No Easy Answers To Energy Security Concerns
BMI View: India's rising oil import burden combined with competition for acreage in Africa has driven an uptick in interest in Latin America's substantial resource wealth in recent quarters. However, we caution that above-ground challenges in countries like Brazil, Venezuela and Canada could make these investments slow to pay off.
We expect India to face a rising oil import burden over the coming decade - a consequence of increasing consumer demand coupled with disappointing oil production on the back of a poor business environment. Energy security concerns are a problem common to many Asian nations, and indeed, we have previously highlighted similar dynamics playing out in multiple countries across the region, prompting a massive influx of investment into Africa. However, with Chinese firms benefitting from greater financial backing, this has seen India struggle to keep pace in the scramble for access to new resources. While this has prompted an uptick in interest among Indian companies in the Americas as of late, we note that above-ground issues in many of these countries targeted for investment are likely to ensure that these investments are slow to pay off.
Rising Import Burden
|Demand Driving Ahead|
|India - Oil Production, Consumption & Net Imports|