OIL & GAS
An Overview
A petrol station in downtown Kolkata. There are well over 30,000 fuel retail outlets all over India, the majority of which are run by public sector oil companies. Indian Oil, BPCL and HPCL have approx. 17,600, 7,500 and 8,000 outlets respectively. Numaligarh Refinery operates ca 80 retail outlets. The private sector and multinationals (such as Esso and Caltex) were banned to operate in the fuel retail sector from 1976 till 2002. Newcomers since 2002 include Reliance (ca 1,400 outlets), Essar (ca 350 outlets) and Shell (less than 50 outlets).
India's proven, probable and possible oil reserves amount to approx. 11 billion barrels which is far from adequate for India's growing oil demand. India imports around 75 % of its total oil consumption and recent soaring oil prices have resulted in increased retail prices, which are still regulated by the central government. Public sector companies dominate the oil and gas sector. A few private sector companies such as RIL, RPL and Essar are investing heavily in the oil and gas sector. RIL's existing 34 MMTPA Jamnagar (Gujarat) oil refinery is the fifth largest in the world while RPL's new refinery, the sixth largest refinery in the world and located also in Jamnagar, is expected to go on stream by the end of 2008. India produced 34 million tonnes of crude oil during 2006-07 making India the 22nd largest producer in the world. Two-thirds of the oil produced in India's is drilled from offshore fields. Onshore oil is mainly produced in Assam and Gujarat.
India's oil refining capacity amounted to over 151 MMTPA (Million Metric Tonne Per Annum) in July 2007 thus placing India in fifth position in the world after the United States, China, Russia and Japan. India's oil consumption is estimated to rise to 5 m bpd in the next 5-7 years from the current 2.6 m bpd. Russia will probably play a major role in supplying crude oil and gas to India. ONGC Videsh is a stakeholder in the multinational Sakhalin-I Project which now has begun the supply of oil to India. Indian state-owned oil companies have invested in oil and gas fields in a dozen foreign countries including Russia, Sudan, Iran, Iraq, Libya, Egypt, Qatar, Ivory Coast, Australia, Vietnam and Myanmar (Burma).
55 blocks (24 deep water, 6 shallow water and 25 onshore) for the exploration of oil and gas were on offer in the sixth auction under the New Exploration Licensing Policy (NELP) and are expected to bring investments to the tune of USD 8-10 billion. A total of 57 blocks are on offer on the 7th round of NELP.
Cairn Energy PLC, involved in oil exploration and production in Rajasthan (Mangala field being the largest oil discovery in India over the past two decades), is floating its Indian subsidiary Cairn India and is offtaking a 30.35 per cent share by way of a public issue.
A view of the HPCL refinery at Visakhapatnam.
Natural Gas
New gas field discoveries along the eastern coast of India could mark a significant increase in gas production and distribution. Cross-country gas pipelines are being planned and Reliance eg has applied for gas distribution licenses in 100 cities for the supply of gas to consumers. An estimated 650 bn cubic meters of gas reserves of ONGC and Reliance Industries lie untapped in the Krishna-Godavari basin. ONGC is already producing gas while RIL expects to begin gas production by mid-2008.
Oil Refineries
India has 17 public sector refineries and two refineries in the private sector, the largest refineries being RIL Jamnagar (Gujarat), MRPL Mangalore (Karnataka), CPCL Manali (Chennai, Tamil Nadu) and IOC Koyali (Gujarat). Three new refineries have been proposed for implementation at Paradip (Orissa), Bina (Madhya Pradesh) and Bhatinda (Punjab). Essar Oil operates a 10.5 MMTPA refinery at Vadinar, Gujarat. Reliance Petroleum is building a 29 MMTPA refinery at Jamnagar. The new refinery, along with the present refinery at Jamnagar, will have a total capacity of 1.24 million bpd, making it the world's largest oil refining facility by 2009. Indian Oil's Digboi (Assam) refinery, Asia's first, along with its oil field is the oldest refinery and continously operating oilfield in the world after being in operation since 1901.
| Location | State | Capacity (MMTPA) | Company | Major Stakeholders | Misc | Status |
|---|---|---|---|---|---|---|
| Bhatinda | Punjab | 9 | HPCL/Mittal Energy Investments | - | Expected completion 01/2011 | |
| Visakhapatnam | Andhra Pradesh | 15 | HPCL | Total | Expansion of current Vizag refinery | |
| Bina | Madhya Pradesh | 6 | Bharat Oman Refineries Ltd | BPCL and Oman Oil Company Ltd | A 935 km crude oil pipeline from Vadinar, Gujarat to Bina, MP | 54 % completed as at Apr'08. Completion2009-10 |
| Barmer | Rajasthan | 7.5 | Rajasthan Refineries Limited | ONGC and Cairns Energy | The Rs 90 bn project would be Rajasthan's largest single investment. This project has been put on hold. | |
| Kakinada | Andhra Pradesh | 14 | Mangalore Refinery (ONGC subsidiary) | Mangalore Refinery, IL&FS, Andhra Pradesh Govt. | Export oriented refinery-cum-petrochem complex, planning stage. | |
| Paradip | Orissa | 5 | Indian Oil | Indian Oil | A 15 MMTPA refinery-cum-petrochem complex slated to be completed by end 2011. | |
| Jamnagar | Gujarat | 29 | Reliance Petroleum Ltd. | RPL | A 29 MMTPA export-oriented refinery to be commissioned by end-2008. | |
| Vadinar | Gujarat | ca 24 | Essar | Capacity expansion of current refinery to 34 MMTPA by Dec 2010. |
Oil & Gas Related Links
- Indian Oil Corp. Ltd.
- Bharat Petroleum Corp. Ltd.
- Hindustan Petroleum Corp. Ltd.
- Reliance Petroleum Ltd.
- Essar Oil
- ONGC Videsh
- Oil and Natural Gas Corp. Ltd.
- Oil India Ltd.
- Shell India
- Numaligarh Refinery Ltd.
- GAIL (India) Ltd.
- Petronet LNG Ltd.
- Ministry of Petroleum & Natural Gas
- Directorate General of Hydrocarbons
- Renewingindia.org
- GSPC Group