Oil and gas industry in India

The oil and gas industry in India dates back to 1889 when the first oil deposits in the country were discovered near the town of Digboi in the state of Assam. The natural gas industry in India began in the 1960s with the discovery of gas fields in Assam and Gujarat. As on 31 March 2015, India had estimated crude oil reserves of 763.48 million tonnes and natural gas reserves of 1488.49 billion cubic meters (BCM).

India imports 82% of its oil needs and aims to bring that down to 67% by 2022 by replacing it with local exploration, renewable energy and indigenous ethanol fuel (c. Jan 2018).[1] India was the fourth top net crude oil (including crude oil products) importer of 163 Mt in 2015.[2]

History

The first oil deposits in India were discovered in 1889 near the town of Digboi in the state of Assam.[3]

The natural gas industry in India began in the 1889 with the discovery of gas fields in Assam and Gujarat. Natural gas gained further significance after the discovery of large reserves in the South Basin fields by ONGC in the 1970s.[4]

Reserves

As on 31 March 2017, India had estimated crude oil reserves of 604.10 million tonnes (MT), declining by 2.76% from the previous year. The largest reserves are found in the Western Offshore (39.60%), and Assam (26.48%). The estimated reserves of natural gas in India as on 31 March 2017 was 1,227.40 billion cubic meters (BCM), increasing by 5.08% from the previous year. The largest reserves of natural gas are located in the Eastern Offshore (39.37%) and the Western Offshore (23.44%).[5]

Distribution of reserves by state/region

The following table shows the estimated crude petroleum and natural gas reserves in India by state/region as on 31 March 2017.[5]

Region Crude oil reserves
(in million metric tonnes)		 Share of oil (%) Natural gas reserves
(in BCM)		 Share of gas (%)
Arunachal Pradesh 1.52 0.25 0.93 0.07
Andhra Pradesh 8.15 1.35 48.31 3.75
Assam 159.96 26.48 158.57 12.29
Coal Bed Methane 0 0 106.58 8.26
Eastern Offshore[lower-alpha 1] 40.67 6.73 507.76 39.37
Gujarat 118.61 19.63 62.28 4.83
Nagaland 2.38 0.39 0.09 0.01
Rajasthan 24.55 4.06 34.86 2.70
Tamil Nadu 9.00 1.49 31.98 2.48
Tripura 0.07 0.01 36.10 2.80
Western Offshore[lower-alpha 2] 239.20 39.60 302.35 23.44
Total 604.10 100 1,289.81 100

Strategic Petroleum Reserve

The Indian Strategic Petroleum Reserve (ISPR) is an emergency fuel store of total 5 MMT (million metric tons) or 36.92 MMbbl of strategic crude oil enough to provide 10 days of consumption which are maintained by the Indian Strategic Petroleum Reserves Limited.[6][7][8]

Strategic crude oil storages are at 3 underground locations in Mangalore, Visakhapatnam and Padur near Udupi are located on the east and west coasts of India are readily accessible to the refineries. These strategic storages are in addition to the existing storages of crude oil and petroleum products with the oil companies and serve in response to external supply disruptions.[9]

Production

India produced 36.01 MTs of crude petroleum in 2016-17. India accounted for 0.92% of world oil production in 2016-18.Production of crude petroleum in India had a CAGR of 0.54% between 2007-08 and 2016-17. India also produced 243.55 MTs of petroleum products in 2016-17, recording a growth of 5.02% over the previous year. Among petroleum products, high speed diesel oil accounted for 42.08%, followed by Motor Gasoline (15.02%).[5]

India produced 31.90 billion cubic meters of natural gas in 2016-17, a decline of 1.09% from the previous fiscal. Production of natural gas in India had a CAGR of -0.16% between 2007-08 and 2016-17. India accounted for 0.77% of world natural gas production in 2016-17. [5]

Petroleum refining

As on 31 March 2017, there were 23 crude oil refineries in India, of which 18 were state-owned, 3 were privately owned and 2 were joint ventures. The total oil refining capacity in India stood at 234 MMT, rising from 230 MT the previous year. Refineries in India processed 245.362 MMT of oil in 2016-17 achieving a capacity utilization of 106.6%. With a total refining capacity of 69.2 MMTY, the state-owned Indian Oil Corporation was the largest refiner in the country by capacity. Indian Oil's refineries processed 65.191 MMT of crude oil in 2016-17.[5]

Many refineries are using the lower end residual oil with higher sulphur content to produce more lighter oils (petrol, diesel, etc) by installing petroleum coker units.[10] This process generates a solid fuel called Pet coke which has higher calorific value and sulphur. As developed countries have banned use of high sulphur pet coke and residual oils, these fuels further are converted in to synthetic natural gas and methanol in Methanation plants to avoid their disposal problem.[11] Nearly 38% of residual fuel oils are consumed in the shipping sector. The International Convention for Prevention of Pollution from Ships (MARPOL), adopted by the IMO, has mandated that marine vessels shall not consume residual fuel oils (bunker fuel, etc) with a sulphur content greater than 0.1% from the year 2020.[12] Thus complete use of residual oil or pet coke in gasification unit would be part of petroleum refining complexes/plants in future to avoid waste products disposal.[13]

Taxation and pricing

In India, the pricing of fuel varies by state, though central taxes still are part of the pump price of fuel. The Central and state government's taxes make up nearly half of petrol's pump price. The Central govt has different taxes, which amount to about 24–26% of the final cost. The states taxes vary, but on average end up making about 20–25% of the final cost. As a result, approximately 50% of the pump cost goes to the government in the form of different taxes.

For example, in Bengaluru, Karnataka as of May 16, 2011, price of petrol is ₹71.09 (99¢ US) per litre. Out of this, ₹17.06 (24¢ US) go to Govt of India in the form of excise and customs tax. ₹16.63 (23¢ US) is collected by state government in the form of sales tax and entry tax. Thus, a total of ₹33.69 (47¢ US) is collected due to various taxes (which accounts for around 47% of the total price).[14]

For Delhi petrol per liter price on April 2, 2018, the price charged to dealers was ₹31.08 (43¢ US), while central govt excise tax and cess was ₹19.48 (27¢ US), state govt VAT was ₹15.70 (22¢ US) and dealer commission was ₹3.60 (5.0¢ US). So the price of petrol for the end user was ₹73.83 (US$1.00).[15]

Consumption

India is the third largest consumer of crude oil in the world, after the United States and China. The country accounted 4.81% of total world oil consumption in 2016-17. The estimated total consumption of crude oil in India rose from 156.10 MMT in 2007-08 to 245.36 MMT in 2016-17 with a CAGR of 4.63%. High speed diesel oil accounted for 39.06% of total consumption of all types of petroleum products in 2016-17, followed by Petroleum Coke (12.31%), Petrol (12.21%), LPG (11.11%), and Naphtha (6.80%). The country accounted 1.41% of total world natural gas consumption in 2016-17. The two largest consumers of natural gas are the fertilizer industry (30.38%) and power generation (24.28%). Use of natural gas as a domestic fuel accounted for 14.47% of total consumption. Natural gas is consumed for both energy (58.16%) and non-energy (41.84%) related uses.[5]

India is highly dependent on import of crude oil. Net imports of crude oil rose from 121.67 MTs during 2007-08 to 213.93 MTs during 2016-17. Although more than 70% of its crude oil requirements and part of the petroleum product requirement is met from imports, India has developed sufficient processing capacity over the years to produce different petroleum products. As result, India is now a net exporter of petroleum products. The export of petroleum products increased from 40.75 MT in 2007-08 to 65.51 MT during 2016-17. The import of petroleum products increased from 22.46 MT in 2007-08 to 36.29 MT during 2016-17.[5]

The gross import of natural gas increased from 8.32 BCM in 2007-08 to 18.63 BCM in 2016-17, recording a CAGR of 8.40%.[5]

Electricity generation

Gas is an important source for electricity generation in India. As on 23 October 2015, the installed capacity of gas-based power plants in India was 25,057.13 MW, accounting for 7.9% of the total installed capacity. Diesel is a minor source for electricity generation in India. The total installed capacity of diesel-based power plants in India is 927.89 MW accounting for a mere 0.3% of total installed capacity.[16]

India's electricity sector consumed 24.28% of the natural gas produced in the country in 2016-17.[5]

Petrol stations in India

Indian Oil petrol station in Derabassi, India
Essar Oil petrol station in Khammam, Telangana

India has 60,799 petrol stations as of November 2017. 26,849 of these belong to Indian Oil (IOCL),14,675 to Bharat Petroleum (BPCL) and 14,161 to Hindustan Petroleum.[17] IOCL has more petrol stations than both Canada and the UK. The Punjab state of India has approximately 3,300 petrol stations, and the state of Haryana alone has more than 2,500 petrol stations. Many additional auto LPG and CNG stations have been planned due to high crude prices.[18]

Reliance Industries Ltd, Essar Oil, Shell India and ONGC have also opened petrol stations in India. Shell currently has 88 petrol stations in India.[19]

As of October 2009 Essar has 1600 petrol stations in India which are supplied with petrol and diesel from its 280,000 barrels per day (45,000 m3/d) refinery in Vadinar, Gujarat.[20]

Indraprastha Gas Limited has started exclusive CNG fuel stations in India, particularly in the capital city Delhi. In recent years, state oil marketing companies have started rural petrol stations which are established in the interior villages, meant to help farmers and constructed with minimal investment. These stations sell pesticides, seeds, lanterns, and other goods that are needed by farmers besides petrol and diesel.

Shell petrol station in Bangalore.

The details of the petrol stations owned by various companies in different states of India as of 31 March 2016 are:[21]

Oil Company/State/UT IOCL HPCL BPCL Others RIL/Essar Oil/Shell/ONGC
Andhra Pradesh 1199 929 720 210
Arunachal Pradesh 48 0 7 16
Assam 503 91 129 65
Bihar 1351 475 610 75
Chhattisgarh 481 329 275 23
Delhi 189 97 107 0
Goa 31 36 47 0
Gujarat 1274 738 771 601
Haryana 1334 666 385 151
Himachal Pradesh 218 109 62 7
Jammu & Kashmir 221 130 134 0
Jharkhand 496 265 319 71
Karnataka 1803 888 966 179
Kerala 885 587 457 80
Madhya Pradesh 1295 814 917 243
Maharashtra 1846 1542 1678 353
Manipur 69 0 12 4
Meghalaya 116 23 39 12
Mizoram 30 3 2 1
Nagaland 45 3 9 12
Odisha 748 314 414 84
Punjab 1685 878 610 143
Rajasthan 1630 977 819 310
Sikkim 16 7 23 1
Tamil Nadu 1991 1158 1317 236
Telangana 911 644 565 108
Tripura 62 0 2 3
Uttar Pradesh 3394 1374 1313 535
Uttarakhand 242 166 114 29
West Bengal 1119 488 563 74
Andaman & Nicobar 10 0 0 0
Chandigarh 20 11 10 0
Dadra & Nagar Haveli 11 11 4 5
Daman & Diu 11 10 7 3
Lakshadweep 0 0 0 0
Puducherry 79 39 32 6
Grand Total 25363 13802 13439 3586

See also

Notes

  1. ↑ Includes joint ventures/private parties for Crude Oil and includes West Bengal for Natural Gas
  2. ↑ Includes Bombay High offshore, Rajasthan and joint venture companies for Crude Oil, and Bombay High offshore, Rajasthan and Madhya Pradesh for Natural Gas

References

  1. ↑ India launches first auction of exploration blocks under new licensing policy, Economic Times, 18 Jan 2018.
  2. ↑ "BP Statistical Review of world energy 2016" (PDF). Retrieved 17 June 2016.
  3. ↑ "Digboi: The First Oil Well in India". EduGreen. The Energy and Resources Initiative. Retrieved 23 July 2012.
  4. ↑ "NATURAL GAS SCENARIO IN INDIA" (PDF). http://petroleum.nic.in. Retrieved 18 November 2016. External link in |website= (help)
  5. 1 2 3 4 5 6 7 8 9 "Energy Statistics 2018" (PDF). http://mospi.nic.in. Retrieved 28 April 2018. External link in |website= (help)
  6. ↑ "Filling of strategic oil reserves delayed". Retrieved 2015-12-23.
  7. ↑ Alexander's Gas & Oil Connections - India to build up storage of crude oil Archived 2009-04-18 at the Wayback Machine.
  8. ↑ "Store Our Oil And Take Two-Thirds For Free: UAE's Offer to India". NDTV. Retrieved 2016-02-10.
  9. ↑ "Indian Strategic Petroleum Reserves Limited". Retrieved 2016-01-29.
  10. ↑ "High Sulphur Content in Petroleum Coke". Retrieved 15 January 2017.
  11. ↑ "Reliance Jamnagar pet coke gasification project" (PDF). Retrieved 15 January 2017.
  12. ↑ "Implications of Residual Fuel Oil Phase Out" (PDF). Retrieved 17 March 2017.
  13. ↑ "Ban on sale and use of furnace oil and pet coke in NCR" (PDF). Retrieved 17 March 2017.
  14. ↑ Yousaf, Shamsheer (May 16, 2011). "Half of what you pay for petrol is taxes". Deccan Herald. Archived from the original on 4 March 2016. Retrieved May 25, 2012.
  15. ↑ https://www.moneycontrol.com/news/business/economy/oil-prices-decoded-who-gets-what-when-you-fill-up-your-vehicle-with-a-litre-of-fuel-petrol-diesel-2540707.html
  16. ↑ "All India Installed Capacity of Utility Power Stations" (PDF). Retrieved 19 October 2016.
  17. ↑ https://timesofindia.indiatimes.com/business/india-business/more-than-60000-petrol-pumps-in-india-45-jump-in-6-years/articleshow/61848964.cms
  18. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 2014-12-05. Retrieved 2017-06-27.
  19. ↑ https://economictimes.indiatimes.com/industry/energy/oil-gas/india-needs-to-be-in-top-5-in-our-oil-products-business-ben-van-beurden-ceo-royal-dutch-shell/articleshow/63164309.cms
  20. ↑ PTI (2009-10-01). "Business News : Essar cuts petrol, diesel prices". The Hindu. Retrieved 2012-03-12.
  21. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 2014-12-05. Retrieved 2017-06-27.
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