Indian Oil and Natural Gas

 
India oil

India has significant amounts of oil and natural gas, and four of India's top six revenue-generating
companies are in the oil and natural gas business. India has indigenous sources for around 60
percent of its oil needs and has worked diligently to use substitute forms of energy to fulfill the other
40 percent. Indian Oil in commercial quantities was first discovered in Assam in 1889. The Oil and
Natural Gas Commission was established in 1954 as a department of the Geological Survey of India,
but a 1959 act of Parliament made it, in effect, the country's national oil company. Oil India Limited, at
one time one-third government owned, was also established in 1959 and developed an oil field that
had been discovered by the Burmah Oil Company. By 1981 the government had purchased all of the
Burmah Oil Company's assets in India and completely owned Oil India Limited. The Oil and Natural
Gas Commission discovered oil in Gujarat in 1959 and opened other fields in the 1960s and 1970s.

Oil in India :

The early oil fields discovered in India were of modest size. Oil production in India amounted to
200,000 tons in 1950 and 400,000 tons in 1960. By the early 1970s, production had increased to
more than 8 million tons. In 1974 the Oil and Natural Gas Commission discovered a large field--called
the Bombay High--offshore from Bombay. Production of Indian oil from that field was responsible for
the rapid growth of the country's total crude oil production in the late 1970s and throughout the 1980s.
In FY 1989, oil production peaked at 34 million tons, of which Bombay High accounted for 22 million
tons. In the early 1990s, wells were shut in offshore fields that had been inefficiently exploited, and
production fell to 27 million tons in FY 1993. That amount did not meet India's needs, and 30.7 million
tons of crude oil were imported in FY 1993.

India has thirty-five major fields onshore (primarily in Assam and Gujarat) and four major offshore oil
fields (near Bombay, south of Pondicherry, and in the Palk Strait). Of the 4,828 wells, in 1990 2,514
were producing at a rate of 664,582 barrels per day. The oil field with the greatest output is Bombay
High, with 402,797 barrels per day production in 1990, about fifteen times the amount produced by
the next largest fields. Total reserves are estimated at 6.1 billion barrels.

The government has sanctioned ambitious exploration plans to raise production in line with demand
and to exploit new discoveries as rapidly as possible. In the late 1980s and early 1990s, there were
encouraging finds in Tamil Nadu, Gujarat, Andhra Pradesh, and Assam; many of these discoveries
were made offshore. Officials estimated that by the mid-1990s these new fields could contribute as
much as 15 million to 20 million tons in new production and that total crude oil production could
increase to 51 million tons in FY 1994. In the early 1990s, the government renewed attempts, which
had begun in the early 1980s, to interest foreign oil companies in purchasing exploration and
production leases. These efforts drew only a modest response because the terms offered were
difficult, and foreign companies remained suspicious of India's investment climate. One response,
agreed on in January 1995, was an Indian-Kuwaiti joint venture to invest in a new oil refinery to be
built on the east coast of India.

Substantial quantities of natural gas in India are produced in association with crude oil production.
Until the 1980s, most of this gas was flared off because there were no pipelines or processing
facilities to bring it to customers. In the early 1980s, large investments were made to bring gases from
Bombay High and other offshore fields ashore for use as fuel and to supply feedstock to fertilizer and
petrochemical plants, which also had to be constructed or converted to use gas. By the mid-1980s,
natural gas could be delivered to facilities near Bombay and near Kandla in Gujarat. In the mid-1990s,
a 1,700-kilometer trans-India pipeline was being built; the pipeline will link the facilities near Bombay
and Kandla to a series of gas-based fertilizer plants and power stations. Officials envisage a grid
system covering 11,500 kilometers by FY 2004, which will supply 120 million cubic meters of gas a
day. Total production in FY 1992 was 18.1 billion cubic meters.

India's need for oil and petroleum-based products--about 40 million tons per year--far exceeded its
domestic production capabilities of 28 million tons per year in the early 1990s. Given India's
dependency on Persian Gulf resources, proposals were made in the early 1990s to develop natural
gas pipelines from Iran, Qatar, and Oman that would run under the Arabian Sea to one or more west
coast terminals. To assist with oil and natural gas production, in 1992 the government decided to
open reserves to private offshore developers. In February 1994, contracts were awarded for three
offshore fields in the Arabian Sea to an Indian-United States consortium and one in the Bay of Bengal
to an Indian-Australian-Japanese consortium. In June 1995, an agreement was reached to set a joint-
venture company to construct the first leg of the pipeline, from Iran to Pakistan. - India oil natural gas
1995 loc data.