PETROLEUM AND ENERGY SUPPLY NATURAL GAS 4 AT A GLANCE The production of crude oil declined marginally during the year, from 37.9 million tonnes (MT) in 2012/13 to 37.8 MT in 2013/14. On the other hand, imports of crude oil increased Introduction in terms of both quantity and value. The total refining capacity remained unchanged at 215 MT, The domestic production of both oil and gas declined while refinery throughput increased by nearly 3 MT during in 2013/14. Although the total domestic crude oil the year. production fell marginally, production increased only in the fields operated by Cairn India in Rajasthan. Both diesel and petrol prices have now been decontrolled. The overall natural gas production, in particular, fell Hence, no more under-recoveries are being incurred for for the third year in a row due to the falling production both these fuels. from the RIL-BP-Niko’s KG-DWN-98/3 (popularly The domestic production of natural gas decreased during known as the KG-D6) block. Consequentially, crude the year to just over 35.4 billion cubic metres (BCM) from oil imports rose; however, natural gas imports in 40.7 BCM in 2012/13. the form of liquefied natural gas (LNG) marginally The PAHAL-Direct Benefit Transfer for LPG (DBTL) decreased. Further, domestic refining capacity Consumers Scheme was launched in 54 districts across remained unchanged, although refining throughput India in November 2014. This will be launched in the rest of increased marginally by 3 million tonnes (MT). the country from 1 January 2015. After petrol prices were deregulated in 2010, diesel prices stand deregulated as of October 2014. As a consequence, oil marketing companies (OMCs) are not incurring under-recoveries on the sale of diesel anymore. Additionally, a new natural gas pricing structure has now been put in place. The new pricing formula is a modification of the Rangarajan Committee formula, the implementation of which was stalled due to the Lok Sabha Elections in 2014. Oil Crude oil supply Domestic production Oil production in India in 2013/14 marginally fell to 37.8 MT from 37.9 MT in 2012/13 (Table 1). Production from the offshore fields of Oil and Natural Gas Corporation (ONGC) continued its declining Energy supply trend. Although the decline from the previous year Table 1 Trend in onshore–offshore crude oil production (in MT) is marginal, ONGC’s offshore production has Year Onshore Offshore Grand dropped 11.6% since 2009/10. Production has fallen total ONGC OIL Priva- Total ONGC Priva- Total in the onshore and offshore fields of ONGC and Oil te/JV te/JV India Ltd (OIL), as well as in private offshore fields. 2013/14 (P) 6.7 3.5 9.4 19.6 15.5 2.6 18.2 37.8 ONGC, however, intends to ramp up production by 2012/13 6.9 3.7 8.8 19.4 15.6 2.8 18.4 37.9 23% starting 2014/15 until 2019/20. It plans to use Improved Oil Recovery (IOR) and Enhanced Oil 2011/12 7.4 3.9 6.8 18.0 16.3 3.7 20.1 38.1 Recovery (EOR) techniques in the Mumbai High and 2010/11 7.5 3.6 5.4 16.4 17.0 4.3 21.3 37.7 Heera fields (The Hindu 2014). 2009/10 7.5 3.6 0.7 11.8 17.3 4.5 21.9 33.7 Private onshore production, on the other hand, 2008/09 7.6 3.5 0.2 11.3 17.8 4.4 22.2 33.5 has improved significantly from 0.7 MT in 2009/10 to 9.4 MT in 2013/14, increasing for the fifth year in 2007/08 7.9 3.1 0.2 11.2 18.0 4.9 22.9 34.1 a row. This has made up for the declining production 2006/07 8.1 3.1 0.2 11.3 18.0 4.7 22.7 34.0 elsewhere. Table 2 provides the production of crude 2005/06 8.1 3.2 0.1 11.4 16.3 4.5 20.8 32.2 oil by region. 2004/05 8.3 3.2 0.1 11.6 18.2 4.2 22.4 34.0 Import of crude oil 2003/04 8.4 3.0 0.1 11.5 17.7 4.2 21.9 33.4 India imported 189.2 MT of crude oil in 2013/14, 2002/03 8.5 3.0 0.1 11.5 17.6 4.0 21.6 33.0 which constituted over 83% of the total domestic 2001/02 8.6 3.2 0.1 11.9 16.1 4.1 20.1 32.0 supply in that year. The share of imports has risen 2000/01 8.4 3.3 0.1 12.0 16.6 3.8 20.4 32.4 from 74% in 2004/05. JV – joint venture; MT– million tonnes; OIL – Oil India Ltd; ONGC – Oil and Natural India’s dependence on the Middle East for its oil Gas Corporation; P – provisional declined in relative terms, even though total import Note The production figures have been rounded off to one decimal place. marginally increased to 115.9 MT in 2013/14 from Source MoPNG (2014b); TERI (2014a) Table 2 Production of crude oil by region (in MT) Year Onshore Offshore Total Arunachal Andhra Pradesh/ Assam/ Gujarat Onshore Private/JV Mumbai Offshore Pradesh Tamil Nadu Nagaland /Rajasthan total High total 2013/14 (P) 0.1 0.6 4.7 14.2 19.5 2.7 15.5 18.2 37.7 2012/13 0.1 0.5 4.9 13.9 19.4 2.8 15.6 18.4 37.8 2011/12 0.1 0.6 5.0 12.3 18.0 3.7 16.3 20.1 38.1 2010/11 0.1 0.5 4.7 11.1 16.4 4.3 17.0 21.3 37.7 2009/10 0.1 0.5 4.7 6.4 11.8 4.5 17.3 21.9 33.7 2008/09 0.1 0.6 4.7 5.9 11.3 4.4 17.8 22.2 33.5 2007/08 0.1 0.6 4.4 6.2 11.2 4.9 18.0 22.9 34.1 2006/07 0.1 0.6 4.4 6.2 11.3 4.7 18.0 22.7 34.0 2005/06 0.1 0.6 4.5 6.3 11.4 4.5 16.3 20.8 32.2 2004/05 0.1 0.6 4.7 6.2 11.6 4.2 18.2 22.4 34.0 2003/04 0.1 0.7 4.6 6.1 11.5 4.2 17.7 21.9 33.4 2002/03 0.1 0.7 4.7 6.0 11.5 4.0 17.6 21.6 33.0 2001/02 0.1 0.7 5.1 6.0 11.9 4.1 16.1 20.1 32.0 2000/01 0.1 0.7 5.2 5.8 11.8 4.0 16.6 20.4 32.4 JV – joint venture; MT – million tonnes; P – provisional Source MoPNG (2014b); TERI (2014) 70 TERI Energy and Environment Data Diary and Yearbook 2014/15 Petroleum and natural gas Table 3 Quantity of crude oil import by region (in MT) 2011/12 2012/13 2013/14 Middle East 118.6 115.4 115.9 Africa 31.1 29.6 30.4 Asia 3.4 3.3 3.4 South America 14.5 29.8 31.7 Eurasia 1 2.4 2.1 North America 2.3 4.1 5.2 Europe 0 0 0.3 Australia 0.7 0.2 0.4 Total 171.6 184.8 189.4 Source Rajya Sabha (2014) 115.4 MT from the previous year. Imports from South Figure 2 Imports of crude oil and petroleum America, in particular, have increased to 31.7 MT in products vis-à-vis total imports 2013/14 from only 14.5 MT in 2011/12 (Table 3). P – provisional The bill for crude oil imports in 2013/14 was Source RBI (2014) ` 864 875 crore, up 10.2% from ` 784 652 crore in 2012/13 (Figure 1). Because of the depreciation of the rupee and the changing oil prices, while the oil import increased by 3.5% compound annual growth Crude oil pipelines rate (CAGR) in terms of quantity, it increased by India has over 9000 km of crude oil pipelines. 18.2% CAGR in terms of value between 2009/10 and Table 4 lists the details of major pipelines, operators, 2013/14. Figure 2 provides the share of petroleum capacities, and lengths. and crude products in total imports of India. Refining Present capacity and throughput of existing refineries Although India is a net importer of crude oil, it is one of the largest exporters of petroleum products in the world. India became a net exporter of petroleum products in 2001 (EIA 2014), and since 2012, it has the third largest refining capacity in Asia after China and Japan, with a total capacity of 215.07 MTPA in 2013/14 (Table 5). While this refining capacity has not changed since 2012/13, it has increased significantly over time: it was 148.97 MTPA in 2006/07, while it was only 62 MTPA in 1997/98 (see Map 1). While no new refineries have been commissioned since 2012 when Hindustan Mittal Energy Ltd Figure 1 Quantity and value of crude oil imports in (Bathinda, Punjab) and Bharat Oman Refineries Ltd India (Bina, Madhya Pradesh) were commissioned, capacity P – provisional expansion programmes are on at several refineries.