Oil and Gas industry

The oil and gas industry in India has been in the forefront of fuelling the rapid growth of India’s economy.

This industry that includes transport, refining as well as marketing of products made from petroleum and gas makes up about 15% of India’s GDP.

The single largest foreign exchange earner for India is from this industry and that is Petroleum. Petroleum alone accounted for about 24% of total exports in the year 2007-2008.

India increased its production of crude oil to 34.11MT in 2008 from 33.98MT in 2007. The production of petroleum products also increased.

There was also an increase in natural gas production from 31.74 billion cubic metres tones (BCM) in 2007 to 32.27 in 2008. This is probably not a bad thing considering that consumption of oil and gas in India has also risen.

India is being thought of more as a global refining hub. This is probably due to the fact that capital costs of refining oil in India are about 25 to 50% lower than it is in other Asian countries. As it stands at the moment, India is the 5th largest country in the world in terms of oil refinery.

There is a probability that they will be ranked even higher than the 3% share that it currently holds in the global arena if plans to boost its capacity by 45% over the coming five years is successful.

The petroleum retail market has had to be re-developed and expanded owing to the increase in sales of automobiles in the country. Sales of automobiles have been projected to grow to about 20million by the year 2030 which has prompted Oil giants in India – Hindustan Petroleum Corporation, Indian Oil Corporation and Bharat Petroleum Corporation – to put in place plans to open nearly 3,000 retails outlets in 2009 alone.

Demand for gas in India is mainly dominated by the country’s fertilizer and power sectors which come to about 66% of total gas consumption. Demand for gas is however expected to increase in the coming years which have seen both private and public investments made in this sector.

Companies in the public oil sector companies are expected to make an $11.33 investment in the sector. Owing to this increasing number of interest and investments, the Indian government has had to take measures to create a policy and regulatory framework that is conducive for all players involved.