Overview of the Oil & Gas Industry Securing Energy and Feedstock Supplies for India's Economic Rise
India's rise towards becoming an Asian economic powerhub is directly dependent on yupply with crude oil and natural gas. Yet, most of the country's feedstocks come from overseas... Can unexplored reservoirs or unconventional resources stem the tide? Here is an outlook on the Indian production of oil and gas and its effect on the economy
The Core Sector Index, which measures the output of eight infrastructure sectors, rose 2.6 per cent in August 2015, compared with 1.1 per cent in the previous month, according to recently released data. The eight sectors included in the index are coal, steel, cement, natural gas, fertilizer, crude oil, refinery products and electricity.
Seven out of the eight sectors included in the index posted positive growth with natural gas production finally bouncing back into the positive zone after many years of decline reportedly because of falling output from the KG-D6 basin field. Only steel posted negative growth at 5.9 per cent, possibly because of a flood of imports.
Indian crude oil and natural gas sector
The crude oil and natural gas sector is divided into three major segments—upstream, midstream and downstream. The upstream segment is also known as the exploration and production (E&P) sector.
Upstream: crude oil production trails consumption
India’s oil and gas demand is met by imports, which amounts to about 80 per cent. The country consumes nearly 5 per cent of the global crude oil consumption. The Indian oil and gas sector is traditionally dominated by national oil companies. The key focus area for India’s future upstream sector is to increase the domestic production by encouraging exploration to meet the demand.
The introduction of New Exploration Licensing Policy (NELP) has proved to be successful in attracting the interests of national oil companies as well as private domestic along with a few overseas players.
The crude oil production in 2014–15 (till December 2014) was about 28.171 million metric tonne (MMT). In 2014–15, the share of offshore crude oil production was about 50.2 per cent. The remaining crude oil production was from states such as Rajasthan and Gujarat. Crude oil accounts for about 28 per cent of the total energy basket of the country.
Crude oil production has more or less remained stagnant over the last few years; it is expected to increase in the coming years with new production wells coming up in 2017–18.