts from India and abroad on a common platform. This, I am sure, will facilitate useful exchange of ideas, leading to the expansion of mutual cooperation for long term availability, equitable distribution and sustainability of energy supplies globally.

Adequate, affordable and sustainable supply of energy is one of the fundamental parameters determining the economic growth of any country. Energy is to national development what oxygen is to human life. All our cherished goals, which are common to all the countries, such as improving the quality of life of our citizens and national security, need energy for their realization.

The converse of this is also true. The division of the world between developed and developing countries finds its reflection in the division between those who have a high per-capita usage of energy and those who either do not have sufficient energy or cannot harness it. Therefore, if we want to create a global environment wherein every nation gets equitable opportunities to grow, the energy resource gap between developing and developed countries has to be bridged.

The energy requirements of the Asia Pacific region are rapidly growing. That the bulk of the world’s population lives in this region is only a part of the reason for this. A more important reason lies in the rapid economic growth in this part of the world in recent years. In this, India and China alone account for nearly half of the total Asia Pacific demand.

India is one of the five largest economies of the world in purchasing power parity terms, and is home to about one-sixth of the world’s population. We are speedily moving in all areas of development, while zealously protecting our democratic set-up. Although the per-capita energy consumption in India is still very low, it is rising quickly. At the targeted GDP growth rate of 8%, it will grow considerably in the coming years.

I take this opportunity to compliment India’s petroleum industry, which has demonstrated enormous capabilities in both upstream and downstream sectors. Our oilmen have painstakingly developed it over the past 45 years. The presence of the Public Sector Undertakings (PSUs) in exploration, production and marketing of petroleum products has been pre-dominant in the last four decades.

Nevertheless, we in India have been cognizant of the challenges of the present and the future. We are aware of the need to find viable strategies to explore, produce and refine more from our own hydrocarbon resources. Without substantial domestic production, the nation would be subject to the volatility in crude oil supplies and prices and “Oil Security” would be difficult to achieve.

Therefore, to realize our objective of giving a greater thrust to efficient exploration, development, production, refining of our hydrocarbon resources, and marketing of products, we have opened up this sector for private and foreign investment. We have encouraged both domestic and international enterprises to supplement the efforts of our national oil companies. This is indeed one of the big successes of India’s economic reforms.

Though a strong infrastructure backs our domestic oil industry, tremendous potential still exists for international cooperation, especially in the field of hydrocarbon technology. The India Hydrocarbon Vision-2025 document lays down the framework for addressing issues such as energy security, use of alternative fuels, and interchangeability of technology to ensure that the mix of energy sources used in the economy is optimal and sustainable and that adequate quantities of economically priced clean fuels are made available to Indian consumers.

The rapidly growing demand for petroleum products is making our oil companies to look to new areas -- both within our territories and outside. In the petroleum industry, globalisation has provided an opportunity for India to be a significant center for equipment and services both in upstream and downstream sectors.

The Petroleum Sector is, today, finding itself at the crossroads of the global economy. Security of supplies has become one of the important challenges that needs to be carefully addressed. It is especially important for countries that are increasingly dependent on oil imports for their sustained economic growth.

Crude oil prices may shoot up if tensions in West Asia rise, leading to a prolonged shortage of supplies in the world oil market. This may adversely affect our national economy. Recent developments have already affected oil markets and sent prices upwards. Therefore, oil security has come to occupy a key position in the present policy matrix of our government. We are examining the feasibility of establishing strategic storage of crude oil and petroleum products in our country to create a buffer for meeting unforeseen disturbances in the supply chain and strengthening India’s oil security. We have also embarked upon a detailed study to identify ways to minimize supply risk from external sources.

In order to ensure a healthy and sustained development of the hydrocarbon sector in the country, we will put in place a transparent and independent regulatory system. The Petroleum Regulatory Bill is before Parliament, and we will strive to ensure its early passage.

While exploration is the key challenge, equally important is the urgent need to promote conservation of energy to secure economic development. Increased efficiency in the use of petroleum products offers the most immediate and cost effective opportunity to reduce resource consumption. Therefore, energy conservation must become a way of life in Government, Industry and Society. Some of the steps, which could help in this endeavor, include proper educational programs for energy users, fiscal incentives for developing energy-efficient and environment-friendly technologies, and fiscal measures to adopt such technologies.

Though petroleum and its products contribute to socio-economic development globally, their use has some adverse impacts on the environment. Minimizing the global impacts is a major challenge in the new century, in which developed countries, having been responsible for the major part of the problem, should take the lead. Local environmental impacts, on the other hand, relate to both developed and developing countries. India has been pro-active in addressing these, as the clean air in Delhi today bears testimony.

So far, India has been more dependent on conventional sources of energy like coal, hydel, oil, gas and atomic energy. But there is a possibility that with the harnessing of non-conventional energy sources like sun, wind, biogas, biomass, agricultural and industrial wastes, it will be possible to better meet the energy demand of people living in the countryside and in far-flung hilly, tribal and island areas. We have one of the world’s largest programmes for promotion of such non-conventional energy sources.

Distinguished participants, I cannot overemphasise the importance of R&D for the success of our efforts. There is an urgent need to switch over to a fresh approach, which emphasizes innovative and inter-disciplinary research targeting breakthroughs in new technologies and processes. The world is also looking for breakthroughs in Green Technologies to address the environmental concerns arising from energy use. All these call for greater cooperation among scientists and engineers from various disciplines and countries. Access to these new petro-technologies needs to be universal within the framework of a fair and enlightened Intellectual Property Rights regime.

I hope that PETROTECH-2003 will live up to its promise of being a useful platform for all the stakeholders – private, national and international -- to foster and promote global energy cooperation.

With these words, I wish big success to your conference.

Thank you.