The Oil and Gas Industry has been playing a vital role in the development of the Indian Economy as well as being a crucial sector among the eight core industries in India. Apart from the agricultural, Automobile, Chemical, and other major industry sectors, the oil & gas industry lobbying an impact on the Indian economy since its commencement.
Back in time, people considered petroleum, gas, oil, diamonds, gold, and other high-priced metals, as a source of income in trading them. Moreover, India stands as the 3rd Largest consumer of oil in the world and fourth place as the biggest refiner in the world.
The industry accomplishes every task that they have planned to do before the deadline, and ultimately became an on-demand energy industry globally. Whereas, India was the second top net crude oil products importer as of 2019. Regardless, the industry is also planning to enhance as much as an investment to result in the top oil & gas industry in the world.
The journey began in 1889, when India discovered the first oil deposits and gas fields in the town of Digboi, Assam. Later, India magnified the natural gas and oil industry in the 1960s and dilated the services to a pinnacle industry, and eventually bolstered the economy as a prominent industry in India.
The Oil and Gas Industry in India built reserves & Petrol stations etc. Besides, it cast the Indian economy in good terms of Imports, trading, refining, consumption, distribution, and foreign trade.
Classification of Oil & Gas Industry in India
The oil and gas industries are further breakdown into three distinct parts. These parts are named Upstream companies, Midstream companies, and Downstream companies. The basic details about all the three companies are given below.
The Oil and Gas Industry in India looks for dormant underground crude oil or natural gas by penetrating exploratory wells and extracting the resource to the surface. Notable Oil and Gas Industry in India Upstream attributes to the exploration and production sector.
On the other hand, those extracted resources are meant to process, stored, marketed, and traded as exports. Therefore, Midstream companies function as a connection between the production area and the ultimate consumer location (marketplace).
The third category of the Oil & Gas industry operates the part of oil refineries, petroleum products distributors, planters of petrol chemical stations, and retail outlets of natural gas.
Market size of Oil & Gas Industry in India
The Indian Oil & Gas industry became the third-largest consumer of oil in 2021 and planning to accomplish the position of the largest contributor to non-OECD petroleum consumption thrive.
As mentioned above, India attains as one of the topmost crude oil production abreast importers in the world. In recent times, a provisional refinery has been installed on the concurred of Government to burgeon as the Largest Domestic refiner at a worth of crude processing capacity of 1.24 million Barrels Per Stream Day (BPSD).
Last year the world faced a down economy because of the ongoing pandemic. According to the reports for the Financial year 2021, the industry faced a drawback in the exports of petroleum products which are estimated to fall from 65.7 to 56.8 MMT. However, with the change in the world stability, crude oil imports were recorded to rise sharply with the worth US $94.3 billion in FY 2022.
Nevertheless, still, the oil & gas industry in India showed a spiked percentage of 3.7% in the consumption of petroleum products which is comparable to the financial year 2019. In 2020, the Gas Authority of India Ltd. held the largest share of the country's natural gas pipeline network.
For the year 2021, the industry anticipates enticing US corporations to invest around 25 billion dollars in Upstream companies by 2022. Additionally, the Oil & Gas industry in India showed a reduction in crude oil production which stood at 30.5 MMT for FY21, analogous to the 32.2 MMT in FY20.
Recent plans of the Oil & Gas Industry in 2022
The major plans and schemes for the Oil and Gas Industry can be seen in the Union Budget. The government has allocated funds worth INR 12,480 crores for direct benefit transfer of LPG and INR 1078 crores for feedback subsidy to BPCL / AssamGas Cracker Complex in the year 2021.
Prime minister Narendra Modi in February 2021, declared that INR 7.5 trillion will be invested by the Indian Government in improving Oil and Gas Infrastructure in the upcoming five years.
An LNG (Liquified Natural Gas) policy draft was published by the petroleum and Natural gas ministry and it aims at increasing the LNG regasification capacity of India.
In February 2022, Mr. Hardeep Singh (the minister of petroleum and natural gas) was noted to announce that India will increase its oil and gas exploration area to 0.5 million sq. km by the year 2025. He was also noted to further clarify that the exploration area will be increased to 1 million sq. km by the year 2030. These changes will be applied to increase the domestic output from the oil and gas sector.
Key Players to Look Out for in the Oil & Gas Industry in India
There are not many players in the Oil and gas sector of India. Yet, amongst them all, the top players in the Oil and Gas Industry in India that have made their mark are:
Reliance Industries Limited (RIL):
Reliance Industries Limited trades in the research and analysis of Oil and Gas and production is also a key part of the business concern. Reliance Petroleum headquartered in Ahmedabad, Gujarat founded in 2008 falls under the petroleum and natural gas industry. It was merged with Reliance Industries Limited in 2009.
Oil and Natural Gas Corporation (ONGC):
Oil and Natural Gas Corporation is a government-owned corporation that handles in production and distribution of crude oil and natural gas in India. In India, ONGC is the largest company that produces and explores oil and gas reserves. The company is owned by the petroleum and natural gas ministry of India and was founded in 1956.
Indian Oil Corporation Limited (IOCL):
Indian Oil Corporation is a publicly owned conglomerate. It is a property that is in the possession of the petroleum and natural gas ministry, Government of India. It is headquartered in New Delhi and was founded in June 1959.
India with its increasing population has increasing needs and this is true in the case of Oil and Gas procurement and usage in India. India is the third-largest consumer of Oil in the world. Petroleum products have the highest share of 14 percent in Indian exports.
This points out that the Oil and Gas industry is one main source of revenue for the country and the increasing energy demands of the country can only signify the rapid growth of the Oil and Gas Industry in India in the future.
Where is India's largest oil field located?
The largest oil field in India is Bombay high. It is known to be situated 161 km north of the Bombay coast in Mumbai, Maharashtra.
What is the future of the oil and gas industry in India?
The industry of oil and gas in India will be seen a decline in the use of biofuels, batteries, and hydrogen rather than consuming more non-renewable resources to fulfill the demand of citizens.
Who produces gas in India?
The major of the gas is produced in the Gujarat state of India. About 11% of gas is produced by Gujarat and the remaining is made by a bunch of states such as Andhra Pradesh, Assam, Tripura, Tamil Nadu, and Rajasthan.
What is the GDP percentage for the oil and gas industry in India?
The oil and gas industry is counted among the 8 core industries contributing to the Indian GDP. The oil and gas industry stands for 15% of the country's Gross Domestic Product (GDP).