India’s oil production continues to decline

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    India’s production of crude oil, which is refined to produce petrol and diesel, continued to decline in December 2021.

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    • Oil production in December was 2.51 million tonnes, down from 2.55 million tonnes a year earlier and a target of 2.6 million tonnes. 
      • The output was, however, higher than 2.43 million tonnes produced in November 2021.
    • ONGC, India’s biggest producer, produced 3% less crude oil at 1.65 million tonnes in December due to delays in mobilising equipment at western offshore fields. 
    • Oil India Ltd. (OIL) produced 5.4% more crude oil at 2,54,360 tonnes.

    Indian Oil and Gas Industry

    • The oil and gas sector is among the eight core industries in India and plays a major role in influencing decision making for all the other important sections of the economy.
      • India is 85% reliant on imports to meet its crude oil needs as domestic output is insufficient to meet the demand. 
      • Natural gas production, however, rose by almost a fifth to 2.89 billion cubic metres (bcm) in December 2021.
      • India’s economic growth is closely related to its energy demand, therefore, the need for oil and gas is projected to grow more, thereby making the sector quite conducive for investment.
      • The Government has adopted several policies to fulfil the increasing demand. 
        • It has allowed 100% Foreign Direct Investment (FDI) in many segments of the sector, including natural gas, petroleum products and refineries among others. 
          • Today, it attracts both domestic and foreign investment as attested by the presence of Reliance Industries Ltd (RIL) and Cairn India.
    • Investments:
      • According to data released by the Department for Promotion of Industry and Internal Trade Policy (DPIIT), the petroleum and natural gas sector attracted FDI worth US$ 7.92 billion between April 2000 and March 2021.

    Source: TH