Ministry of External Affairs of Republic of In : Valedictory Address by External Affairs Minister at India-Africa Hydrocarbon Conference 2016 (January 22, 2016)

Shri Dharmendra Pradhan, Minister of State for Petroleum and Natural Gas,
Hon'ble Ministers from Africa,
Distinguished delegates from Africa,
Excellencies,
Senior officials of Government of India,
Ladies and Gentlemen,

• I am pleased to deliver the valedictory address at the conclusion of the Fourth Edition of the India-Africa Hydrocarbon Conference. Let me at the outset thank you all, particularly the delegates from Africa, for participating in the Conference and contributing to its success.
• This Conference has been organized not long after we held the highly successful Third India-Africa Forum Summit in New Delhi in October last year. This shows our continuous interest in strengthening our partnership with Africa in a wide range of areas. As Prime Minister Modi said at the Summit and I quote 'the agenda of our partnership stretches across the vast territory of our linked aspirations.' Unquote.
• We were honoured with the participation of all 54 African countries in the Third India-Africa Forum Summit. We were especially delighted that Heads of State or Government from 41 African countries participated in the event. The Summit was a celebration of the historical, time-tested and strong ties between India and the nation states of Africa. It was also a demonstration of the common vision of peace, growth and prosperity that is shared by India and Africa.
• The Summit showed that both India and Africa have similar views on a range of international issues including UN Security Council reforms, trade, sustainable development, climate change and counter-terrorism. In pursuance of our commitment to assist African countries in their development, we were happy to offer further concessional credit of 10 billion dollars to Africa over the next five years as well as grant of 600 million dollars.

  Distinguished Guests,

• I am glad to note that you have had intensive and productive discussions over the past two days. This underscores the fact that India and the countries of Africa can do a lot together in the area of hydrocarbons and energy.
• I am told that the India-Africa Hydrocarbon Conferences began in 2007 and the last one was held in 2011. This Conference is therefore taking place after a gap of five years. In these intervening years the global energy landscape has significantly transformed with the growth of renewable energy, new technologies to extract oil and gas and more recently rapid fall in oil and gas prices. Oil prices, which were in the region of 120 dollar per barrel in 2011 are today hovering around the 30 dollar mark. Political developments such as security challenges faced by oil and gas producing countries and lifting of sanctions on Iran are also equally significant.
• During these years, India has also grown to become one of the world's largest economies and is currently the fastest growing big economy. Our energy demand has risen rapidly to keep pace with a growing economy and rising incomes. In Africa too change is evident in terms of rising demand, new discoveries of oil and gas, and increasing global engagement in the oil and gas sector. In the wake of all these changes around us, I feel that this Conference is very timely.

  Distinguished Guests,

• As we all know, population and demographics are important drivers of energy demand and changes in the energy mix. On both these counts, Africa and India are set to play a central role in energy issues in this century. This is because Africa's population is expected to double to almost 2 billion people by 2040. Similarly, India may overtake China to become the world's most populous country by the mid-2020s. Both India and Africa are also expected to witness high economic growths and our demand for modern forms of energy is set to rise.
• As for India, we do realize that energy is an essential requirement for our development as it is a vital input in industry, agriculture, health and education. Our development is thus very closely linked to availability and accessibility of energy at an affordable price. A large proportion of our population still does not have access to electricity and modern clean cooking fuels. We are therefore making all efforts to make affordable and reliable energy available to all of our population within the next five to seven years.
• As stated in a recent IEA report, India is set to move to the centre of global energy affairs, accounting for 25% of the rise in global energy use till 2040. India is also expected to account for the largest absolute growth in consumption of hydrocarbons. Today, India is the third largest importer of oil in the world, and the fourth largest importer of LNG. While, we are continuing with our endeavors to step up domestic oil and gas production, there is no denying that our rapidly growing economy will need more and more hydrocarbon imports to meet our energy requirements.
• Another important development in India's hydrocarbon growth story pertains to the refining and petrochemical sector. In recent years, India has emerged as a major refining hub in the Asia- Pacific region and is currently the fourth biggest refiner in the world. Our refining capacity is going to rise further with the commissioning of new refineries and expansion of existing capacity. Last year, we exported petroleum products worth 47 billion dollars, with Africa occupying the second place in our destinations for petroleum products. Our refineries are among the most cost-effective worldwide and we are also geographically well placed to serve markets in both Asia-Pacific and Africa.
• I would encourage African oil producers to take advantage both of our rising demand and our strengths in refining to develop strong partnerships. New discoveries during the last two decades have blessed Africa with doubling of its oil reserves and increase in gas reserves by more than 50%. This puts the continent in the league of most endowed geographical regions. It is heartening to note that these developments have brightened the economic prospects of several countries in Africa. While Africa's own demand for hydrocarbons shows a healthy growth, the new discoveries would also need secure and stable markets for strengthening its position as an oil and gas supplier and its overall economic development.
• It is our desire that India and the hydrocarbon-rich countries of Africa should enjoy a healthy and growing partnership in the hydrocarbon sector across the spectrum - upstream, midstream and downstream. India can partner in establishing the entire supply chain in the hydrocarbon sector beginning from exploration, production, refining, distribution, infrastructure and strategic storage.
• Over the recent years, India has moved to diversify its sources of oil supply and Africa has emerged as an important supplier for India. Approximately 16% of our oil import in the last year was sourced from Africa, and Nigeria rose to the top among our oil suppliers during some periods. This is a very significant development in our energy relationship. Simultaneously, in 2015, our imports of LNG from Africa doubled compared to 2013. The role of Africa in meeting India's LNG needs will also keep growing as more LNG projects are brought online in the coming years.
• Another significant development is that Indian oil companies have expanded their footprint in Africa. Today, Indian companies have a presence in the exploration and production sector in Sudan, South Sudan, Nigeria, Gabon and Libya. They are also working on EPC projects in countries such as Algeria, Libya, Sudan and Ghana and have earned a great reputation as competent and reliable partners in the energy sector.
• Mozambique is a recent example, where investments in excess of 5 billion dollars have been made from 2014, and we hope that gas production will begin within the next three years. Indian companies are also seeking opportunities to participate in the hydrocarbon sector in other countries on the east coast of Africa.
• The rich experience of Indian entities and their expertise in technical consultancy services can be further utilized by the partner countries in Africa for development of energy resources. They would also be useful partners in capacity building programmes. I am hopeful that Indian companies will expand participation in E&P sector in African countries where, in addition to attractive resources, there are assured returns.
• In turn, we can assure our African friends that Indian companies will be sensitive towards local concerns, including environmental concerns, and would contribute towards development and prosperity of local communities. India has always strived for building local capacities and ensuring technology transfers, and would be willing to do the same for African countries across the entire spectrum of energy sector. We strongly believe that Africa's contribution to the energy security of other countries must lead to sustainable development in Africa.
• Government of India has consistently impressed upon the Indian companies, both in the private and public sectors, to participate not simply in the production of oil and natural gas, but to invest in the development of infrastructure, downstream industries and related industries such as fertilizers and power generation in Africa.

  Distinguished Guests,

• Let us not forget that oil is the world's most political commodity and invariably, political instability and conflicts have an impact on the oil market. We are all aware of situations around the world, including in Africa, where political turmoil, civil wars, conflicts and terrorism have seriously damaged oil-based economies and have had adverse impact on the global oil market. It is our fervent hope that peace and stability in such affected areas will be restored so that the advantage of having hydrocarbon resources is not lost. On our part, we have always, without any self interest, participated in major UN peacekeeping efforts in Africa for this purpose and will continue to contribute to such measures whenever called upon.
• I would also like to add that our future cooperation in energy should not be confined to hydrocarbons alone and should focus equally if not more on cooperation in renewable energy. India has gained tremendous expertise over the years in developing its renewable energy programme, particularly in the solar and wind sector. We are the fourth largest wind energy producers in the world. We have the required technology and capacities in solar photo voltaic, biofuels and hydro-power. We would be happy to share our experiences and technologies with our friends in Africa in these areas to ensure development of a robust partnership. We should also continue to work together in multilateral forums to address the issue of climate change in a manner that meets our developmental challenges.
• Today, the price of oil stands at a new low in 12 years. However, as we are all aware, the oil price dynamic is cyclical, and all of us - whether suppliers or consumers, look forward to a balanced and transparent oil market which would be beneficial to all and discriminatory towards none. Our Government is committed to providing reliable and affordable energy to all at reasonable prices, which will be sustainable so that 'energy poverty' gives way to 'energy justice'.

  Distinguished Guests,

• To conclude, I would like to emphasize that in the energy sector, Africa for us, is a natural partner, with its rich resource endowments and rising production of hydrocarbons. This is an opportunity for both India and Africa to forge a commitment to energy security - both security of demand and security of supply. India offers an attractive and reliable market for Africa's energy exports and would be happy to be in the forefront to share its experience and expertise with its African partners. Our complementarity is a win-win proposition which cannot be ignored by either one of us.

Thank you.