An enormous challenge facing us today is ensuring reliable and affordable energy to the billions of people across the world. Inter-regional trading in crude oil and products accounts for over 50% of the global oil production. The global hydrocarbon supply chain is complex, covering large distances, different modes of transport spanning diverse geographical regions, a huge variety of products, etc. The supply chain is an important link between producer and consumer nations which drives the wheels of the modern global economy. Developing countries in Asia and Africa have to meet the growing energy needs of their people. Also, the geographical endowment of global hydrocarbon resources points towards an increasing interdependence in the future, with economies of both producing and consuming countries closely intertwined.

The turbulence in the international oil market over the past 5 years and record high oil prices are hard facts. The Speculators vs Fundamentals theory has generated a lot of debate but shed little light on the reasons for high oil prices. There is no denying the fact that structural shortcomings across the hydrocarbon supply chain are responsible for this situation and addressing them urgently should be a key focus for all of us.

Dialogue is the only method for addressing matters of such urgent concern in today’s globalised world. India is committed to this principle of dialogue among oil producing and consuming nations, based on trust and mutual respect for one another. India has taken the initiative to strengthen the process of dialogue by hosting Ministerial Round Tables involving major Asian consumers and producers. The first Ministerial Round Table was held in January 2005 and saw the participation of Middle East producers and major Asian consumers. This was followed by another Ministerial Round Table in November 2005 for sharing of perspectives by North & Central Asian producers and Asian consumers.

India has made significant contributions to the supply chain, particularly in the refining sector. During the last 10 years, India’s refining capacity has more than doubled from 62.2 million tons to 149 million tons. From a net product-importing nation, India has emerged as a major product export hub, with current exports of over 30 million tons. We have plans to add about 98 million tons of refining capacity in the medium term. In the area of exploration and production also, India has taken several initiatives. 6 rounds of the New Exploration and Licensing Policy (NELP), with attractive terms, have been held, inviting international bids and the seventh round is in progress currently. While we are relentlessly working on the domestic E&P sector, we are also encouraging Indian companies to take up E&P activities abroad. We believe in an investment climate that promotes free trade with lower barriers to investment. India will continue to strive to positively contribute to the world oil supply chain both in the Upstream and Downstream sectors.

India, an Executive Board member of the International Energy Forum Secretariat and co-host of the upcoming 11th IEF at Rome is committed to playing an active role in the emerging global energy scenario. The theme of the IEF “Energy Dialogue to Respond to the Global Challenges” reflects the most pressing global concern today. Beginning with the first step of bringing the producers and consumers together to share their perspectives, the upcoming IEF ministerial round attempts to embark on a path of collective action to respond to the energy challenges facing us. This is indeed a giant step forward. I am optimistic that our collective efforts in this sphere will take us forward and enable us to confront issues in a cohesive and concerted manner.