economic & strategic outlook – india oil and gas - ready for huge investment
The overall POL (Petroleum Products) imports during 2006/2007 stood at US$57.3bn, a growth of 30.4% over US$44bn a year ago.
Global Investment House – Kuwait – Economic & Strategic Outlook - India – Oil & Gas - India has been dependent on oil imports to meet its domestic energy requirements and is importing about 70% of its oil requirements. With the growth of economy without corresponding increase in domestic oil production, the imports would increase in the times to come. The spiraling prices of crude oil in the recent past have forced India to adopt a cautious approach for judicious utilization of the already strained resources.
Production of crude oil and natural gas….
During 2006-07, crude oil production in the country stood at 33.98 Mn Metric Tonnes (MMT) and natural gas production at 31.55 Bn Cubic Metres (BCM) as against the production of 32.19 MMT of crude oil and 32.20 BCM of natural gas in 2005-06. The main reason of shortfall in oil production in FY06 was the fire accident at Mumbai High Process platform in July, 2005.
Production of crude oil remained stagnant in FY07 compared to production in last year. It has marginally increased to 33.98mn tonnes in FY07 as compared to 32.19MnT in FY06. Crude oil production from onshore stood at 11.32mn tonnes in FY07 as compared to 11.43mn tonnes while from offshore, its production rose by 9.1% at 22.66mn tonnes in FY07 as compared to 20.76mn tonnes in FY06. Natural gas production saw a dip in production in the FY07. Natural gas production stood at 31,555mn Cubic Meters, a decline of 2% in FY07 as compared to 32,202mn Cubic Meters. Natural gas production from onshore and offshore stood at 9,271mn Cubic Meters and 22,284mn Cubic Meters respectively.
Oil bill is increasing every year…
During April-December, 2005 of the year 2005-06, 72.227 MMT of crude oil valued at Rs.1,219.7bn and 8.008 MMT of petroleum products valued at Rs.175.9bn have been imported and 14.837 MMT of petroleum products valued at Rs.324.03bn have been exported. There was a marginal increase of 0.6% in quantity and steep rise of 42.3% in value of import of crude oil during April to December 2005 over the same period of the preceding year. The product imports during April to December, 2005 of year 2005-06 were to the tune of 8.008 MMT valued at Rs.175.9bn as against 5.61 MMT valued at Rs.91.6bn during the corresponding period of year 2004-05. The change in imports of products during April to December 2005 of year 2005-06 compared to the import during the corresponding period of preceding year was thus 42.7% higher in terms of quantity and 91.9% higher, in terms of value.
As far as export of petroleum products is concerned, this exceeded by 13.9% in terms of quantity and 56.5% in terms of value during April to December, 2005 of year 2005-06 in comparison to the corresponding period during preceding year. The export of petroleum products went up to 14.837 MMT valued at Rs.324.03bn during April to December, 2005 as compared to 13.025 MMT, valued at Rs.207.05bn during the same period of the year 2004-05.
As per recent data, the average crude oil price stood at (Indian basket) at US$60.4 per barrel showed a marginal increase (1.3%) during March 2007 as against an increase of 22.1% a year ago. The overall POL (Petroleum Products) imports during 2006- 07 (April-March) stood at US$57.3bn, a growth of 30.4% over US$44bn a year ago. The average price of Indian basket of crude oil stood at US$62.4 per barrel during 2006-07 (April-March), a relatively low growth of 12.7% as compared to 42.2% registered a year ago. In volume terms, oil imports increased by 18.6% during 2006-07 (April- January) as compared to 3.2% growth a year ago. Exports of petroleum products (POL) recorded 62.2% growth at US$15.3bn during 2006- 07 (April-January), on top of 66.8% a year ago facilitated by increase in both price and volume. In volume terms, POL exports registered sharp increase at 46.9% during April-January 2006-07 as compared to 15.2% a year ago.
New Exploration Policy…
New Exploration Licensing Policy (NELP) provides an international class fiscal and contractual framework for Exploration and Production of Hydrocarbons. In the first five rounds of NELP spanning 2000-2005, contracts for 110 exploration blocks have been signed. The exploration investment in the three phases for 110 blocks is about Rs.217.3bn, which is expected to substantially increase with discoveries of hydrocarbons. Within five years, investment made on exploration has exceeded Rs.130bn in NELP blocks.
