India’s Crude Oil Production Falls 2% in August, Import Bill Rises 12%

India’s crude oil production for the month of August fell around two per cent to 22.1 Million Barrels (MBBL) for the month of August as compared to the corresponding month a year ago while natural gas output witnessed a growth of 3.69 per cent to 2,773 Million Standard Cubic Meter (MMSCM) in the same month.

The country’s gross petroleum imports in value terms increased 12 per cent to $7.4 billion in August as compared to the corresponding month.

Cumulatively, gross petroleum import bill increased 16.55 per cent to $35.9 billion in the first five months of 2017-18 fiscal as compared to the corresponding period last year adding pressure on the country’s current account deficit which ballooned to $14.3 billion (2.4 per cent of GDP) in the first quarter ended June.

Crude oil production dipped due to poor performance of fields under Production Sharing Contracts (PSC).

The growth in natural gas production can be attributed to healthy performance of acreages under government-owned Oil and Natural Gas Corporation (ONGC) and Oil India (OIL), data released by Petroleum Planning and Analysis Cell (PPAC) indicated.

On a cumulative basis, the country’s crude oil production in the first five months of 2017-2018 remained almost flat at 110.7 MBBL, while cumulative natural gas production during the period grew 4.31 per cent to 13,689.67 MMSCM as compared to the corresponding period a year ago.

ONGC Crude oil and Natural Gas Production

Government-owned Oil and Natural Gas Corporation (ONGC), responsible for 60.80 percent of country’s crude oil production in August, witnessed a crude output growth of 1.78 per cent to 1,898 Thousand Metric Tonne (TMT) in August.

Cumulatively, the oil and gas behemoth witnessed a 2.52 per cent increase in production to 9,458 TMT in the first five months.

The company’s natural gas production witnessed a growth of 5.83 per cent to 1,953 MMSCM in August as compared to the year ago period. Cumulatively, gas production increased 10.13 per cent to 9,738 MMSCM in the first five months.

Oil India crude oil and natural gas production

Oil India Ltd (OIL), the country’s second-largest oil and natural gas exploration PSU, also witnessed an increase in its crude oil production, which grew more than 6 per cent to 288 TMT in August.

The company produced approximately 1,417 TMT of crude witnessing a growth of 5.50 per cent in the first five months of the present financial year. OIL’s natural gas production witnessed a 7.14 per cent increase to 261 MMSCM in August and a tepid growth of 0.35 per cent in the first five months current fiscal.

Production from fields under PSCs operated by private upstream companies and JVs

Oil fields under Production Sharing Contracts (PSCs) operated by Joint Ventures (JVs) or private upstream companies witnessed a production decline of more than 10 per cent to 833 TMT in August as compared to the year ago period.

Cumulatively, crude production from these fields declined by more than 7.60 per cent to 4,230 TMT in the first five months.

Also, natural gas production from PSC fields declined more than 4.51 per cent to 558 MMSCM in August. Cumulatively, gas output from these fields declined by more than 11 percent to 2,717 MMSCM in the first five months of current financial year.

According to data provided by PPAC, the steep decline can be attributed to underperformance of Coal Bed Methane (CBM) fields operated by Reliance Industries (RIL) in Sohagpur West, underperformance of wells in KG-OSN operated by Gujarat State Petroleum Corporation (GSPC) and planned maintenance of wells in Raniganj East operated by Essar.

Crude Oil Imports

India’s crude oil import volumes in August decreased over 3 per cent to 18.1 Million Tonne (MMT) and in value terms increased 10.34 per cent to $6.4 billion for the month as compared to a year ago period.

Crude oil imports between April and August 2017 remained flat and in value terms increased 15.67 per cent to $31 billion as compared to the corresponding period a year ago.

Crude oil import dependency

The country’s import dependence on crude oil increased to 82.2 per cent in August as compared to 82 per cent in the corresponding month a year ago. Cumulatively, import dependence in the first five months increased to 82 per cent as compared to 81.7 per cent in the same period a year ago.