India’s dependence on imports increases: Crude oil, natural gas output falls


NEW DELHI: Domestic production of crude oil and natural gas has fallen by 6% and 1.5%, respectively, in the first half of the current fiscal year, further increasing dependence on imports to meet rising demand.

India’s oil demand growth too has slowed to 1.4% in the April-July period, compared to 3.5% in the same period last year, but a sharper decline in production has increased reliance on imports. Foreign oil made up 84.5% of the country’s needs in six months to September, up from 83.3% a year earlier. Imported gas accounted for 51.2% of local needs, higher than 48.7% in the first half of last fiscal year.

The government has been aiming to cut oil import dependence to 67% by 2022 but local output has been falling year after year mainly due to ageing fields and lack of major discovery. The government has introduced several policy initiatives in recent years aimed at attracting more capital and technology to the upstream sector, which in turn is expected to help raise local output. Companies too have been investing billions of dollars but country’s overall output has continued to slip.


Crude oil production during April-September was 16.37 million tonnes, 5.96% lower than a year earlier.

ONGC, the country’s largest producer of oil and gas, produced 10.25 million tonnes, 3.97% less than a year earlier. Increase in water cut in some fields, pipeline issues and other technical problems contributed to production decline at ONGC, as per the oil ministry’s monthly report on oil production.

Oil India’s output contracted 4.24% from a year earlier to 1.61 million tonnes.

Production from fields operated by private players contracted at a much faster clip, with output falling 10.74% to 4.5 million tonnes. Vedanta’s Mangla, Bhagyam and Aishwarya fields in Rajasthan underperformed due to several operational issues.

Natural gas output was 16 billion cubic meters, 1.5% less than in the first half of last year.

ONGC’s gas output fell 0.45% to 12.07 billion cubic meters due to general decline in output from ageing fields, a fire incident at Uran plant in September, and less offtake by some clients. Gas production from fields operated by private players contracted 11.22% to 2.54 billion cubic meter.

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