Oil Imports Surge As Domestic Crude Production Continues To Fall For Seven Years In A Row

Indian domestic crude oil production continues to decline while the imports and demand soar to greater heights for seven years in a row. The output shrank by four per cent in the 11 months to February 2019 from a year earlier. Imports met 83.8 per cent of local oil needs during April-Feb of 2018-19, reports Economic Times.

Domestic crude output has been falling unabated since 2012-13 despite heavy investments into boosting the production from ageing fields and discovering newer ones. In 2015, Prime Minister Narendra Modi had set a target to cut the import dependence to 67 per cent by 2022.

Following the announcement, several plans and policies were also brought in place to add thrust to the languishing domestic production while also expanding the usage of alternative fuel sources like natural gas and biofuels. But, these are long term measures are are still to deliver much impact.

Oil Ministry’s monthly production report has blamed the depleting fields and the inability of companies to make any major oil discoveries for years.

ONGC, the country’s largest oil producer, saw oil production drop 5.4 per cent while Oil India’s output shrank 2.6 per cent. Fields operated by private players also reported 1.3 per cent lower output. Operational problems such as the absence of rigs or malfunctioning equipment system, sub-sea leakage in some fluid lines of Mumbai High and Neelam Heera fields, and under-performance in some Gujarat fields contributed to lower production by ONGC, Oil Ministry’s aforementioned report said.

Delayed upgrade of Mangala Processing Terminal, delayed drilling, and closure of nearly 100 wells due to liquid handling constraint at the terminal and other technical limitations have affected production at Vedanta’s prolific Barmer block in Rajasthan, as per the official report. Vedanta alone produces close to 25 per cent of total domestic crude oil output.