The story of India's failure to drill its own oil in 9 charts

These nine charts explain how a failed energy exploration policy has stalled expansion of India's domestic oil production

Sai Manish 

Even as global crude oil prices and Indian retail fuel prices continue their journey skywards, the Indian government and respective state governments seem to be following a wait and watch policy on tax cuts to moderate spiraling petrol and diesel prices. That whenever OPEC pulls the harness, India feels the pressure is well known. India’s dependence on global crude oil is also a testament to the sorry state of affairs its own energy exploration industry finds itself in. The New Exploration and Licensing Policy (NELP) adopted by the government in 1997 has done little to strengthen India’s energy security by ramping up domestic production, find new oil reserves and operationalize more oil wells and blocks. The Modi administration introduced the Hydrocarbon Exploration and Licensing Policy (HELP) on October 15, 2015 – the birth date of former Indian President APJ Abdul Kalam. The policy that aims to ease things for those involved in oil exploration in India eliminates the need to pay oil cess, 100 per cent participation by foreign companies in exploration, single license for conventional and non-conventional hydrocarbon exploration and eliminating restrictions on exploration activity during the contract period for an energy company. Business Standard analysed the exploration and discovery of oil in India over the last decade and what emerges is a story of massive failures and unimpressive achievements in securing the country’s energy security. The story of the sorry state of India’s oil exploration can be told in the following nine charts.

Chart 1: How much oil does India really have?

India’s reserves of crude oil have more or less remained the same over the years. Various phases of NELP have helped in increasing in-place crude oil reserves but over the last few years, these reserves have fluctuated while India’s recoverable reserves quite naturally have fallen consistently.

Chart 2: How much oil does India really produce?

While India has consistently followed the principle of strategic exploitation of energy resources with the aim of future conservation, its domestic production has virtually stagnated over the years as is evidenced by the charts below.

Chart 3: Who produces how much of India’s oil?

While foreign energy companies like Cairn, British Petroleum, Shell and Focus along with Indian energy majors like Reliance and Essar have partaken in oil exploration, a bulk of the oil is still produced by state owned Oil & Natural Gas Corporation of India (ONGC). As is evidenced by the chart below, ONGC, Oil India Limited and private companies have failed to augment their production over the years.

Chart 4: India’s increasing ‘dry well’ problem

While many companies drill for oil, the number of dry wells over the years has increased substantially. Even though the number of oil wells have increased along with the meterage of these wells over the years, these new oil wells have failed to improve India’s domestic crude oil production

Chart 5: How many new oil wells does India dig?