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India Sep oil output down around 6% YoY, gas down 11.5%, say sources

Wednesday, Oct 21, 2020

 

By Sukalp Sharma

 

NEW DELHI – The weakness in India's crude oil and natural gas production persisted in September as well, with domestic oil output declining around 6% on year to 2.5 mln tn and natural gas production contracting 11.5% to 2.3 bcm, sources with direct knowledge of the matter told Cogencis.

 

Sequentially, too, domestic oil and gas production was lower in September. In August, India's crude oil production stood at 2.6 mln tn, while natural gas output was 2.4 bcm.

 

Domestic oil output in September was around 7% lower than the target for the month, while natural gas production was over 18% lower than the aim, sources said.

 

A drop in production from ageing fields and delays in bringing new fields on stream are the primary reasons for the decline in oil and gas output in India. A slump in oil and gas prices has also disincentivised producers from expediting production from new areas.

 

The COVID-19 crisis has only added to the woes of the sector, as numerous new production projects are now delayed with global hydrocarbon machinery supply chains being hit. The impact of low prices and supply chain disruptions has been more pronounced on the natural gas segment.

 

The petroleum ministry is likely to soon make public the hydrocarbon production data for September.

 

India is among the top guzzlers of oil and gas globally, and imports account for a massive share of this consumption. At present, India is the world's third-largest importer of crude oil and the fourth-largest liquefied natural gas importer. The government has been pushing hard to reduce the country's dependence on hydrocarbon imports, but growing demand and falling domestic production are undermining such efforts.  End

 

Edited by Avishek Dutta

 

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