Announcement of India to Reduce Dependence on Imported Oil on February 4, 1988

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 88/40 Contact: Richard Kollodge (202) 477-4507 INDIA TO REDUCE DEPENDENCE ON IMPORTED OIL WASHINGTON, February 4, 1988 -- India aims to reduce its dep~ndence on imported oil--currently 30 percent of total consumption --by developing its natural gas fields and improving gas production. The World Bank is supporting the government's efforts with a $295 million loan. Production from India's oil fields is reaching a plateau at a time when industry is demanding more energy. India will be more able to meet demand by tapping into abundant natural gas reserves- -estimated at 700 billion cubic meters, equal to about 570 million tons of oil. The World Bank loan will finance measures to expand the coun- try's gas markets and boost the capacity· o·f· India's Oil and Natural Gas Conunission and the Gas Authority of India to draw up plans for economical development and use of gas resources. A pipeline to be constructed between the offshore gas field at Heera to the mainland, along with new processing facilities, is expected to increase production from 10 million to 20 million cubic meters of gas a day. Studies of the country's natural gas reserves and production systems will be conducted. The World Bank loan is for 15 years, including five years of grace, with a variable interest rate, currently 7.72 percent, linked to the cost of the Bank's borrowings. It also carries an annual com- mitment charge of 0.75 percent on the undisbursed balances. Note: Money figures are in U.S. dollar equivalents.