Oil and Gas | Make In India

Summary

India has been ranked third largest primary energy consumer in the world. *
The current share of India in global primary energy consumption is 6.1%. *
By 2023-24, India is going to be 20% blending ethanol in our petrol products. Government promoting use of ethanol produced from sugarcane and food grains under EBP Programme. *
India’s oil demand is expected to increase by 40% to 6.7 mb/day by 2030 and further to 8.3 mb/day in 2050 from 4.7 mb/day in 2021.

Reasons to Invest

The share of India in global primary energy consumption is likely to increase to about 9.8% under policies scenario by 2050.*
The Government is aiming of achieving 500 GW installed capacity from non-fossil fuel based capacity (Hydro, Nuclear, Solar PV, Wind, Biomass etc.) by 2030.*
India's share in the global oil demand is expected to increase to 11% while the gas demand is expected to rise upto 500% making it an attractive destination for investment and collaboration. *
In the next 4-5 years, India's gas pipeline network will reach around 35,000 kms providing opportunities for investment in natural gas infrastructure. *
The Government has advanced the target of achieving 20% blended ethanol by 2025, which is commonly known as E20 target.
10 lakh square kilometers of 'No-Go' areas in the Eastern Coast, Western Coast and Andaman Basin of India have been released for Oil & Gas Exploration and Production by Ministry of Petroleum and Natural Gas, Government of India to increase India's domestic oil & gas exploration and production capacity. *

Explore more about infrastructure availability in Oil and Gas sector >

Key Achievements

From just 66 districts in 2014, CGD network covers 630 districts in 2023, taking the number of domestic PNG connections from merely 25.40 lakhs in 2014 to a whopping 103.93 lakhs now. *
After completion of 11 A CGD bidding round, 295 Geographical Areas (GAs) covering about 98% of the population and 88% of total geographical area of the country spread over around 630 districts in 28 States/UTs including all cities under these GAs, have been covered under the CGD network.*
India increased the ethanol blending in petrol from 1.53% in 2013-14 to 10.17% in 2022 and advanced its target to achieve 20% ethanol blending in petrol from 2030 to 2025-26. *
The Oil Marketing Companies (OMCs) - Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Limited (HPCL) have entered into a long-term purchase agreement (LTPA) for upcoming dedicated ethanol plants across India. *
ONGC has become the first Exploration and Production (E&P) company in India to trade domestic gas on Indian Gas Exchange. *
ONGC Videsh Limited (OVL) has made an oil discovery in the recently drilled well, Urraca-IX, in CPO-5 block, Llanos Basin, Colombia. *

Recent Announcements

07th July 2023: Government has put in an eco-system for development of Green Hydrogen: Hardeep Singh Puri.

Ministry of Petroleum & Natural Gas

09th June 2023: HPCL Undertakes Successful Pilot Study on E27 Fuel and Ethanol Blended Diesel Fuel.

HPCL Undertakes Successful Pilot Study

08th June 2023: Landmark reforms in Upstream, Midstream, and Downstream sectors of Hydrocarbon Industry Undertaken: Hardeep Singh Puri

India undertaking Energy Transition

06th June 2023: Shri Hardeep Singh Puri Lays Foundation Stone of ONGC-funded Yatri Niwas in Jammu.

Oil and Natural Gas Corporation Limited

05th June 2023: MoP&NG launches OALP Bid Round-VIII, accelerates exploration and production (E&P) activities.

Ministry of Petroleum & Natural Gas

Statistics

35 CBG/biogas plants have been commissioned so far under SATAT initiative.*
Petroleum products, including diesel, gasoline, and naphtha, saw an export value of USD 94 bn in 2022, with the unit price increasing between 50-115% from 2021 due to high crude oil prices. *
Natural Gas production (weight: 6.88 per cent) increased by 3.6 per cent in June, 2023 over June, 2022. Its cumulative index increased by 0.1 per cent during the quarter April to June, 2023-24 over the corresponding period of previous year.*
Petroleum Refinery production (weight: 28.04 per cent) increased by 4.6 per cent in June, 2023 over June, 2022. Its cumulative index increased by 1.9 per cent during the quarter April to June, 2023-24 over the corresponding period of previous year.*

Growth Drivers

Cabinet approves additional investment of USD 1,600 mn (about INR 12,000 crore) by Bharat PetroResources Ltd. (BPRL), a wholly owned subsidiary of Bharat Petroleum Corporation Limited (BPCL) for development of BM-SEAL-11 Concession Project in Brazil.*
HPCL commences its first Cow dung to Compressed Biogas Project to utilize 100 Tons per day of dung to produce biogas, which can be utilized as automotive fuel.*
CGD entities authorized upto 11A round, have to provide 12.33 crore PNG connections and establish 17,700 CNG stations by 2030 including in rural and urban areas.*
GAIL (India) Limited has awarded a contract to set up one of the largest Proton Exchange Membrane (PEM) Electrolyser in India. The Project has been designed to produce around 4.3 Metric Tons of Hydrogen per day (approx. 10 MW capacity) with a purity of about 99.999 Volume %. It is scheduled to be commissioned by November 2023. *
33,500 km Natural Gas Pipeline network has been authorized across the country.*
India's 4-plank energy security strategy is based on diversifying supplies, increasing E&P, alternate energy sources and energy transition through a gas-based economy, Green Hydrogen etc.*
Sagar Samrat will be able to operate in deep waters and is expected to add 6000 bbls/day of oil to India’s production.*

FDI Policy

The government has allowed up to 100% Foreign Direct Investment (FDI) under the automatic route, in the following: *
- Exploration activities of oil and natural gas fields,
- Infrastructure related to marketing of petroleum products and natural gas,
- Marketing of natural gas and petroleum products, petroleum products' pipelines, natural gas pipelines,
- LNG regasification infrastructure, market study, formulation and petroleum refining in the private sector,
- The policy of the government or private participation in the exploration of oil and the discovered fields of natural oil companies
100% FDI under the automatic route for petroleum refiners and in those without any disinvestment or dilution of domestic equity in the existing PSUs at 49%. *
To promote the usage and distribution of Liquefied Natural Gas (LNG), the Government has put LNG imports under Open General Licensing (OGL) category and the establishment of LNG infrastructure, including LNG terminals, is also under 100% FDI (automatic route).*
The cumulative FDI equity inflow in the Petroleum and Natural Gas is USD 8.15 bn during the period April 2000 to March 2023. This constitutes almost 1.28 % of the total FDI inflow received across sectors. *

Sector Policy

Pradhan Mantri JI-VAN Yojana*

The Government had notified the Pradhan Mantri JI-VAN Yojana for providing financial support to integrated bio-ethanol projects.
The total financial outlay for the scheme is INR 1969.50 crore for the period 2018-19 to 2023-24.
Under the PM JI-VAN Yojana, the maximum financial assistance of INR 150 crore per project for commercial projects and INR 15 crore per project for demonstration projects has been prescribed for improving commercial viability as well as promoting R&D for development and adoption of technologies in the field of production of 2G ethanol.

Hydrocarbon Exploration & Licensing Policy (HELP) *

The new Hydrocarbon Exploration & Licensing Policy (HELP) has replaced the previous policy regime for exploration and production of oil and gas, known as New Exploration Licensing Policy (NELP). HELP provides a uniform licensing system to explore and produce all hydrocarbons such as oil, gas, coal bed methane, shale oil/gas, etc. under a single licensing framework.

Open Acreage Licensing Policy (OALP) *

The Open Acreage Licensing Policy (OALP) was notified in 2017 by the GoI as a part of the Hydrocarbon Exploration and Licensing Policy (HELP). Under OALP, potential investors/ companies can view the surface and sub-surface geological, geophysical and other technical data on the National Data Repository (NDR) and submit Expressions of Interest round the year.

National Data Repository (NDR) *

National Data Repository (NDR), a pre-requisite for making OALP operational is set up at the Directorate General of Hydrocarbons (DGH) to make the entire Exploration and Production (E&P) data available for commercial exploration, research and development and academic purposes.

Discovered Small Field Policy *

With an aim to monetize hydrocarbon resources locked-in for years, the GoI approved the Discovered Small Field Policy. As an opportunity to increase domestic production of oil and gas, a total of 30 contracts for 43 discovered small fields were signed with 20 companies in March, 2017 under the first round of bidding. Under the second round, 59 discovered small fields/ unmonetized discoveries clubbed into 25 new contracts were offered for bidding in 2018. These fields are estimated to have 194.65 MMT Oil and Oil equivalent gas.

National Policy on Biofuels 2018*

With a target of 20% blending of ethanol in petrol by 2030, the National Policy on Biofuels 2018 has been notified by the Government of India. The policy is expected to boost the Biofuel programme of the country and has also widened the scope of raw material for ethanol procurement. *
According to the National Policy on Biofuel 2018 envisages a target of 20% blending of ethanol in Petrol by 2030.

Following benefits are expected out of the new policy: *

Reduce Import Dependency
Cleaner Environment
Health benefits
Municipal Solid Waste Management
Infrastructural Investment in Rural Areas
Employment Generation
Additional Income to Farmers

Amendments are done to the National Policy on Biofuels due to advancements in the field of Biofuels. These include

To allow more feedstocks for production of biofuels,
To advance the ethanol blending target of 20% blending of ethanol in petrol to ESY 2025-26 from 2030,
To promote the production of biofuels in the country, under the Make in India program, by units located in Special Economic Zones (SEZ)/ Export Oriented Units (EoUs),
To add new members to the NBCC.
To grant permission for export of biofuels in specific cases, and
To delete/amend certain phrases in the Policy in line with decisions taken during the meetings of National Biofuel Coordination Committee.

Mission Purvodaya *

Mission Purvodaya emphasized harnessing the untapped potential of this region to fuel the next wave of national growth. This will drive Eastern India towards self-reliance and contribute in the making of an Aatmanirbhar Bharat. India is developing gas infrastructure including pipelines, LNG terminals and CGD network.

SATAT (Sustainable Alternative Towards Affordable Transportation) *

The target is to have 5000 compressed biogas plants of 15 MMT per year with an investment potential of USD 20 bn.
The SATAT scheme aims to set up Compressed Bio-Gas production plants and make CBG available in the market for use as a green fuel.' SATAT’, launched on 1.10.2018, envisages targeting production of 15 MMT of CBG from 5000 plants by 2023.

Explore Government policies/ schemes in the Oil and Gas sector >

Financial Support

The Oil Industry Development Board, established under the Oil Industry (Development) Act, 1974 provides financial including loans and grants for development of the Oil Industry in India. *
The National Policy on Biofuels 2018 indicates a viability gap funding scheme for 2G ethanol Bio refineries of INR 5000 crore in addition to tax incentives. *
The Government of India has approved policy framework to promote Enhanced Recovery (ER), Improved Recovery (IR) and Unconventional Hydrocarbon (UHC) production methods/ techniques for Oil and Gas. The framework provides fiscal incentives in the form of partial waiver of royalty and cess. *
To provide financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity, the Department of Food & Public Distribution has introduced a Scheme which aims to infuse INR 1,332 crore via Interest Subvention route. *
The Ethanol Blended Petrol (EBP) programme is being implemented by the government through Oil Marketing Companies (OMCs) under which OMCs sell ethanol blended petrol with percentage of ethanol up to 10%. To support this initiative, the government has reduced the GST rate from 18% to 5% on ethanol meant for EBP programme. *

Investment Opportunities

Under the Hydrocarbon Exploration & Licensing Policy (HELP), the exploration acreage has now reached to about 2,15,000 sq. km. after 4 successful bidding rounds of Open Acreage Licensing Programme (OALP). The future exploratory work commitment comprises of the following: *
- 29,270 line km of 2D Seismic Survey
- 43,272 square km of 3D Seismic Survey
- 369 Exploratory Wells
- 290 core analysis to establish Shale Resources

These commitments have a potential to generate an investment of about USD 2.35 Bn in exploratory work alone. *

Under the 2G Ethanol Programme, Oil Marketing Companies (OMCs) are in the process of setting up 12 2G bio-refineries for production of ethanol with an investment of about USD 1.33 Bn. *
The Oil Industry Development Board provides financial and other assistance for development of Oil Industry in India. Strategic Petroleum Reserves Ltd. (ISRPL), a wholly owned subsidiary of Oil Industry Development Board (OIDB) has been mandated to build and operate strategic crude oil reserves. *
Under Phase I of Strategic Petroleum Reserve (SPR) programme, the government (through ISRPL) has built SPR facilities with a total capacity of 5.33 MMT. For Phase II of the programme, Union Cabinet has already given “In Principle’ approval to establish 6.5 MMT Strategic Petroleum Reserves under PPP mode. *
Shale Gas and Oil Exploration has immense opportunities in India and is also promoted of the government. The resources can be found in number of sedimentary basins (Gangetic plain, Gujarat, Rajasthan, Andhra Pradesh and other coastal areas) in India, including the hydrocarbon bearing ones – Cambay, Assam-Arakan and Damodar. *
During the last 3 years, Indian companies have acquired strategic stakes in overseas assets in UAE, Oman, Israel and Russia. *

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Sector Reports

Foreign Investors

British Petroleum (UK)
Cairn Energy (India)
Shell (UK)
Niko Resources (Canada)
OILEX Limited (Australia)
Hardy Oil & Gas Plc. (UK)

Agencies

Sources

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