Government policies slow natural gas growth in India


Natural gas growth has slowed down in India

Throughout India, growth in the natural gas sector has stagnated recently due to a number of factors.

According to a paper released by the Federation of Indian Chambers of Commerce and Industry, growth in natural gas has stalled mainly due to rising prices and a shift in government marketing procedures.

While production costs remain high, the government maintains price controls to shield Indian consumers from fluctuations in energy prices. This has led to discrepancies within the country in the cost of natural gas extracted from similar areas. The government seems content to allow these pricing differences to exist, and now many organizations are finding that it is becoming difficult to attract new investors.

"The government has not been able to attract investors in the exploration and production sector due to uncertainties in areas of pricing and allocation of hydrocarbon resources, complexity in granting of approvals and various clearances, interpretations of the terms of the production sharing contracts [PSCs] and other firework agreements," the paper said.

Earlier this year, a massive blackout in India caused a number of national officials to rethink energy usage in the country. While increasing domestic natural gas production might be a better solution for satisfying long-term consumption needs, as long as these issues regarding pricing and use persist, it will be difficult for the market to grow to a point where it can resolve the country's energy woes. 

Therefore, it is up to producers to ensure they are implementing new strategies and procuring innovative equipment designed to speed up oil and gas extraction processes. Testing oil and gas wells to determine which areas will produce the highest quantity in the shortest amount of time can reduce production costs and thus add new life into natural gas growth within India. 

Companies that are looking to improve their operations should contact an oilfield technologies provider to acquire the solutions to fuel increased production.