Would Saudi Aramco buy BPCL
India wants to ramp up oil and gas production
India is consuming more and more oil and gas, but domestic production is stagnating. In the 2018/19 financial year (April 1 to March 31), crude oil production fell by 4 percent to 34.2 million tons. Although the production of natural gas increased slightly by 0.7 percent to 32.9 million cubic meters, it remained well below the targeted increase in production of 7.7 percent. Consumption, on the other hand, is growing steadily: Since 2014/15, the demand for crude oil has increased by an average of 5 percent per year to last 212 million tons, and that for natural gas by 3 percent to 59 million cubic meters.
Production of crude oil and natural gas in India *)
|Crude oil (million tons)||37,5||36,9||36,0||35,7||34,2|
|Natural gas (million cubic meters)||33,7||32,2||31,9||32,6||32,9|
*) Financial year April 1 to March 31
Source: Ministry of Petroleum and Natural Gas
The dependence on oil and gas imports is growing and is putting a strain on the country's trade balance. In order to increase domestic production, the government wants to facilitate private investment. At the beginning of 2019, the issuing of licenses to explore oil and gas fields was reformed. For example, companies only have to pay part of the profit as a production fee for oil and gas production from already developed deposits (Category I).
In the case of little or no developed fields (category II and III), on the other hand, only the usual license fees, but no profit levies, are due in the first four years. The government hopes that this will result in greater interest in the private sector in the development and commercialization of new deposits. The oil and gas fields are usually owned by the two state-owned companies Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL).
Government expects investment of US $ 210 billion
India's government has been auctioning exploration rights for the deposits as part of the Open Acreage Licensing Program (OALP) since 2017. The fourth round of tenders (OALP-IV) began on August 27, 2019. This time the licenses for seven oil and gas fields will be auctioned, six of them in as yet undeveloped Category III deposits (http://online.dghindia.org/oalp). The responsible authority Directorate General of Hydrocarbons (DGH) expects investments in the exploration of up to 250 million US dollars (US $).
A total of 89 licenses were auctioned in the first three OALP rounds. The Indian government expects that exploration and commercial development of the previously contracted oil and gas fields could result in investments of US $ 210 billion by 2025. The companies that won the first two rounds have already announced investments of almost US $ 20 billion.
Private oil and gas producers are expanding their capacities
India's largest state-owned oil and gas producer ONGC plans to invest a total of US $ 11.5 billion in the commercial development of its 25 largest projects by 2023/24. The private sector is also expanding its capacities. The leading private oil company Cairn Energy has announced that it will invest around US $ 1.1 billion in crude oil production by the end of 2020. The company aims to more than double production to 500,000 barrels per day by 2021/22.
Should the production of oil and gas grow faster again in the next few years, additional capacities will also have to be built in the downstream area. In the 2018/19 financial year, 257.2 million tons of crude oil were refined in India, an increase of 2 percent compared to the same period in the previous year. There are currently 23 refineries in India with a total capacity of 249 million tons per year. The utilization of the facilities averaged 104 percent in 2018/19.
Refinery capacities are expected to more than double by 2040
In view of the increasing demand for oil, the refinery capacities urgently need to be expanded. The Ministry of Petroleum and Natural Gas plans to increase it to 259 million tons per year by 2020, further to 439 million tons by 2030 and to 530 million tons per year by 2040. Both state oil companies - which operate 18 of the 23 refineries - and private corporations have announced major investments.
India's largest oil company, Indian Oil Corporation Ltd. (IOCL) aims to expand its refining capacity to around 117 million tons per year by 2030. In the eleven refineries that the state-owned company operates with its subsidiary Chennai Petroleum Corporation, around 81 million tons of petroleum products were produced in 2018/19. IOCL wants to increase capacities at five locations and build a completely new refinery with an annual output of 9 million tons. The company puts the investment requirement at just under US $ 10 billion.
Refining capacities in India (in 1,000 tons)
|Companies||2017/18 *)||2018/19 *)||Changes in %)|
|Indian Oil Corporation||69.001||71.816||4,1|
|Bharat Petroleum Corporation||28.149||30.823||9,5|
|Hindustan Petroleum Corporation||18.276||18.444||0,9|
|Mangalore Refinery and Petrochemicals||16.129||16.231||0,6|
|Chennai Petroleum Corporation||10.789||10.695||-0,9|
|Bharat Oman Refineries||6.708||5.716||-14,8|
|Oil and Natural Gas Corporation||80||66||-17,5|
|A total of||251.934||257.205||2,1|
*) April 1st to March 31st
Source: Ministry of Petroleum and Natural Gas
In addition, IOCL is planning to build a new large-scale refinery with a capacity of 60 million tons per year in the state of Maharashtra, together with the also state-owned mineral oil companies Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) as well as Saudi Aramco and Abu Dhabi National Oil Company. The consortium estimates the cost of the project at around US $ 38 billion.
The largest private oil company Reliance Industries also wants to significantly increase its capacities. The refinery in Jamnagar, Gujarat state, is expected to process 2 million barrels of crude oil per year by 2030 - an increase of 44 percent compared to current output.
Further information on the economic situation, industries, business practice, law, customs, tenders and development projects in India can be found at http://www.gtai.de/india. The page http://www.gtai.de/asien-pazifik offers an overview of various topics in Asia-Pacific.
- Would you raise your husband's illegitimate child?
- Is the information displayed on Wikipedia true?
- What is the flight or fight response
- Professional mixed martial arts should be banned
- Most people have a resume
- Who is the best freelance project manager
- How can a nation reduce inequality
- What is the business development process
- How do you improve a stubborn employee?
- What are real applications for trigonometry
- How does owl meat taste?
- How is Trump better than Putin
- What are the benefits of investing
- Do people think actors are overpaid
- How do you get academically smart
- How does the Chinese water torture work
- How alcohol poisoning causes literal death
- Recognize God gay marriage
- Which is the best Gujarati website
- What are angel investors profits
- what are you waiting for
- How to lower HbA1C levels
- What is the staple food in Russia
- IMO determines your mathematical success
- What makes you read a book?
- Does catcalling ever work on a woman
- What saved you from a difficult situation
- How can freshmen apply for jobs
- Can kissing get a guy wet
- Why are my lips so tight
- Why are Indian engineers not so innovative
- Lives well in New Zealand
- Why did Islam build an empire?
- Hiring a foreign company in India