FINANCIAL ANALYSIS

Case study on international Dec



Case study on international Dec

Introduction

The oil and gas sector is considered as one of the furbishing industry in the country and played a vital role in country economic enhancement and growth. From over the years, India has been witnessing a growth at a normal pace, is planning to accelerate its growth trend in future. Especially in the petroleum sector as this country will observe a comprehensive growth in the requirement of oil and gas in daily lives of the people of country (Shukla & Dhar, 2009).

For this reason, government must emphasized on the urgency for broader exploration of new energy sources that might be useful in carting future needs, and with this the authorities must formulate an optimal pricing policy. In addition to this, government must ensure proper implementation of theses policy to cope up with global price fluctuation and for the benefit of global energy crises (Sahu & Parekh, 2012).

Further, the oil and gas sector of the country has great strategic value and has a vital part in decision-making process of other political, social, and economic aspects of the country. Most importantly this industry has witness a formidable growth and which has forced the authorities to expand their level of searching, used modern tools for fuel extractions, and develop a sound policies to carter all the future problems (Jackson, 2012).

The energy sector has a direct relation with the economic development and growth of the country, and for that, it is necessary to ensure its affordability for every sector as it will lead towards the enhancement in living standard of general population but will also increase the demand of the natural products. Hence, in above context the ministry of petroleum has ensured to take appropriate steps for exploration of natural resources like natural gas, (CBM) coal bed methane and others.

Hence, for this purpose in year 1999 government of India has formulated a new Exploration licensing policy (NELP) and plan to improve the current extraction process. With all these positive steps, the country has witnessed an approximate 12 percent increase in the production of crude oil in 2011-10, further, 10 percent of increase in the production of natural gas from preceding years (Sambamurthi & Batra, 2003).

Economic risk assessment of Indian oil and gas sector

No doubt, that Indian oil and gas industries has able to achieve a comprehensive growth from a decade or so but there are certain economic risk that required to be analyzed before investing in the Indian oil industry.

Discussion

Macro picture of Indian economy

After witnessing the current growth in the economy it has been expected that during the period of 2010-2030 GDP (gross domestic product) will witness fluctuation growth, and it has been observed that with current economic condition growth rate will remain within 8-10 percent in future. Based on this projection it could be assumed that country would require adequate investment to achieve this growth rate (Ernst and young, 2011).

However, the overall economy of the country is expected to face a slight decline ...