China’s real GDP has increased continuously at surprising rate of 10% per year in recent years. Simultaneously with strong economic growth, its demand for energy is also surging rapidly. The figure 1 clearly shows about the oil consumption and production behavior of the country which tends the country to import from different countries. China produces 3798 thousand barrels per day and consumes 8200 thousand barrels per day of oil in 2009. This means that China has to import roughly 4402 thousand barrels per day to meet its consumption needs per day. In the year 2007, China was declared as the world’s third largest net importer of oil behind the U.S and Japan. In July 2005, the reform of the exchange rate system was introduced by the central bank of China. After the reforms, the exchange rate of yuan was set according to a basket of other currencies. At the end of 2007, the yuan was appreciated by 7.5% approx. against the dollar, in consequence of these reforms.
According to the Oil & Gas Journal (OGJ), India had second-largest amount of proven oil reserves i.e. 5.6 billion barrels in the Asia-Pacific region after China as of January 2009. With a population more than 15 % of the world and high rates of economic growth , India has become one of the important consumer of energy resources. In the year 2006, India was the sixth largest oil consumption country of the world. The worldwide credit and financial crises have slowed India’s significant economic growth especially in its manufacturing sector.
Due to this crunch, the GDP growth rates have turn down in 2007 from 9.3 % to 5.3 % in the last quarter of 2008. Despite of this slow economic growth, India's energy demand continues to rise. The accelerated country growth was averaged at 7% since 1997 and the main factor behind this was the early 1990s economic liberalization, including fewer controls on foreign trade and investment. In early 2008, an industrial slowdown, followed by the worldwide financial crisis, led annual GDP growth reduction to 6.5%.. From the figure 2 it can easily be observed that the production of crude oil is not upto that level to meet consumer demand which tends the country to import from outsiders. From 1996 onward India is producing oil approximately with the same trend but consumption is increasing day by day. In the year 2009, India produced 680.4 thousand bbl/d of total oil out of which approx. 650 thousand bbl/d was crude oil, with the rest of production resulting from other liquids and refinery gain. According to OGJ , India has over 3,600 operating oil wells. Although in recent years, the oil production in India has slightly trended upwards but it has failed to keep pace with demand and is decline slightly in 2009 as expected by the EIA. In recent years, India's oil consumption has continued to be robust. In 2007, India consumed approx 2.8 million barrel per day, making it the world’s fifth largest consumer of the oil. In the year 2006, India was the...