Page 5 - AsianOil Week 48

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India has high hopes for oil, gas production
PERFORMANCE
INDIA hopes to reverse a multi-year decline in crude oil production through a five-year investment strategy executed by its state-run developers.
Minister of Petroleum and Natural Gas Dharmendra Pradhan said on December 3 that the government had set a production target of 38.91mn tonnes (781,000 barrels per day, bpd) of oil and 55.68bn cubic metres of gas by finan- cial year 2023-2024. This would represent an increase of 14% and 69% respectively from the 34.2mn tonnes (687,000 bpd) of oil and 32.87 bcm in 2018-2019.
Oil production recorded its eighth consec- utive year of declines in the last financial year, while gas output flatlined.
The minister said state-run Oil and Natural Gas Corp. (ONGC) and Oil India Ltd (OIL) had drawn up initial upstream vestment plans – based upon their existing acreage – for a com- bined INR1.78tn ($24.8bn) over the next five years.
“The tentative domestic investment in next five years by ONGC and [OIL] in explora- tion and production related activities is about [INR1.60 trillion ($22.3bn)] and [INR175.75bn
($2.45bn)] respectively,” Pradhan said in a writ- ten statement to Parliament.
Pradhan said separately that India’s state-run oil and gas players intended to spend a combined INR936.39bn ($13.05bn) in 2019-2020, which was 2.13% lower year on year.
The government has introduced several upstream reforms to encourage foreign and private investment, but the country’s state- run developers are still responsible for the vast majority of production. New Delhi has been driving the public sector for years to improve oil and gas output, with little to show for its efforts.
National oil production slid 5.09% y/y in October to 2.74mn tonnes (648,000 bpd), while output in April-October period shrank 5.83% to 19.11mn tonnes (655,000 bpd). The figures were also 7.21% and 4.91% below target respectively. ONGC and OIL both reported declines in crude production in October, with the former seeing output slide 2.97% to 1.71mn tonnes (404,000 bpd) and the latter posting a 3.69% drop to 272,570 tonnes (64,000 bpd).
The country’s gas production, meanwhile, contracted 5.6% y/y in October to 2.64 bcm and by 2.13% in April-October to 18.65 bcm.™
India’s largest refinery project under review
PROJECTS & COMPANIES
THE fate of India’s largest single-site refinery project hangs in the balance after the local gov- ernment announced that it would review the development.
The recently formed Maharashtra State gov- ernment – a coalition of parties led by Shiv Sena – said on December 2 that it would assess several infrastructure projects, including the proposed 60mn tonne per year (1.2mn barrel per day (bpd)) Ratnagiri Refinery and Petrochemicals facility. The complex will include 18mn tpy of petrochemicals production capacity.
Shiv Sena has previously indicated that it is not keen on the integrated project, which will be located in the state’s Raigad district. Shiv Sena was a junior partner in the previous administra- tion, which was led by the Bharatiya Janata Party (BJP), when it backed protests by farmers and local landowners over the project’s proposed location in the Ratnagiri district. The govern- ment bowed to public pressure in February and agreed to move it.
BJP and Shiv Sena’s 30-year political alliance fell apart last month owing to a dispute over which party should fill the chief minister’s role.
The refinery is already running behind sched- ule owing to the previous government’s inability to secure an estimated 10,000 acres (40.46 square
km) of necessary land, resulting in the deadline for completion being pushed from 2022 to 2025. The project is a joint initiative between state-run Indian Oil Corp. (IOC), Hindu- stan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL), Saudi Aramco and Abu Dhabi National Oil Co. (ADNOC). Aramco and ADNOC will jointly own 50% of the refinery, while their Indian part-
ners will hold the other half.
The refinery’s pre-feasibility study was com-
pleted in January.
The announcement of the review comes
just days after it emerged that project costs had ballooned by almost 80%. Reuters reported on November 27 that a joint economic coun- cil between the United Arab Emirates (UAE) and Saudi Arabia had reviewed the plant and expected costs to reach $70bn, up from an origi- nal price tag of $45bn.
The complex was first unveiled in December 2015, during the BJP’s time in office.™
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