India on December 15, asked OPEC for a "reasonable and responsible" oil pricing to support developing economies even as the cartel that accounts for 40 per cent of the world output said rates will rebound from around 11-year lows within a year.
At the first institutional dialogue between the world's fourth-largest oil importer and the Organisation of Petroleum Exporting Countries (OPEC), Oil Minister Dharmendra Pradhan gave the cartel a perspective of an importing county and sought moving beyond buyer-seller relationship to a more participative partnership.
"About 85 per cent of our total oil imports and 95 per cent of gas imports come from OPEC nations. OPEC has a major role in shaping oil prices and availability," he told reporters after meeting OPEC Secretary General Abdullah al-Badri under the India-OPEC Dialogue.
OPEC holds such dialogue with major consuming centres like the US, European Union, Russia and China. This was the first such institutional dialogue with India.
"We gave him the perspective of major buyer of crude and market. We feel a reasonable and responsible price will best serve the world economy," he said. Al-Badri on his part said OPEC too was "looking for a reasonable price."
The oil cartel, he said, is not targeting a price.
"We are not looking at a higher price and not also looking for a lower price. And we are looking for a fair price because we know higher price for a few years is good for producers but will not be good for consumers. And it will be vice-versa." "
Low prices, now a lot of people are saying is good for the consumers. (But) it is not good for consumers. The good price for consumer is a price where you can really invest. So what we are looking at is a fair price," he said.
He said during his life he has seen six oil cycles of high and low prices.
"This (low oil price) will not continue. Few month or a year or so, you will see this will change."
Stating that OPEC has not cut production to keep oil prices supplied even though rates have hit 11-year low of less than USD 35 per barrel, he said fair price means a rate where OPEC nations have a decent income.
"Also where we can invest, investment to have more supplies to the consumers."
Explaining the scenario, he said because of low prices USD 130 billion of exploration and production investments worldwide have been cut, meaning there would be no more supplies coming in years to come.
"If there is no more supplies, there will be less supply to the market. Less supply to market means, there will be higher prices."
With low oil prices making several projects unviable, non-OPEC production will decline by 4,00,000 barrels per day (20 million tonnes a year) by 2016.
"For OPEC, we still can produce with the current price," he said.
On impact of US beginning to export oil, he said there will be no impact on the prices as US is still an importing country.
"They export some but they need to import the same quantity from somewhere else. May be they want to sell light oil... and they would like to import heavy crude. So the net effect of export from American oil on the market is zero."
He said fossil fuels - coal, crude oil and gas, will continue to have a dominant share in the world energy basket with their share dropping to by only 2 per cent to 78 per cent by 2040 from current 80 per cent.