Page 10 - AsianOil Week 47 2021

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India’s oil output slumps in

October as gas soars

PERFORMANCE INDIA’S crude oil and natural gas production
continued to diverge in October, with the for-
mer continuing its years-long decline even as
new fields revitalise gas output.
Oil production contracted by 2.15% year
on year last month to 2.51mn tonnes in Octo-
ber, while gas production jumped 24.7% y/y to
3.01bn cubic metres, according to government Opposition to the prospect of the country’s
data PTI cited on November 23. largest oil and gas producer losing its most
The slide in oil production has been attrib- important assets has prompted the ministry to
uted to declines at mature fields operated by try to assuage concerns. The ministry issued a
state-run Oil and Natural Gas Corp. (ONGC) statement on November 22 noting that ONGC
and Oil India Ltd (OIL). would play a pivotal role in the country’s quest
ONGC’s production dipped 4% y/y to to boost production.
1.64mn tonnes, while OIL saw its production
slip 1.46% to 253,000 tonnes. Divestment opposition
“The government is keen that the domestic pro-
Investment pressure duction of oil and gas should increase exponen-
The Indian government has been pushing for tially. ONGC, being the leading organisation,
ONGC to adopt a new upstream strategy that has to play an important role,” the ministry said.
will reverse a decline in production that has seen It said the volume of exploration work had to
the major’s crude output shrink from 20.2mn increase significantly, in order to lead to new
tonnes (405,700 barrels per day) in financial year discoveries.
2020-2021 from 20.6mn tonnes (413,700 bpd) in The ministry added that it envisaged private
the 2019-2020 and 21.1mn tonnes (423,700 bpd) and foreign players playing a key role in opti-
in 2018-2019. mising and raising output from existing fields by
And while the country’s gas production is on employing “advanced technology, drilling more
the rebound, ONGC delivered 4.4% less gas last production wells, wherever technically feasible,
month at 1.8 bcm. This continues a trend that and better management”.
has seen the major’s output slide to 21.87 bcm It said: “For this, private sector companies can
in 2020-2021 from 23.74 bcm in 2019-2020 and be involved as partners or through various busi-
24.67 bcm in 2018-2019. ness models so that new techniques and technol-
ONGC’s short-term production outlook is ogy can be brought in through such companies
also muddy, with PTI reporting on November 14 which have experience in this. However, all this
that the company’s deepwater KG-DWN-98/2 has to be done by following system and proce-
(KG-D5) block might not begin pumping gas to dures in a transparent manner. ONGC has to
shore before May 2023. prepare its plan and take the right decisions in
The news agency quoted unnamed govern- order to increase domestic production.”
ment officials as saying delays were likely, owing Commenting on the government’s decision
to late work package awards as well as various in 2019 to allow ONGC and OIL how to choose
interface issues between various parts of the the most suitable model – either equity part-
development. It is no surprise, then, that the gov- nerships or service contracts – to boost mature
ernment has asked ONGC to consider selling off asset production, the ministry added: “There is
majority stakes in its two biggest developments enough scope for several large and small com-
– the offshore Mumbai High and Bassein & Sat- panies to operate in the offshore and onshore
ellite (B&S). basins in the country as the substantial area is
The Ministry of Petroleum and Natural Gas’ still available.”
additional secretary of exploration, Amar Nath, Resolving ONGC’s floundering production
sent in a three-page letter on October 28 to is becoming increasingly urgent given the coun-
ONGC chairman and managing director Sub- try relies on foreign oil supplies for 85% of its
hash Kumar suggesting the major sell 60% stakes demand.
in the fields to foreign players. The country’s refinery runs have rebounded
That suggestion has drawn criticism from in recent months as easing coronavirus
ONGC union the Association of Scientific (COVID-19) restrictions have breathed new life
& Technical Offices, with PTI reporting on into fuel demand. The country’s oil product out-
November 21 that it had petitioned Minister of put climbed 14.4% last month to 21.6mn tonnes
Petroleum and Natural Gas Hardeep Singh Puri and by 12% in the first seven months of financial
to nix Nath’s proposal. year 2021-2022 to 141mn tonnes.™

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