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Political Security or Energy Security?
The Oil and Natural Gas Corporation’s decision to buy 80% of Gujarat State Petroleum Corporation’s interests in the Krishna Godavari basin for $1.2 billion could be a calculated gamble. While the deal has been criticised as a rescue operation to save GSPC from bankruptcy, this article attempts to take a more dispassionate look at it both from the angles of commercial interest and promoting India’s energy security.
All over the world, oil and gas exploration is a risky business.1 It is even compared to gambling, though that is far-fetched. There have been tremendous technological breakthroughs; both in exploration and production activities, and the odds of finding reserves can be improved by applying the latest technology.
While analysing the recent decision of the Oil and Natural Gas Corporation (ONGC) to buy 80% of Gujarat State Petroleum Corporation’s (GSPC) interests in the Krishna Godavari (KG) basin, we need to keep this unique feature of the oil and gas sector in mind. Unfortunately, instead of analysing ONGC’s decision in a dispassionate way, the media discussion has been mostly influenced by those wanting to score political points. While it has been criticised as a rescue operation to save GSPC from bankruptcy, only a few have attempted to see it as a commercially attractive deal.2 In this article, I attempt to take a look at the purchase decision both from the angles of commercial interest and promoting India’s energy security.
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