Page 6 - AsianOil Week 41 2021

AsianOil SOUTH ASIA AsianOil

Production frustrations showing that output climbed to 2.92 bcm in
New Delhi has been growing increasingly frus- August from 2.43 bcm a year earlier.
trated at ONGC and OIL’s inability to boost their The government has also introduced pric-
oil and gas production in recent years. The gov- ing and marketing freedoms for all fields whose
ernment has even threatened to auction off fields development was approved after February 2019,
belonging to ONGC and OIL if they fail to bring but production from these fields is currently very
them online. low.
Despite the government’s repeated calls to
action, Indian crude and condensate production What next
slumped from 37.8mn tonnes (759,000 barrels OALP-VI did little to change the composition
per day) in financial year 2012-2013 to 30.5mn of investors in the Indian upstream, but this is
tonnes (612,500 bpd) in 2020-2021, while gas far from a surprise given the challenges facing
production fell from 39.75bn cubic metres to upstream investors. Indeed, NewsBase suggested
27.78 bcm over the same timeframe, according at the launch of the bid round that the country’s
to Petroleum Planning & Analysis Cell (PPAC) legacy of bureaucratic government could well
data. scare off investors.
Price and marketing controls, aggressive tax- At the same time, however, we acknowl-
ation policies and excessive bureaucracy have all edged the most recent changes made by the gov-
been blamed for the deterioration in the coun- ernment to address investor concerns – chief
try’s upstream performance. Not only have sti- among these being the move to scrap the coun-
fling price controls left state majors unwilling to try’s retroactive taxation system in early August.
expand production from mature fields, but poor The Indian government has been drawn into a
ease of doing business has left private and foreign number of taxation disputes owing to the system,
investors reluctant to invest. which has also undermined the country’s image
Ultimately, the country has come to depend as an attractive investment destination.
on imported oil to meet more than 80% of its By scrapping retroactive taxation, the govern-
needs while foreign supplies of gas meet more ment has made it clear that it wants to encourage
than half of domestic demand. foreign investors in all sectors – including the oil
There is one bright spot and that lies off the and gas industry. Indian Minister of Petroleum
country’s eastern coast in the deep waters of the and Natural Gas Hardeep Singh Puri, who took
Krishna Godavari (KG) basin. Pricing reforms over the energy portfolio in July, pledged that the
for all deepwater, ultra-deepwater and high government would work more closely with the
pressure-high temperature (HPHT) fields that industry to resolve issues.
entered production from January 2016 have seen With attractive pricing, a government open
renewed investment from Reliance India Ltd to engaging with investors and a rebound in oil
(RIL) and BP in their deepwater KG-DWN-98/3 and gas prices, India should be on the cusp of
(KG-D6) block as well as from ONGC in the attracting a new wave of players to its upstream.
neighbouring KG-DWN-98/2 (KG-D5) block. In many ways, the success of the next bid round
With new fields having come onstream at – OALP-VII – should serve more as a test of how
both KG-D6 and KG-D5, India’s gas produc- desirable India’s hydrocarbon basins than a poll
tion is once more on the rise, with PPAC data on the country’s policy agenda.™

P6 www. NEWSBASE .com Week 41 14•October•2021