India’s crude oil production in August decreased 5.4% year-on-year. Production volumes of Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) declined 3.7% year-on-year and 4.3% year-on-year, respectively, and that of fields under production-sharing contracts decreased 9.5% year-on-year during the month, rating agency India Ratings and Research (Ind-Ra) said its monthly report.
Crude oil import volume increased 5.5% year-on-year and India’s crude oil import dependency was 84.2% in August 2019. Refining throughput increased 2.4% year-on-year to 22.0 million metric tonnes (mmt) in August 2019 and was down 1.4% year-on-year at 106.3mmt during April-August 2019.
India’s petroleum product output increased 2.6% year-on-year to 22.2mmt in August 2019. On a cumulative basis, production was down 1.1% year-on-year during April-August 2019.
The price of Brent crude averaged USD62.8 per barrel (bbl) during September 2019 as against USD59.0/bbl during August 2019 and USD78.9/bbl during September 2018. Further, the crude prices averaged 12.6% year-on-year lower at USD65.4/bbl during April-September 2019.
In August 2019, LNG import volumes increased 10.3% year-on-year, supporting the 2.8% year-on-year increase in NG consumption. Domestic NG production decreased 3.6% year-on-year and 1.1% mom. During the month, ONGC and private/joint venture fields recorded a fall of 2.7% year-on-year and 9.5% year-on-year, respectively, in NG production volume, while OIL’s production volume was stable. Domestic NG contributed 47% to the overall domestic consumption during August 2019.
Further, India’s dependency on imported NG has increased indicated by stagnant domestic production and increased imports since 2008. The average LNG import share was 50% of the overall domestic NG consumption during April-August 2019 and 46% during FY19, as compared with 25% in FY08.
LNG imports increased at a CAGR of 8.7% to 75 million metric standard cubic meter per day (mmscmd) in FY19 from 30mmscmd in FY08 due to a sustained demand. The increased use of NG in fertilizer and power sectors coupled with growth of city gas distribution networks has driven the domestic NG consumption. On the other hand, domestic NG production has been stagnant at around 90mmscmd, at a CAGR of 0.2% since FY08. This has led to increased reliance on the import of re-liquefied natural gas (RLNG), as domestic consumption has been gradually increasing, the report said.