INTRODUCTION

Oil and gas sector is among the eight core industries in India. India is on the trajectory of becoming the world`s fastest growing energy market-- supported by growing demand, rising investments, and government support.

INDUSTRY SCENARIO

India has 23 refineries—18 under public sector, 3 under private sector and 2 in a joint venture. Private companies own about 35.29% of the total refining capacity in FY20.

Top three companies are – IOC, Bharat Petroleum Corporation (BPCL) and Reliance Industries (RIL).

Indian Oil Corporation (IOC) is the largest domestic refiner.

INVESTMENTS

Following are some investments proposed in the oil & gas industry:

• The Indian oil and natural gas sector is likely to witness an investment of US$ 206 billion in the next eight to ten years. It also plans to invest Rs. 500 crore (US$ 71.54 million) at Chitradurga in Karnataka
• In December 2020, The Indian Oil Corporation (IOCL) announced plans to invest Rs. 1,689 crore (US$ 228.81 million) in new projects in Andhra Pradesh
• In October 2020, Torrent Gas Ltd. announced plan to spend Rs. 8,000 crore (US$ 1.1 billion) over the next five years to expand its urban gas operations with the aim of setting up 500 CNG dispensing pumps by March 2023
• JBM signed an MoU with the Ministry of Petroleum and Natural Gas (MoPNG), Govt. of India under  which it will endeavor to establish and operate 500 CBG production projects pan India.

GOVERNMENT INITIATIVES & SUPPORT

The government of India has allowed

• 100% FDI in upstream and private sector refining projects
• 49% FDI in public sector refining projects without any disinvestment or dilution of domestic equity in the existing PSUs under automatic route

FUTURE OUTLOOK

The oil & gas industry is expected to grow robustly with many players proposing future investments to cater to growing demand. The energy consumption is India is anticipated to grow faster than energy demand of all major economies on account of growing economy & population.

Moreover, the country`s share in global primary energy consumption is projected to increase by two-fold by 2035.

Crude oil consumption is expected to grow at a CAGR of 3.60% to 500 million tonnes by 2040.

Natural Gas consumption is forecast to increase at a CAGR of 4.18% to 143.08 million tonnes by 2040.

Diesel demand in India is expected to double to 163 MT by 2029-30.

With the economy expected to open up fully in FY`22 including scheduled commercial flights coupled with fuel price rise should augur well for Oil & Gas companies. Planned disinvestment in PSUs is also a positive.