c. Energy (Oil & Gas and Renewable Energy

Innovation, research and development

Given the historical ties between the two countries, India and Oman are forging ahead with this special relationship by investing in research and development. This ongoing dynamic is evidenced in the amount of research emerging on India-Oman relations. There are a number of research centres and study groups dedicated to Gulf Studies, with specific focus on Oman and India in the Indian Ocean. The Gulf Studies Centre of Jawaharlal Nehru University and the India Arab Cultural Centre of Jamia Millia Islamia, among others, facilitate research on diverse areas of interest and provide platforms for dissemination of such research. Sultan Qaboos University, the premier national university of Oman, as well other universities in Suhar, Nizwa and Salalah, also host research events which focus on bilateral relations of these two countries, covering all socio-cultural spheres. Indo-Oman maritime cultural heritage, migrant contribution to host and sending country, as well as opportunities for avenues of shared research are all emerging areas of research and development. Opportunities of collaboration between institutes in India and Oman also exist in experts’ visits via exchange, workshops/ seminars, research consultations and short term training programmes. Possbile cooperation between Sultan Qaboos University and institutions in India in Marine Biotechnology, ICT, and Renewable Energy, especially solar energy, post graduate and doctoral programmes and Environmental Studies are actively pursued. Short term courses are available for Omani public and private sector professionals as part of professional development. The wide and diverse spectrum of skills and disciplines offered ranges from IT to rural development, parliamentary practices to entrepreneurship, marine to aeronautical engineering, and others.

c� Energy (Oil & Gas and Renewable Energy)

Although India enjoys an abundance of traditional and non-traditional energy sources, they are insufficient to meet the country’s rapidly growing needs. It, therefore, resorts to importing crude oil and its associate products from abroad, especially from the Middle East28. As much as 53% of India’s oil imports and 41% of gas imports now come from the Arab region. Oman is one of the countries with whom India has developed long term energy partnership. According to Oman’s Ministry of Energy and Minerals, exports of Omani crude (Oman Export Blend) to India rose 8.9% (month on month) to reach 11.1% of the country’s total exports of 741,813 barrels per day in October 2020.

28 Sanjay Bhattacharyya, Secretary in the Ministry of External Affairs, MEA.

India is also developing around five million metric tonnes of strategic crude oil storage at three locations in the southeast and west of the country. Construction is being overseen by Indian Strategic Petroleum Reserves Limited, a special purpose vehicle wholly owned by the Oil Industry Development Board under India’s Ministry of Petroleum & Natural Gas29 . Indian Prime Minister Narendra Modi, during his visit to the Sultanate in 2018, reiterated India’s invitation to Oman to participate in building the strategic oil reserves in India. The two sides agreed that there is broad scope for mutual cooperation in building their strategic oil reserves. India has reportedly been constructing an underwater natural gas pipeline with a potential value of US$ 4,000 - US$ 5,000 million via Oman to India, named Middle East Deep Qater Pipeline (MEIDP), also known as the Iran-Oman-India pipeline. The project has been on the cards for some time and could see the momentum pick up soon where it could become a joint venture effort between Oman, Iran and India. If completed, this initiative will reduce the cost of transportation and security risk of oil containers in high seas. The project is under construction and seeks to bring cheaper Iranian natural gas to India via Oman. An analytical report by US based Energy Information Administration (EIA) shows that India was the third-largest consumer of crude oil and petroleum products after the United States and China in 2019. Demand for crude oil

Petroleum Products: April 2019-January 2020 (MMT)

MMT 100 90 80 70 60 50 40 30 20 10 0

LPG MS NAPHTHA ATF SKO HSD LDO LUBES FO/LSHS BITUMEN PET COKE OTHERS

Production Consumption

29 Oman Daily Observer. (2020, September 10).

in 2019 reached 4.9 million barrel a day (b/d), compared to less than 1 million barrel a day of total domestic liquids production. According to the BP Statistical Review of 2019, India’s need for energy supply continues to climb as a result of the country’s dynamic economic growth, population growth, and modernization over the past several years. Primary energy consumption in India has nearly tripled between 1990 and 2018, reaching an estimated 916 million tonnes of oil. Coal continued to supply about 45% of India’s total energy consumption in 2018, followed by petroleum and other liquids by 26%, and traditional biomass and waste by about 20%. India enjoys a number of energy sources: non-renewable energy such as coal, lignite, oil and natural gas; and renewable energy such as wind, solar energy, hydropower, biomass, and sugarcane bagasse. All these renewable fuel sources make up a small portion of primary energy consumption, although the capacity potential is significant for several of these resources, such as solar, wind, and hydroelectricity. Although natural gas accounts for 6% of the country’s energy consumption, India plans to boost the natural gas market share to 15% by 2030 as part of the country’s plan to reduce air pollution and use cleaner-burning fuels. The EIA report points out that India’s total petroleum and other liquids production has hovered at about one million barrel a day since 2010, although EIA expects production to fall in 2020. About two-thirds of India’s total liquids production from crude oil and condensate, which has gradually declined over the past few years and fell 40,000 barrels per day (b/d) to 667,000 b/d in 2019.30 Almost half of India’s crude oil production is from offshore fields, although this share has dropped in the past several years as production from the large, ageing Mumbai High field has declined. The only sizeable project expected to come online in the next few years is Oil and Natural Gas Corporation’s 78,000 b/d KG-D5 deep water oil and natural gas development starting in 2021. As of 2019, India had 5.0 million b/d of nameplate refining capacity, making it the second-largest refiner in Asia after China. The two largest refineries by crude oil capacity, located in the Jamnagar complex in Gujarat, are worldclass export facilities and are owned by Reliance Industries. The Jamnagar

refineries account for 27% of India’s current capacity. Several refiners have incrementally increased the crude oil processing capacity through small expansions at existing facilities. However, bringing new facilities has been slow over the past few years, and no new projects are slated to come online until the mid-2020s. The state-owned refiners are upgrading their facilities to

30 Country Analysis Executive Summary: India, EIA. (2020, September 20).

Total energy consumption in India, 2018

coal 45% biomass and waste 20% nuclear 1% hydroelectric 1% other renewables 1%

petroleum and other liquids 26%

natural gas 6%

Source: International EnergyAgency, World Energy Outlook 2019

comply with a new government requirement to produce oil products with the equivalent of Euro VI emission standards by April 2020. As mentioned at the beginning, India has been building a strategic petroleum reserve (SPR) to ensure the country does not have supply disruptions and to add to existing commercial storage capacity. India completed its first phase of SPR construction at the end of 2018. The first phase included three locations (Visakhapatnam, Mangalore, and Padur) and has a total capacity of 39 million barrels, which represents about 10 days of crude oil demand coverage. The government launched a second SPR phase in October 2018 and plans to construct another 48 million barrels and add another 12 days to crude oil demand storage. To take advantage of low international oil prices and reduce its oil import costs, India had filled more than 270 million barrels in strategic and commercial reserves in tanks, pipelines, and ships by May 202031 . On the other hand, Oman’s total oil reserves stood at around 4,843 million barrels at the end of 2019, approximately 52 million barrels higher compared to the end of 2018. The increase came as a result of evaluation of the existing/ new fields and additions from new exploration operations after deducting the quantity produced in 2019. In the field of gas reserves, about 0.46 trillion cubic feet of gas were added to the Sultanate’s total gas reserves, which stood at about 23.82 trillion cubic feet at the end of 2019, compared to 24.65 trillion cubic feet at the end of 2018 – after deduction of the quantities produced in 2019. Therefore, gas reserves were about 0.84 trillion cubic feet less by

31 FACTS Global Energy, Asia Pacific Petroleum Databook.

the end of 2019 compared to the end of 2018, the Ministry of Energy and Minerals (formerly known as Ministry of Oil & Gas) said in its 2020 annual briefing.32

As for gas reserves, about 0.46 trillion cubic feet of gas were added to the Sultanate’s total gas reserves, which stood at about 23.82 trillion cubic feet at the end of 2019, compared to 24.65 trillion cubic feet at the end of 2018 – after deduction of the quantities produced in 2019. Therefore, gas reserves were about 0.84 trillion cubic feet less by the end of 2019 compared to the end of 2018. The average daily production of oil in 2019 was about 971,000 barrels per day, confirming the Sultanate’s commitment with OPEC countries to reduce production and narrow the gap between supply and demand. The average daily production of natural gas (in addition to gas imported from Dolphin) reached about 128 million cubic metres per day compared to 125 million cubic metres per day in 2018, including 99 million cubic metres of non-associated gas, 23 million cubic metres of associated gas and 5 million cubic metres of gas imported from Dolphin. Strategic projects and economic diversification plans in the Sultanate are considered the backbone of sustainable development. Through such projects and plans, the Ministry of Energy and Minerals seeks to create promising investment opportunities, attract and expand investments and join hands with partners to benefit from their technical expertise to increase local production and create job opportunities for Omanis. The Government of Oman is making continuous efforts to encourage joint investments by local and international private sector companies in the oil, gas and electricity sectors in various projects and fields ranging from exploration to development, establishment of gas-based projects and ancillary service projects to support the petroleum industry and energy projects.

Renewables

Along with cooperation in the field of traditional energy security, Oman and India are also looking for opportunities in the field of non-traditional energy security. The two countries have agreed to work on renewable sources of energy. Oman has also reiterated India’s offer to share India’s experience and capabilities with Oman in development of its renewable sources of energy such as solar and wind power. “The cooperation between the governments of Oman and India has been very noticeable in the field of Energy or Energy related projects. Over the last three decades there have been few significant projects executed. Also not to forget a large chunk of the employees working in the energy sector directly or in

32 Oman Ministry of Oil and Minerals. Business live ME.

the feeder sectors have been the Indian workforce,” points out Alkesh Joshi, MENA Energy Tax Leader, Ernest and Young33 . In 2019, India installed 7.3 GW of solar power across the country, establishing its position as the third-largest solar market in the world. With a potential capacity of 363 GW and with policies focused on the renewable energy sector, Northern India is expected to become the hub for renewable energy in India. According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflow in the Indian non-conventional energy sector stood at US$ 9.22 billion between April 2000 and March 2020. More than US$ 42 billion has been invested in India’s renewable energy sector since 2014. New investment in clean energy in the country reached US$ 11.1 billion in 2018.

As one of the objectives of Oman Vision 2040 and the National Energy Strategy, Oman wants to expand its electricity generation capacities through renewable power projects and derive at least 30% of electricity from renewables by 2030. For this purpose, the country has embarked on many projects including a wind farm in Dhofar, two solar IPPs in Manah, 11 solardiesel hybrid facilities and the ‘Sahim’ initiative to install small-scale solar panels on residential and commercial buildings, among others. In hopes of building its renewable energy capacity not only from top down, but also from bottom up, Omani authorities are encouraging the growth of rooftop solar panels for homeowners and allowing them to sell excess electricity back to the central grid. Although renewables still constitute a tiny portion of Oman’s overall energy mix (0.5%), the percentage is slowly growing. In 2018, Oman restructured its utilities sector, making the Ministry of Oil & Gas (MOG) the main policymaker for all energy projects, and the MOG has also led on the implementation of several renewable energy projects. In February 2019, a consortium led by Japan’s Marubeni signed a power purchase agreement (PPA) with PDO Oman to develop a 100MW PV solar project at Amin. In March 2019, a consortium of Saudi and Kuwaiti firms secured financing for the 500 megawatt (MW) solar photovoltaic (PV) independent power project (IPP) at Ibri in Oman. The Beijing-based Asian Infrastructure Investment Bank (AIIB) loaned US$ 60 million of the US$ 275 million total amount, heralding AIIB’s the first renewable energy financing in Oman and the region. The financial deal was imperative to the bid’s success. A renewable energy development plan unveiled by the Oman Power and Water Procurement Company (OPWP) — the sole buyer of electricity in

33 Indian Renewable Energy Report 2020.