India’s domestic oil and gas production at a five year low; Overseas output grew 84 percent

India’s domestic oil and gas production touched a five year low in 2016-2017 dropping more than 20 percent to 68 million tonne. The country’s import dependence for crude shot up to a five year-high of 83.4 percent, data from the oil ministry’s arm Petroleum Planning and Analysis Cell (PPAC) showed.

India currently has oil and gas assets in more than 17 countries including Sudan, Colombia, Venezuela, Russia, Vietnam, Syria, Brazil, Azerbaijan and Myanmar. The latest acquisition took place last year by ONGC Videsh (OVL) in Vankor, Russia’s second largest oil and gas field by production.

“PSU upstream oil companies acquired 49.9% stake in Vankor field in Russia from Rosneft. That has catapulted India’s overseas production by 5.5 million tonnes per annum. Moreover they also acquired 29% stake in TYNGD field in Russia, which has resulted in additional production of 0.3 million tones per annum. There is further upside from both the fields in the medium term. This, coupled with incremental production from other fields, notably in Carabobo, Venezeula and Sakhalin, has contributed to the balance production,” K Ravichandran, Senior Vice President at ratings agency ICRA said.

According to data published by PPAC, India’s crude oil import bill is slated to increase by 26 percent to $88 billion in 2017-18 from $70 billion last financial year, considering Indian basket crude oil price of $55 per barrel and an exchange rate of Rs 65 per US dollar for the balance part of the financial year.

The country’s gross petroleum import bill, including shipments of both crude oil and petroleum products, rose 9 per cent last financial year to $80.3 billion on the back of seven percent rise in volumes and a three percent increase in the average crude price, according to data released by the oil ministry.

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