India is the world's fifth-largest energy consumer in the world; oil accounts for 30 per cent of the total energy consumption. Buoyant economic growth is the main factor driving the country's energy requirements.
The country has 9 billion barrels of proven oil reserves with an average oil production of 0.9 million barrels per day (MPBD). Oil consumption is estimated to rise from 3.1 MPBD in 2008 to 4.1 MPBD by 2016, a compound annual growth rate of 3.6 per cent. India has 1,450 billion cubic meters (BCM) of gas reserves, which produce 52 BCM annually (2011).
Total crude production stood at 33.3 million metric tonnes (MMT) during FY11. The total crude pipeline network in India is 6,518 kilometers (km) with a total capacity of 99.6 million metric tonnes per annum (MMTPA). In total, India has 21 refineries, 18 in the public sector and 3 in the private sector and public sector refineries accounted for 56 per cent of the total refinery crude throughput.
Government has enacted various policies, such as the New Exploration Licensing Policy (NELP) and Coal Bed Methane (CBM) Policy, to encourage investments across the industry's value chain. 100 per cent foreign direct investment (FDI) was allowed in the exploration and production (E&P) projects/ companies; and 49 per cent was allowed in refining. Since 2005, FDI worth US$ 2.2 billion was invested in the petroleum and natural gas sectors in India. Investments worth US$ 563 billion is expected across the oil and gas value chain under the Eleventh Plan (2007-12). The total FDI inflow in the Indian petroleum and natural gas stands at US$ 3.2 billion during April 2000-April 2011.
Oil consumption is expected to rise 42.5 per cent during 2010-20. 78 per cent of the country's sedimentary area is yet to be explored. The nation offers abundant skilled labour at much competitive wages compared to other countries.