The Indian Oil and Gas (O&G) sector is one of the six core industries of India and contributes over 15 per cent to the Gross Domestic Product (GDP). The country is the sixth largest consumer of oil in the world and the ninth largest crude oil importer.
The sector is of immense importance to the economy owing to its significant forward integration with many other sectors. India is committed to boosting its growth in the years to come and this progress would translate into the country’s energy needs growing many times. The need of the hour, therefore, is to channelise all efforts on exploration of new blocks effectively as well as efficiently.
The growing demand for crude oil and gas in the country coupled with policy initiatives of the Government of India towards increased E&P activity has given a great impetus to the growth of this sector.
Crude oil production, as indicated by the core sector index, accounts for over 5 per cent of India's index of industrial production (IIP).
Diesel consumption increased by 4.2 per cent year-on-year (y-o-y) in April 2013 to 6.2 million tonnes (MT), according to data compiled by the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas. The growth in diesel consumption was faster than other petroleum products.
The overall consumption of petroleum products increased 3.1 per cent y-o-y in April 2013, PPAC data indicated.
Natural Gas has emerged as one of the most preferred fuel owing to its environment-friendly properties, greater efficiency and cost effectiveness.
India's shale gas reserves are at about 290 trillion cubic feet (TCF), of which 63 TCF could be recovered, according to a study by US Energy International Agency. Shale gas is natural gas formed from being trapped within shale formations.
Natural gas sector constitutes about 9.8 per cent of primary energy consumption which is projected to grow up to 20 per cent by 2025 as per Indian Hydrocarbon vision. About 65 per cent of natural gas consumption is accounted by power and fertiliser sectors. Petroleum and Natural Gas Regulatory Board chairman S. Krishnan emphasises on the need to develop a strategy to meet substantial share of energy needs from natural gas and take its contribution in the country’s energy basket from 9.8 per cent to 25 per cent in the medium term.