In order to face the oil crisis, India decided to – (i) curb consumption of petroleum products for non-essential uses, (ii) develop alternative sources of energy, and (iii) make all out efforts to attain self-sufficiency in oil by stepping up oil exploration activities on-shore and off-shore.
In India, oil exploration began as early as in 1866. The Oil and Natural Gas Commission (ONGC) which was set up on 14th August, 1956, achieved its first success in 1960 when oil was struck at Ankleshwar in Gujarat. This was followed by the discovery of oil at Kalol in Guj arat and at Rudrasagar in Assam in 196 > and at Sanand in Gujarat in 1962. In 1970, ONGC started off-shore drilling-Its major breakthrough in offshore drilling was achieved in 1974 when oil was struck at Bombay High.
In 1981, the Government of India set up the Oil India Ltd., another public sector undertaking for oil exploration in the country. In order to supplement the efforts of ONGC and OIL, the Government also invited foreign oil companies of repute to take up oil exploration in certain selected blocks in India.
The petroleum industry in India has made headway only after Independence. Starting from a modest level of indigenous crude production of around 2.5 lakh tonnes and consumption of 31 lakh tonnes in 1950-51, crude oil production during 1993-1994 was 270.2 lakh tonnes, and the consumption level around 5.2 crore tonnes. India has at present 12 refineries, all in the public sector.
During the year 2008-09, crude oil production has been 33.51 million metric tonnes (MMT) with natural gas at 32.85 billion cubic metre (BCM). Natural gas production in 2009-10 is targeted to be about 52.116 BCM. During the financial year 2008-09, imports of crude oil has been 128.16 MMTvaluedat US$73.97 billion. Imports of crude oil during 2007-08 was 121.67 MMT valued at US$ 58.98 billion. This marked an increase of 5.33 per cent during 2008-09 in quantity terms and increased by 25.37 per cent in value terms.
During the financial year 2008-09, exports of petroleum products in quantity terms is 36.93 MMT value at US $ 25.41 billion marking an increase of 6.02 per cent in value terms compared to 2007-08.
New Exploration Licensing Policy (NELP) provides an international class fiscal and contract framework for Exploration and Production of Hydrocarbons. In the first seven rounds of NELP spanning 2000-2009, Production Sharing Contracts (PSCs) for 203 exploration blocks have been signed. Under NELP, 70 oil and gas discoveries have been made by private/joint venture (JV) companies in 20 blocks.
With a view to accelerate further the pace of exploration, the eighth round of NELP was launched in April 2009. In the eighth round of NELP, 70 exploration blocks comprising of 24 deepwater blocks, 28 shallow water blocks and 18 on land blocks will be offered.
Out of the total production of around 96 MMSCMD, after internal consumption, LPG extraction and unavoidable flaring, around 73 MMSCMC is available for sale to various consumers. In addition, around 7 MMTPA re-gasified LNG (about 23 MMSCMD) is also being supplied to domestic consumers.
Gas produced by ONGC and OIL from the existing nominated blocks sold at administered prices fixed by the Government. As against a total allocation of 150 MMSCMD of gas, actual supply under APM is presently around 53 MMSCMD.
Moreover, in order to reduce heavy dependence on oil, the exploitation of other sources of energy like solar energy, natural gas, nuclear energy, bio-gas etc. should also be given priority.