India should get into long-term oil tie-ups, says expert

To meet its future energy needs at low cost, India should acquire oil assets overseas and if its workable enter into long-term bilateral development and supply agreements with oil-exporting countries.

Equentis Capital Director Vikram Dhawan said in a research report in Mumbai that India’s status as oil consumer will grow in the world in the next decade and limited oil reserves pose a threat, the country should use this period of relative calm in oil markets to acquire oil assets overseas.

Dhawan said that while sentiment towards oil prices may be subdued in the near-term on account of softer demand growth coupled with supply surge, it will be foolhardy to presume stable or lower prices for the longer term. Declining oil prices may be a short to medium term phenomena as OPEC may support prices next year and alternate sources require higher prices for viability, the report said.