Domestic oil and gas explorers, including ONGC, Cairn, and Reliance Industries, are under pressure as the domestic natural gas output dipped by 11 per cent and crude oil production was down by 0.8 per cent year-on-year in June. 

Crude oil imports are expected to increase from 76 per cent in 2011-12 to 78 per cent by 2016-17. The total domestic gas production is about 115 mmscmd, and demand/supply is about 165 mmscmd. The gap is met through imported more expensive gas.

While the output is declining, petroleum product consumption in June was up 7 per cent, triggered by an almost 50 per cent increase in diesel demand. The rise in diesel consumption was driven by the price differential with petrol, extreme summer seasons and power cuts leading to use of generators.

According to a data released by the Petroleum and Natural Gas Ministry, the drop in crude oil output was because of a 5.6 per cent decline in production from ONGC’s Mumbai High Offshore at 1.280 million tonne in June year-on-year. Oil production from Cairn’s Rajasthan block was also less than budgeted due to the intermittent closure of a few wells in the Mangala fields because of well bore problems, and less than estimated oil production from Bhagyam fields. 

The country’s natural gas output has fallen for the 19{+t}{+h} straight month in June mainly because of a continued drop in production from the country’s largest gas fields on the East Coast operated by Reliance Industries. Gas production from the offshore fields, including D6, fell by almost 13.8 per cent year-on-year in June. 

Domestic refiners (18 public sector and two private) processed 6.1 per cent more crude oil in June annually. This was mainly driven by private sector players — Essar Oil and Reliance Industries — who turned 10.7 per cent more fuel into products. Reliance Industries does not share data for its second refinery in Jamnagar, which is an export-oriented refinery.

  richa.m.tripathi@thehindu.co.in

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