IBEF印度石油和天然气工业分析英文20181042页1mb

Summary of India's Oil and Gas Industry

Core Content

India's oil and gas industry is a significant contributor to the country's energy landscape, marked by robust growth, increasing reliance on imports, and substantial investments in infrastructure and technology. The industry is supported by a mix of state-owned enterprises (SOEs), private companies, and foreign direct investment (FDI) policies that foster development and innovation.

Main Points

Executive Summary

• As of September 1, 2018, India had a refining capacity of 247.6 million tonnes, making it the second largest refiner in Asia.
• Private companies own about 35.62% of the total refining capacity.
• India is the world's third-largest energy consumer and fourth-largest LNG importer in 2017.
• The country's share in global primary energy consumption is projected to double by 2035.
• Oil consumption in India is expected to grow significantly, reaching 10.1 million tonnes per day by 2040.

Advantage India

• India's energy demand is expected to triple by 2035, reaching 1,516 Mtoe.
• The oil and gas industry is projected to attract US$25 billion in investments for exploration and production by 2022.
• The government allows 100% FDI in upstream and private sector refining projects, with a 49% FDI limit for public sector projects.
• Policies such as the Open Acreage Licensing Policy (OALP) and Coal Bed Methane (CBM) policy are aimed at encouraging investment and improving recovery rates.

Market Overview and Trends

• India's oil production reached 35.68 million tonnes in 2017-18, with ONGC accounting for 58.26% of the total.
• Proven oil reserves in India were at 600 million metric tonnes as of 2017.
• Proven gas reserves stood at 1.2 trillion cubic metres, with production reaching 31.83 bcm in FY18.
• Gas consumption in India is projected to reach 143.08 bcm by 2040.
• LNG imports account for about one-fourth of total gas demand, with plans to increase import capacity to 50 million tonnes in the next five years.

Exports of Petroleum Products

• India is one of the largest exporters of refinery products, with 23 refineries in operation.
• In FY18, total petroleum product exports reached 66.76 MMT, valued at US$34.89 billion.
• IOC, RIL, and BPCL are the top refiners in India, collectively contributing 70.23% of the total refining capacity.
• Private sector refiners have seen a higher CAGR in crude throughput (9.55%) compared to public sector (3.68%).

Downstream Segment

• The number of OMC retail outlets increased to 63,275 by September 1, 2018.
• IOC owns the largest number of retail outlets (43.11%), followed by HPCL (24.06%), BPCL (22.96%), and MRPL (0.01%).
• There are 21,206 LPG distributors in India as of September 1, 2018.
• The country has a significant pipeline network for crude and refined products, with IOC leading in product pipelines and GAIL in natural gas pipelines.

Upstream Segment

• India has a total of 23 refineries, with 18 in the public sector, two in the joint sector, and three in the private sector.
• The OALP policy has been implemented to increase foreign participation in exploration and production.
• ONGC has initiated shale gas exploration in Burdwan, West Bengal, and plans to invest in drilling activities in 2018-19.
• India is planning to invest US$100 billion in gas infrastructure by 2022, including the expansion of city gas distribution (CGD) networks.

Key Information

Growth Drivers

• Economic Growth: India's energy demand is expected to grow faster than that of all major economies, reaching 11% of global demand by 2040.
• Crude Oil Consumption: Expected to grow at a CAGR of 3.60% to 500 million tonnes by 2040.
• Natural Gas Consumption: Projected to increase at a CAGR of 4.31% to 143.08 bcm by 2040.
• Investments: The oil and gas sector is expected to attract US$25 billion in E&P investments by 2022, and US$27.94 billion in refining capacity expansion by 2030.

Regulatory Overview

• PNGRB Act, 2006: Regulates the entire value chain of the oil and gas industry.
• Auto Fuel Policy, 2003: Provides a roadmap for compliance with vehicular emission norms.
• Freight Subsidy Scheme, 2002: Compensates OMCs for distributing subsidised products to remote areas.
• National Policy on Biofuels, 2018: Proposes 20% ethanol blending in petrol and 5% biodiesel blending in diesel by 2030.
• Domestic Natural Gas Pricing Formula, 2014: Establishes a pricing mechanism for natural gas, with revisions planned every six months.

Strategies Adopted

• Expansions: State-owned companies plan to invest US$20 billion in refinery expansions by 2022. IOC plans to expand refining capacity to 150 million tonnes by 2030.
• Diversification: Companies are moving towards vertical integration, with Oil India Ltd planning to build and operate refineries and IOC entering exploration.
• Non-Conventional Resources: Emphasis on developing shale gas and CBM, with pilot projects initiated.
• FDI and Partnerships: FDI policies allow 100% FDI in upstream and private refining projects, with joint ventures and technical partnerships with foreign firms.

Conclusion

India's oil and gas industry is poised for significant growth, driven by increasing energy demand, supportive FDI policies, and strategic investments in refining and infrastructure. The industry is characterized by a mix of state-owned and private entities, with a strong focus on expanding refining capacity, exploring non-conventional resources, and improving energy efficiency through biofuels and advanced technologies.