INDIA MAPS $6 BILLION PLAN TO BOOST OIL OUTPUT

India has drawn up an ambitious $6 billion plan to boost its oil production capacity by more than 40% to almost 1 million b/d by 1995. Under its eighth 5 year plan covering fiscal 1991-95, India hopes to hike crude productive capacity to 977,400 b/d by 1994-95 from 692,000 b/d in 1989-90. The country still will fall short of oil self-sufficiency, however. Government estimates place demand for petroleum products at 1.55 million b/d in 1994-95, up from 1.18 million b/d in 1989-90.

Feb. 11, 1991

3 min read

India has drawn up an ambitious $6 billion plan to boost its oil production capacity by more than 40% to almost 1 million b/d by 1995.

Under its eighth 5 year plan covering fiscal 1991-95, India hopes to hike crude productive capacity to 977,400 b/d by 1994-95 from 692,000 b/d in 1989-90.

The country still will fall short of oil self-sufficiency, however. Government estimates place demand for petroleum products at 1.55 million b/d in 1994-95, up from 1.18 million b/d in 1989-90.

At the same time, India's refining capacity expansions will continue to lag products demand growth, falling short by 260,000 b/d in 1994-95 (see story this page).

INDIA HIKES IMPORTS

Meantime, India stepped up its imports of crude in January ahead of the outbreak of hostilities in the Persian Gulf.

India hiked crude imports to about 424,000 b/d, compared with about 353,000 b/d programmed earlier. That has enabled the country to post a record stock build of 16.79 million bbl.

Of the total 420,000 b/d of crude imports for 1990-91, 85% is under term contract. India does not expect war in the Persian Gulf to disrupt supplies from the U.S.S.R. and Malaysia.

Increases in liftings compared with contract volumes break out as Saudi Arabia 100,000 b/d vs. 60,000 b/d, Iran 50,000 b/d vs. 30,000 b/d, and Malaysia 20,000 b/d vs. 10,000 b/d. Abu Dhabi also hiked its exports to India, but volumes weren't disclosed. At last report, Indian officials were in Venezuela trying to conclude a deal for crude supplies on credit.

PRODUCTION ESTIMATES

Overall, India estimates it will produce 1.453 billion bbl of crude during the eighth plan, up from 1.15 billion bbl produced during the seventh plan.

State owned Oil & Natural Gas Commission (ONGC) is expected to account for 1.343 billion bbl of that 5 year production target, with state owned Oil India Ltd. (OIL) producing the remainder.

For fiscal 1990-91, ONGC is expected to produce only 616,000 b/d vs. its target of 660,000 b/d.

With OIL production remaining steady, that will put total Indian production at 673,000 b/d in fiscal 1990-91, down from 692,000 b/d in fiscal 1989-90.

DEVELOPMENT PLANS

What's required to meet the ambitious eighth plan target in light of currently slipping crude production, say Indian industry officials, is quick approval of major development projects.

Petroleum ministry officials say the projects have been cleared by the cabinet committee on economic affairs but remain stalled for lack of detailed investment clearances by the government.

Projects covered by the $6 billion outlay include development of Neelam field for $1.975 billion, Mukta field for $930 million, and Panna field for $600 million.

Development of the L-II and L-III structures in the Bombay High offshore area would cost a combined $2.3 billion.