Oil Industry in India

As the Oil prices are approaching US$ 70 per barrel, let me take the opportunity to give you a brief on Indian Oil Industry and statistics, to see how India is compared to the world:

Snapshot of today's oil prices:

Given the limited domestic availability of crude oil and natural gas, the country is compelled to import over 75% of its domestic requirement.
The crude oil production during the year 2016-17 is at 36.009 Million Metric Tonnes (MMT) as against production of 36.942 MMT in 2015-16, showing a decrease of 2.53%.

Natural Gas production during the year 2016-17 is at 31.897 Billion Cubic Meters (BCM) which is 1.09% lower than production of 32.249 BCM in 2015-16.

Government has taken several policy initiatives and reforms in the hydrocarbon sector which includes
• new Hydrocarbon Exploration and Licensing Policy (HELP),

• Discovered Small Field Policy,
• marketing and pricing freedom for new gas production from Deepwater, Ultra Deepwater and High Pressure-High Temperature areas,
• extension of Production Sharing Contracts for small and medium size fields,
• linking the transparent new gas pricing formula to the global market, early monetization of hydrocarbon discoveries,
• policy on testing requirements for discoveries in NELP block,
• reassessing the hydrocarbon potential in India’s sedimentary basin, appraising about 1.5 million square kilometers unapprised basins and
• operationalization of National Data Repository.
Plan Outlay for Ministry of Petroleum & Natural Gas: The actual Plan expenditure in 2016-17 was ₹96935.29 crore against Budget Estimate (BE) of ₹79651.42 crore.

Trends: Production

Trend: Consumption:

Exploration in India:

• With a view to explore oil and gas finds, over 4.91 lakh geological surveys have been conducted in India and 540 wells (of which 74% are development wells) with 12.45 lakh meterage area drilled by Oil Companies up to 31.03.2017.
• Balance recoverable reserves of crude oil as on 01.04.2017 are at 604.10 MMT, out of which 279.86 MMT (46%) are in offshore. ONGC (nomination) has the largest share of 72% in reserves of crude oil with OIL (nomination) and PSC regime contributing 13% and 15% respectively.
• Balance recoverable reserves of natural gas as on 01.04.2017 were 1289.81 BCM, out of which 810.10 BCM (62%) are in offshore. PSC regime has the largest share of 49% in natural gas reserves with ONGC (nomination) and OIL (nomination) at 41% and 10% respectively.
• Out of total crude oil & condensate production of 31.01 MMT in 2016-17, 62% (22.218 MMT) is from ONGC (nomination), 9% (3.258 MMT) from OIL (nomination) and 29% (10.532 MMT) from PSC regime
• Out of total natural gas production of 31.897 BCM in 2016-17, 69% (22.088 BCM) is from ONGC (nomination), 9% (2.937 BCM) from OIL (nomination) and 22% (6.872 BCM)) from PSC regime.
• Maximum production of crude Oil (9.678 MMT) occurred in Mumbai High asset of ONGC and maximum production of natural gas (10.131 BCM) occurred in Bassein & Satellite fields of ONGC in 2016-17.
• Total consumption of natural gas in 2016-17 stands at 50.777 BCM as against 47.849 BCM in 2015-16. Out of 50.777 BCM, 29.534 BCM (58%) is consumed for energy purpose as fuel and the balance 42% is used for non-energy purpose as feedstock for various industries.

India in comparison to world:

World Proven Oil Reserves (Till 2016):
North America: 227.5 thousand million barrels (Percent share 13.3%)
South and Central America: 19.2 thousand million barrels (Percent share 19.2%)
Europe and Eurasia: 161.5 thousand million barrels (Percent share 9.5%)
Middle East: 813.5 thousand million barrels (Percent share 47.7%)
Africa: 128.0 thousand million barrels (Percent share 7.5%)
Asia Pacific (Including India) 48.4 thousand million barrels (Percent share 2.8%)

India: 4.7 thousand million barrels (Percent share 0.3%)

World Crude Oil Production (Till 2016):

North America: 882.6 million Tons (Percent share 20.1%)
South and Central America: 384.5 million Tons (Percent share 8.8%)
Europe and Eurasia: 860.6 million Tons (Percent share19.6%)
Middle East: 1496.9 million Tons (Percent share 34.2 %)
Africa: 374.8 million Tons (Percent share 8.6%)
Asia Pacific (Including India) 383.0 million Tons (Percent share 8.7%)

India: 40.2 million Tons (Percent share 0.9%)

World Oil Consumption:

North America: 1046 million Tons (Percent share 23.7%)
South and Central America: 326.2 million Tons (Percent share 7.4%)
Europe and Eurasia: 884.6 million Tons (Percent share 20.0%)
Middle East: 417.8 million Tons (Percent share 9.5%)
Africa: 185.4 million Tons (Percent share 4.2%)
Asia Pacific (Including India) 1557.3million Tons (Percent share 35.2%)

India: 212.7 million Tons (Percent share 4.8 %)

So, from the above trend, we see that India has a long way to go.

MoPNG is promoting HELP (New policy) to increase the exploration in India and invest foreign investment.

I will write more on the industry after HELP is concluded.