The history of the Indian oil industry extends back to the period of the British Raj, at a time when petroleum first became a primary global energy source.
1866 : Oil discovery at Nahorpung, Assam. Not explored. 1882 : Big "Oil Seepage" in Digboi during construction of Dibrugarh-Ledo Railway Line. The first oil production started in India in 1889 near the town of Digboi in the state of Assam. A Small thatched structure was erected and christened "Oil well no.1" or "Discovery". [1] This discovery came on the heels of industrial development. The Assam Railways and Trading Company (ARTC) had recently opened the area for trade by building a railway and later finding oil nearby. The first well was completed in 1890 and in 1893 first refinery started at Margharita, Assam. [2] The Assam Oil Company was established in 1899 to oversee production. In 1901, Digboi Refinery was commissioned supplanting the earlier refinery at Margharita. At its peak during the Second World War the Digboi oil fields were producing 7,000 barrels per day.[ citation needed ]. In the year 1909, IBP (Indo Burmah Petroleum) was incorporated in Rangoon to explore oil wells that had been discovered in Burma and Assam. [3]
Oil in colonial India was mostly exploited by a number of British companies with intricate alliances. Their output began to increase during the first and second world wars to support British troops and industries in the United Kingdom. [4]
In 1928, Asiatic Petroleum Company ( India) started cooperation with Burmah Oil Company. This alliance led to the formation of Burmah-Shell Oil Storage and Distributing Company of India Limited. Burmah-Shell began its operations with import and marketing of Kerosene. On 24 January 1976, the Burmah Sell was taken over by the Government of India to form Bharat Refineries Limited. On 1 August 1977, it was renamed as Bharat Petroleum Corporation Limited. [5]
After India won independence in 1947, the new government moved to a Communist system, often termed as License Raj. In terms of economic policy this meant a far bigger role for the government and little or no role for the private sector. This resulted in a focus on centralized planning, heavily bureaucratic and inefficient system that meant a large public sector and economic protectionism. [6]
The foreign companies continued to play a key role in the oil industry. Oil India Limited was still a joint venture involving the Indian government and the British owned Burmah Oil Company (presently, BP) whilst the Indo-Stanvac Petroleum project in West Bengal was between the Indian government and the American company SOCONY-Vacuum (presently, ExxonMobil). [7] This changed in 1956 when the government adopted an industrial policy that placed oil as a “schedule A industry” and put its future development in the hands of the state. [7] In October 1959 an Act of Parliament was passed which gave the state owned Oil and Natural Gas Commission (ONGC) the powers to plan, organise, and implement programmes for the development of oil resources and the sale of petroleum products and also to perform plans sent down from central government.
In order to find the expertise necessary to reach these goals foreign experts from West Germany, Romania, the US, and the Soviet Union were brought in. [7] The Soviet experts were the most influential and they drew up detailed plans for further oil exploration which were to form part of the second five-year plan. India thus adopted the Soviet model of economic development and the state continues to implement five-year plans as part of its drive towards modernity. [8] The increased focus on exploration resulted in the discovery of several new oil fields most notably the off-shore Bombay High field which remains by a long margin India's most productive well. [7]
The process of economic liberalisation in India began in 1991 when India defaulted on her loans and asked for a $1.8 billion bailout from the IMF. [9] This was a trickle-down effect of the culmination of the cold war era; marked by the 1991 collapse of the Soviet Union, India's main trading partner. The bailout was done on the condition that the government initiate further reforms, thus paving the way for India's emergence as a free market economy, which would open up its markets to western companies. [10]
For the ONGC this meant being reorganised into a public limited company (it is now called for Oil and Natural Gas Corporation) and around 2% of government held stocks were sold off. [7] Despite this however the government still plays a pivotal role and ONGC is still responsible for 77% of oil and 81% of gas production while the Indian Oil Corporation (IOC) owns most of the refineries putting it within the top 20 oil companies in the world. [11] The government also maintains subsidised prices. [11] As a net importer of oil however India faces the problem of meeting the energy demands for its rapidly expanding population and economy and to this the ONGC has pursued drilling rights in Iran and Kazakhstan and has acquired shares in exploration ventures in Indonesia, Libya, Nigeria, and Sudan. [11]
India's choice of energy partners however, most notably Iran led to concerns radiating from the US. [11] A key issue today is the proposed gas pipeline that will run from Turkmenistan to India through politically unstable Afghanistan and also through Pakistan. [11] However, despite India's strong economic links with Iran, India voted with the US when Iran's nuclear program was discussed by the International Atomic Energy Agency although there are still very real differences between the two countries when it comes to dealing with Iran. [11]
The Burmah Oil Company was a leading British oil business which was once a constituent of the FTSE 100 Index. In 1966, Castrol was acquired by Burmah, which was renamed Burmah-Castrol. BP Amoco purchased the company in 2000.
Oil India Limited (OIL) is the second largest government owned hydrocarbon exploration and production corporation. It is under the ownership of Ministry of Petroleum and Natural Gas, Government of India with its operational headquarters in Duliajan, Assam, India. The corporation is a Navratna with its corporate offices in Noida in the New Delhi-NCR region.
Petronet LNG Ltd is an Indian oil and gas company formed by the government of India to import liquefied natural gas (LNG) and set up LNG terminals in the country. It is a joint venture company promoted by the Gas Authority of India Limited (GAIL), Oil and Natural Gas Corporation Limited (ONGC), Indian Oil Corporation Limited (IOC) and Bharat Petroleum Corporation Limited (BPCL). Petronet LNG Limited, one of the companies in the Indian energy sector, has set up the country's first LNG receiving and regasification terminal in Dahej, Gujarat, and another terminal in Kochi, Kerala. While the Dahej terminal has a nominal capacity of 17.5 million tonnes per year, the Kochi terminal has a capacity of 5 million tonnes per year. Plans to build a third LNG terminal in Gangavaram, Andhra Pradesh were dropped in October 2019.
Bongaigaon Refinery is an oil refinery and petrochemical complex located at Bongaigaon in Assam. It was announced in 1969 and construction began in 1972.
Oil and Natural Gas Corporation (ONGC) is a government owned crude oil and natural gas corporation. Its registered office is in New Delhi. It is under the ownership of Ministry of Petroleum and Natural Gas, Government of India. It is the largest oil and gas exploration and production company in the country, and produces around 70% of India's crude oil and around 84% of its natural gas. In November 2010, the Government of India conferred the Maharatna status to ONGC.
Bharat Petroleum Corporation Limited (BPCL) is a government owned oil and gas corporation. It is under the ownership of Ministry of Petroleum and Natural Gas, Government of India headquartered in Mumbai, Maharashtra. The corporation operates two large refineries of the country located in Kochi and Mumbai. The company is India's 2nd largest downstream oil company and is ranked 275th on the Fortune list of the world's biggest corporations as of 2019. BPCL ranked 672 in the Forbes 2018 list.
Hindustan Petroleum Corporation Limited (HPCL) is a subsidiary of Oil and Natural Gas Corporation with its headquarters in Mumbai, Maharashtra. It has a 25% market-share in India among public sector undertakings (PSUs) coupled with a strong marketing infrastructure. Its parent company is ONGC which owns a majority stake in the company. The company is ranked 367th on the Fortune Global 500 list of the world's biggest corporations as of 2016. HPCL was removed from NIFTY 50 INDEX in March 2019 On 24 October 2019, the company became a Maharatna PSU.
The Ministry of Petroleum and Natural Gas (MOP&NG) is a ministry of the Government of India. It is responsible for the exploration, production, refining, distribution, marketing, import, export, and conservation of petroleum, natural gas, petroleum products, and liquefied natural gas in India.
GAIL (India) Limited is a government corporation responsible for natural gas processing and distribution in India headquartered in New Delhi, India. It is under the ownership of Ministry of Petroleum and Natural Gas, Government of India. It has the following business segments: natural gas, liquid hydrocarbon, liquefied petroleum gas transmission, petrochemical, city gas distribution, exploration and production, GAILTEL and electricity generation. GAIL was conferred with the Maharatna status on 1 Feb 2013, by the Government of India. Only eight other Public Sector Enterprises (PSEs) enjoy this coveted status amongst all central CPSEs. GAIL was listed in the 131st position among India's most trusted brands according to the Brand Trust Report 2014, a study conducted by the Trust Research Advisory.
The Economy of Assam is largely agriculture based with 69% of the population engaged in it.
Krishna Godavari Basin is a peri-cratonic passive margin basin in India. It is spread across more than 50,000 square kilometres in the Krishna River and Godavari River basins in Andhra Pradesh. The site is known for the D-6 block where Reliance Industries discovered the biggest natural gas reserves in India in 2003
New Exploration Licensing Policy (NELP) was conceptualised by the Government of India, during 1997-98 to provide an equal platform to both Public and Private sector companies in exploration and production of hydrocarbons with Directorate General of Hydrocarbons (DGH) as a nodal agency for its implementation. It was introduced to boost the production of oil and natural gas and providing level playing field for both public and private players.
The Directorate General of Hydrocarbon (DGH) is the Indian governmental regulatory body under the Ministry of Petroleum and Natural Gas.
The Kaveri delta coal-bed methane extraction project is a series of projects to extract methane gas and hydrocarbon from coal-bed by using hydraulic fracturing in the Kaveri river basin in Tamil Nadu, India. The extraction projects faced series of opposition from the farmers, environmentalists, and experts as exploration areas covering Nagapattinam, Thanjavur and Thiruvarur districts which are the major rice cultivating area of Tamil Nadu.
MoPNR, is a Pakistan Government's federal and executive level ministry responsible to ensure availability and security of sustainable supply of oil and gas for economic development and strategic requirements of Pakistan and to coordinate development of natural resources of energy and minerals.
A government-owned enterprise in India is called a Public Sector Undertaking (PSU) or a Public Sector Enterprise. These companies are wholly or partly owned by the Government of India or one of the many state or territorial governments or both together in parts. The officers working in these entities are gazetted officers. The company stock is majority-owned by the government in a PSU. PSUs are classified as Central public sector undertakings which are wholly or partly owned by Government of India or State Level public sector undertakings which are wholly or partly owned by state or territorial governments. In 1951, there were just 5 enterprises in the public sector in India, but in March 2019 this had increased to 348. These enterprises represented a total investment of about ₹16.41 lakh crore as on 31 March 2019. The total paid up capital as on 31 March 2019 stood at about ₹2.76 lakh crore. CPSEs have been earned revenue of about ₹25.43 lakh crore during the financial year 2018–19.
Bangladesh is the nineteenth-largest producer of natural gas in Asia. Gas supplies meet 56% of domestic energy demand. However, the country faces an acute energy crisis in meeting the demands of its vast and growing population. Bangladesh is a net importer of crude oil and petroleum products. The energy sector is dominated by state-owned companies, including Petrobangla and the Bangladesh Petroleum Corporation. Chevron, ConocoPhillips, Equinor, Gazprom and ONGC are major international companies engaged in Bangladesh's hydrocarbon industry, with Chevron's gas fields accounting for 50% of natural gas production.
Indian Oil Corporation Limited (IOCL), d/b/a IndianOil, is an Indian government oil and gas corporation. It is under the ownership of Ministry of Petroleum and Natural Gas, Government of India headquartered in New Delhi. It is the largest commercial oil company in the country, with a net profit of ₹19,106 crore for the financial year 2016–17. It is ranked 1st in Fortune India 500 list for year 2016 and 117th in Fortune Global 500 list of world's largest companies in the year 2019. As of 31 March 2017 IndianOil's employee strength is 33,135, out of which 16,545 are in the officer cadre. It is India's largest downstream oil company, a turnover of ₹5,06,428 crore and a net profit of ₹21,346 crore in 2017–18.
The oil and gas industry in India dates back to 1889 when the first oil deposits in the country were discovered near the town of Digboi in the state of Assam. The natural gas industry in India began in the 1960s with the discovery of gas fields in Assam and Gujarat. As on 31 March 2018, India had estimated crude oil reserves of 594.49 million tonnes (MT) and natural gas reserves of 1339.57 billion cubic meters (BCM).
Ashoknagar Oilfield is an oil field located at Ashoknagar in the North 24 Parganas district, West Bengal. The oil field is located 48 km from the state capital Kolkata. The oil field was discovered in 2018 by ONGC. This is the first oil field in West Bengal and East India.
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