Last Updated: February 27, 2015
Carlos A Cabrera
President and CEO, UOP - a Honeywell company
Updated: December, 2014
SECTORAL REPORT | October, 2014
The oil and gas sector is one of the six core industries in India. It is of strategic importance and plays a pivotal role in influencing decisions across other important spheres of the economy.
India is the fourth-largest energy consumer (2013) of oil & gas in the world, accounting for 37 per cent of total energy consumption. Oil consumption is estimated to reach four million barrels per day (MBPD) by FY16, expanding at a compound annual growth rate (CAGR) of 3.2 per cent during FY08-16. By 2025, India is expected to overtake Japan to become the third-largest consumer of oil.
The country has 5.7 billion barrels of proven oil reserves. It had 47.8 trillion cubic feet (TCF) of gas reserves and produced 33.7 billion cubic meter (BCM) of gas in 2013.
India has 19 refineries in the public sector and three in the private sector. In FY14, public sector refineries accounted for 53.4 per cent of total refinery crude throughput.
India has 9,460 km of crude oil pipelines and 14,083 km of product pipelines.
Backed by new oil fields, domestic oil output is anticipated to grow to 1 MBPD by FY16. With India developing gas-fired power stations, consumption is up more than 160 per cent since 1995. Gas consumption is likely to expand at a CAGR of 21 per cent during FY08–17.
Domestic production accounts for more than three-quarter of the country’s total gas consumption.
India increasingly relies on imported LNG; the country was the fifth-largest LNG importer in 2013, accounting for 5.5 per cent of global imports. India’s LNG imports are forecasted to increase at a CAGR of 33 per cent during 2012–17.
State-owned ONGC dominate the upstream segment (exploration and production), accounting for approximately 60 per cent of the country’s total oil output (FY13).
IOCL operates 11,214 km network of crude, gas and product pipelines, with a capacity of 1.6 MBPD of oil and 10 million metric standard cubic metre per day (MMSCMD) of gas. This is around 30 per cent of the nation’s total pipeline network. IOCL is the largest company, operating 10 out of 22 Indian refineries, with a combined capacity of 1.3 MBPD.
Reliance launched India’s first privately owned refinery in 1999 and gained considerable market share (30 per cent). Essar’s Vadinar refinery has a capacity of 20 MMTPA, currently accounting for around 10 per cent of total refining capacity.
According to data released by the Department of Industrial Policy and Promotion (DIPP), the petroleum and natural gas sector attracted foreign direct investment (FDI) worth Rs 31,620 crore (US$ 4.97 billion) between April 2000 and September 2014.
Following are some of the major investments and developments in the oil and gas sector:
Three landmark initiatives for energy efficiency – Design Guidelines for Energy Efficient Multi-Storey Residential Buildings and Star Ratings for Diesel Gensets and for Hospital Buildings – were launched by Mr Dharmendra Pradhan, Minister of State with Independent Charge for Petroleum and Natural Gas, Government of India.
Some of the major initiatives taken by the Government of India to promote oil and gas sector are:
India has been among the world’s fastest growing economies. With expanding economy comes an increasing demand for energy and, if current trends continue, India will be the world’s third largest energy consumer by 2020.
Due to the expected strong growth in demand, India’s dependency on oil imports is likely to increase further. Rapid economic growth is leading to greater outputs, which in turn is increasing the demand of oil for production and transportation.
The National Gas Hydrate Programme (NGHP) Expedition-02 and 03 are under advanced stage of planning and are due in the period 2014 - 2017. Under the programme the government plans to core 20 sand prone sites and drill 40 wells.
Exchange Rate Used: INR 1 = US$ 0.0157 as on December 26, 2014
References:Media Reports, Press Releases, Press Information Bureau, Ministry of Petroleum and Natural Gas
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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