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Speaking on the ‘Survival Challenges for Oil Economy’ at The Economic Times Global Townhall, ONGC CMD Subhash Kumar asserted that the oil & gas industry is on growth path, regardless of where the fast-pace energy transition leads to. Mr Kumar noted that fossil fuels will continue to play a dominant role in global economy for several decades to come.

CMD said that India and China are going to be the major demand drivers for oil & gas in the coming years. He noted that India is on the fastest track and is going to reach consumption of 10 million barrels per day by 2030 – almost double the consumption today. “Natural gas consumption is projected to witness a bigger rise at Cumulative Annual Growth Rate (CAGR) 4.18 per cent to over 143 million tons till 2040.

CMD Subhash Kumar addressing on ‘Survival Challenges for Oil Economy’ at the ET Global Townhall
CMD Subhash Kumar addressing on ‘Survival Challenges for Oil Economy’ at the ET Global Townhall

Mr Kumar said that the oil & gas industry should ready itself to be responsive to increased scrutiny from regulators, investors and financial institutions to adopt better environmental, social and governance (ESG) practices – which is emerging as a key business element during the ongoing energy transition. “The policy reforms introduced by the government in the recent past are ushering in a profound impact in the oil economy.”

On the future of oil economy, CMD noted that despite the increasing need for renewables, oil & gas will serve humanity in several ways – not only for industrial purposes but for non-energy use too. He highlighted that for a sustainable future, the National Oil Companies (NOCs) and the International Oil Companies (IOCs) should collaborate.

However, Mr Kumar noted that the emerging energy transition towards renewables needs to be taken into stride by the oil industry. “The rate of adoptability of the electronic cars, while being environment-friendly, can dampen the demand for oil & gas, since the transport sector is the major consuming source for it,” said Mr Kumar. CMD asserted that to meet such challenges ONGC is on fast track to monetize oil fields even in the most difficult regions.

He noted that the ONGC Group of Companies has integrated in the hydrocarbon value-chain and has established its presence in both the upstream refineries and the downstream assets like major global energy majors. “The companies which don’t have this kind of integrations are aspiring to achieve it through various policies,” said Mr Kumar, adding that the cyclical nature of the oil prices also can affect the business of the standalone E&P companies.



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