Domestic natural gas production fell 11.3% to 2,333 million metric standard cubic metre (MMSCM) in June. The 2.5 million tonne (MT) of crude oil produced in the country in the month was also 5.7% lower than the production from a year-ago period.
Indigenous crude oil production caters to about only 15% of the country’s requirements, while for natural gas, 51% of requirement has to be imported.
Domestic natural gas output fell 5.1% year-on-year to 31,184 MMSCM in FY20, reversing the growth trend recorded since FY18. Also, the 32.2 MT of crude oil produced in the country in the fiscal was 5.8% lower than the output from a year-ago period.
The development coincides with domestic consumption of petroleum products falling 7.8% year-on-year to 16.3 MT in June. Consumption has of course improved from April, when only 9.9 MT of products were sold with the lockdown to contain the spread of the coronavirus being implemented throughout the month.
Domestic production has been falling with the ageing of existing fields and muted response from the industry to take up new projects, mainly due to lack of adequate incentives. Other reasons for lower output in FY20 include lack of buyers, inadequate evacuation infrastructure, technical constraints in hostile geographical terrains and protests against the Citizenship (Amendment) Bill in upper Assam oilfields. Lack of environmental permissions is also making new drilling difficult.
For the eleven oilfields offered under the fifth round of Open Acreage Licensing Programme (OALP) auctions, the Union government has received bids from only one private firm and two state-owned companies. State-run Oil and Natural Gas Corporation (ONGC) was the only bidder for eight blocks while Oil India was the sole bidder for two blocks. For the smallest oil field offered, the director general of hydrocarbons has received bids from Invenire Petrodyne and ONGC.