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India’s ENERGY Safari in Africa Ruchita Beri argues for a more proactive Indian diplomacy to revitalise its ties with the oil-rich Sub-Saharan Africa that may emerge as a crucial pillar of the country’s search for energy security


raditionally, our relations with SubSaharan Africa were based on our recognition and sustained support for the anti-imperialist, anti- colonial and the anti-apartheid struggles. We also shared a common platform with them on peace, disarmament, nonalignment and developmental issues. However, with the end of the cold war and the emergence of a new South Africa, the rallying points between the two regions, i.e. support to liberation struggles and the anti-apartheid struggle, have come to end. Issues such as disarmament and nonalignment that had brought the two together have taken a back seat in this era of globalisation. In the post-cold war era it appears that India’s foreign policy is driven to a large extent by economic issues, energy security being one of the important facets. Energy security may be the biggest challenge to Indian policymaking in the coming decades. Our country’s consumption of energy has started to rise rapidly in recent years. Today, India is one of the largest consumers of energy in Asia. With indigenous production dwindling, it is estimated that by the end of the decade, we will be importing 90 percent of our crude oil and natural gas requirements. In recent years, India has been trying to reduce its dependence on the Persian Gulf and has started looking at Africa as an alternate source of energy. It is estimated that SubSahara Africa holds 7 percent of world oil reserves and accounts for 11 percent of world oil production. In the first part, the paper will examine India’s rising energy security concerns. In the second part of the paper, the extent of India’s involvement in Sub-Saharan Africa’s energy sector will be analysed. Finally, the challenges India is facing in this endeavour will be examined. India’s Energy Security Concerns India is a facing the critical challenge of meeting a rapidly increasing demand for energy. With over a billion people, a fifth of the world population, India ranks sixth in the world in terms of energy demand. Its economy is projected to grow at 7-8 percent over the next two decades, and in its wake will


come a substantial increase in the demand for oil to fuel land, sea and air transportation. For more than a decade, India’s energy consumption has grown at a faster pace than its economy and it appears this trend will continue. A recent study indicates that India’s energy consumption will increase at the rate of 5 percent every year up to 2010-11. However, this is a conservative estimate and the real consumption is likely to grow at a faster pace. As is true of most countries around the world, India’s industrial sector is the largest consumer of energy, followed by the transport sector. The industrial sector is mainly dependent on coal and natural gas and accounts for 99 percent of coal and natural gas consumption. On the other hand, the transport sector is the largest consumer of oil and accounts for nearly 50 percent of the total oil consumption.1 At present, coal accounts for a predominant share in India’s energy consumption basket (56.2 percent), followed by oil (32.4 percent), natural gas (9 percent), hydroelectricity (2.1 percent) and nuclear energy (less than 2 percent). Nevertheless, the share of oil and gas will increase, primarily due to two factors. First, with the modernisation and urbanisation of the Indian economy there has been an exponential growth in motorised transport. These millions of cars, trucks, buses, scooters, etc., are mainly run on liquid fuels. Second is the steady rise of the use of Combined Cycle Gas Turbines (CCGT) in power generation.2 This technological process employs either liquid fuels or gas in power generation. According to the estimates of the Energy Information Administration (EIA) of the United States, India’s oil consumption will be twice the current levels by 2010. While India has significant reserves of coal, it is relatively poor in oil and gas resources. Its oil reserves amount to 5.9 billion barrels (0.5 percent of global reserves) with total proven, probable and possible reserves of close to 11 billion barrels. The majority of India’s oil reserves are located in fields offshore Mumbai and onshore in Assam. The problem is, the country has no spectacular oilfields. And, despite 56 years of efforts –– since the country gained independence from British rule –– as well as the much-hyped new oil strikes (in Rajasthan) in recent years, India does not produce more than 30 percent of its oil needs from the oilfields within its territorial boundaries. The domestic production has been stagnating at around 32

February-April 2007


February 2007-April 2007