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Oil Exploration and Production in India
Context:
A joint working group ( JWG) has been constituted to improve ease of doing business in the exploration and production (E&P) sector.
Oil Industry:
- India is the third-largest energy and oil consumer in the world.
- The country’s oil demand is expected to increase by 40% to 6.7 mb/day by 2030 and further to 8.3 mb/day in 2050.
- India aims to commercialise 50% of its SPR (strategic petroleum reserves) to raise funds and build additional storage tanks to offset high oil prices.
- Indian refiners would add 56 million tonnes per annum (mtpa) by 2028 to increase domestic capacity to 310 mtpa.
- India‘s refining capacity stands at 256.8 MMTPA as of Apr 2024, comprising 23 refineries.
- Refinery capacity utilisation is about 96% for the year 2021-22.
- Indian Oil Corporation (IOC) is the largest domestic refiner with a capacity of 70.1 MMTPA.
- India aims to increase its refining capacity to 450 MMTPA by 2030.
- In July 2021, the Department for Promotion of Industry and Internal Trade (DPIIT) approved 100% foreign direct investments (FDIs) under automatic route for oil and gas PSUs.
- India imported 43.1 MMT of crude oil for $26.1 Bn in Apr-May 2024 as compared to an import of 40.6 MMT for $21.5 Bn in Apr-May 2023.
- Import dependency in the case of crude oil in May 2024 was 88.2% as compared to 88.6% during the corresponding period of last year.
- Export of petroleum products was $7.5 Bn in Apr-May 2024.
- The Government has allowed 100% Foreign Direct Investment (FDI) in upstream and private sector refining projects.
Potential sites for oil exploration in India:
- India’s key oil extraction sites include the Mumbai High Oil Fields, which are the largest in the country, contributing 65% of India’s crude oil production.
- The Gujarat coast represents the second-largest oil extraction area.
- The Digboi Oil Fields hold historical significance as the oldest in the nation.
- The Brahmaputra Valley, particularly in the Dibrugarh and Sibsagar districts of upper Assam, is another notable oil extraction region.
- Additionally, the Cambay-Luni region is an important area for oil production in India.