Last Updated: July 06, 2020
Last Updated: March, 2020
The oil and gas sector is among the eight core industries in India and plays a major role in influencing decision making for all the other important sections of the economy.
India’s economic growth is closely related to energy demand; therefore, the need for oil and gas is projected to grow more, thereby making the sector quite conducive for investment.
The Government of India has adopted several policies to fulfil the increasing demand. The government has allowed 100 per cent Foreign Direct Investment (FDI) in many segments of the sector, including natural gas, petroleum products, and refineries, among others. Today, it attracts both domestic and foreign investment, as attested by the presence of Reliance Industries Ltd (RIL) and Cairn India.
India had 4.5 thousand million barrels of proven oil reserves at the end of 2018 and produced 39.5 million tonnes in 2018. As of Apr 01, 2019, India had a network of 10,419 km of crude pipeline having a capacity of 145.6 mmtpa.
India is expected to be one of the largest contributors to non-OECD petroleum consumption growth globally. Oil imports rose sharply to US$ 87.37 billion in 2017-18 from US$ 70.72 billion in 2016-17. India retained its spot as the third largest consumer of oil in the world in 2017 with consumption of 4.69 mbpd of oil in 2017, compared to 4.56 mbpd in 2016.
As of December 1, 2019, the oil refining capacity of India stood at 238.60 million tonnes, making it the second largest refiner in Asia. Private companies own about 35.36 per cent of the total refining capacity.
India was the fourth-largest Liquefied Natural Gas (LNG) importer in 2017 after Japan, South Korea and China. LNG imports increased to 26.11 bcm in 2017-18 from 24.48 bcm in 2016-17. India’s LNG imports stood at 27.43 billion cubic meters (bcm) during April 2019-January 2020.
Gas pipeline infrastructure in the country stood at 16,226 km at the beginning of February 2019.
India’s domestic crude oil production in July 2019 is 2,769 thousand tonne (TMT). As of 2017, the country had 600 million metric tonnes (MMT) of proven oil reserves.
In FY19, total crude oil imports were valued at US$ 111.96 billion as compared to US$ 87.70 billion in FY18. In FY19, crude oil imports increased to 4.53 mbpd from 4.41 mbpd in FY18.
Production of petroleum products by fractionators grew to 4,931.22 tmt in FY19 from 4,808.00 tmt in FY18 and reached 3,179 TMT in FY20 (till November 2019).
According to data released by the Department for Promotion of Industry and Internal Trade Policy (DPIIT), the petroleum and natural gas sector attracted FDI worth US$ 7.07 billion between April 2000 and December 2019.
Following are some of the major investments and developments in the oil and gas sector:
Some of the major initiatives taken by the Government of India to promote oil and gas sector are:
Following are the achievements of the government during 2018:
Energy demand of India is anticipated to grow faster than energy demand of all major economies, on the back of continuous robust economic growth. India’s energy demand is expected to double to 1,516 Mtoe by 2035 from 753.7 Mtoe in 2017. Moreover, the country’s share in global primary energy consumption is projected to increase by 2-folds by 2035.
Crude oil consumption is expected to grow at a CAGR of 3.60 per cent to 500 million tonnes by 2040 from 221.76 million tonnes in 2017.^
Natural Gas consumption is forecasted to increase at a CAGR of 4.31 per cent to 143.08 million tonnes by 2040 from 54.20 million tonnes in 2017.^
Diesel demand in India is expected to double to 163 million tonnes (MT) by 2029-30.
Note: Conversion rate used as on January 2020, Re 1 = US$ 0.01402
References: Media Reports, Press Releases, Press Information Bureau, Ministry of Petroleum and Natural Gas, Petroleum Planning and Analysis Cell, News Articles, International Energy Agency
Note: ^As per BP Energy Outlook 2019
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Last Updated: July 06, 2020
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