Oil and gas sector is among the eight core industries in India and plays a major role in the economy. India’s economic growth is closely related to its energy demand given the vast need for fuel, therefore, the need for oil and gas is projected to grow more and more in the days to come.
The Indian Government has allowed 100% Foreign Direct Investment (FDI) in many segments of the sector, including natural gas, petroleum products and refineries among others.
According to Industry sources, the primary energy demand in India is expected to nearly double to 1,123 million tonnes of oil equivalent, as the country's gross domestic product (GDP) is expected to increase to USD 8.6 trillion by 2040. As of December, 2020, Gas Authority of India Ltd. (GAIL) had the largest share (69.39% or 11,884 kms) of the country’s natural gas pipeline network (17,126 kms).
As of April, 2021, the sector’s total installed provisional refinery capacity stood at 250.2 MMT. IOC – Indian Oil Corporation emerged as the largest domestic refiner, with a capacity of 70.1 MMT.
As of December , 2020, India’s oil refining capacity stood at 259.3 million metric tonnes (MMT), making it the second-largest refiner in Asia. Private companies own about 35.29% of the total refining capacity in FY20.
In FY20, crude oil production in India stood at 32.2 MMT. In March 2021, the crude oil production stood at 2.6 MMT, while for FY21 it was 30.5 MMT. In FY20, crude oil import increased to 4.54 mbpd from 4.53 mbpd in FY19. Natural Gas consumption is forecast to reach 143.08 million tonnes (MT) by 2040. India’s LNG import stood at 33.68 bcm during FY20.
India’s consumption of petroleum products grew 4.5% to 213.69 MMT during FY20 from 213.22 MMT in FY19.
The total value of petroleum products exported from the country increased to US$ 35.8 billion in FY20 from US$ 34.9 billion in FY19. Export of petroleum products from India increased from 60.54 MMT in FY16 to 65.7 MMT in FY20.Industry Investments
According to the data released by Department for Promotion of Industry and Internal Trade Policy (DPIIT), the petroleum and natural gas sector attracted FDI worth US$ 7.91 billion between April 2000 and December 2020.
The Government of India plans to invest about Rs. 7.5 trillion (US$ 102.49 billion) on oil and gas infrastructure in the next five
In Union Budget 2021, the government allocated funds worth Rs. 12,480 crore (US$ 1.71 billion) for direct benefit transfer of
LPG (liquefied petroleum gas) and Rs. 1,078 crore (US$ 147.31 million) to feedstock subsidy to BCPL/Assam Gas
The Government is planning to invest US$ 2.86 billion in oil and gas production to double natural gas production to 60 bcm and
drill more than 120 exploration wells by 2022.
- The Indian Oil and Gas industry is expected to attract US$ 25 billion investment in exploration and production by 2022.
- India is expected to be one of the largest contributors to non-OECD petroleum consumption growth globally.
- India’s share in global primary energy consumption is projected to increase by two-fold by 2035.
- Crude oil consumption is expected to grow at a CAGR of 3.60% to 500 million tonnes by 2040 .
- India’s oil demand is projected to rise at the fastest pace in the world to reach 10 million barrels per day by 2030, from 5.05 million barrel per day in 2020.
- Natural Gas consumption is forecast to increase at a CAGR of 4.18% to 143.08 million tonnes by 2040 from 58.10 million tonnes in 2018.
- Diesel demand in India is expected to double to 163 million tonnes (MT) by 2029-30.
- India is set to expand India’s natural gas grid to 34,500 kms by adding another 17,000 km gas pipeline.