India’s Crude Oil Production In May ’22 Up 4.6 Per Cent Y-O-Y, 2.4 Per Cent Higher Than Target

Crude oil production in India rose to 2.6 million tonnes (MT) in May 2022, which is a year-on-year increase of 4.6 per cent and 2.4 per cent higher than the target for the month.

The monthly production report for May 2022 of the Ministry of Petroleum and Natural Gas on Friday (17 June) also showed cumulative crude oil production during April-May 2022 growing 2.86 per cent y-o-y to 5019.72 TMT and 1.79 per cent higher than the target for the period as Indian companies improved their output of crude oil during May 2022 and over the first two months of the fiscal 2022-23.

Crude oil production by Navratna public sector undertaking Oil and Natural Gas Corporation in nomination block during May 2022 improved to 1693.69 TMT, which is 5.09 per cent higher than target of the month and 9.01 per cent higher when compared with production of May 2021.

Cumulatively though, ONGC’s crude oil production during April-May, 2022 was 3344.34 TMT, which is 5.01 per cent lower than the target for the period and 4.83 per cent lower than the production during the corresponding period of 2021, according to official data.

Less than planned contribution from workover wells and drilling wells as well as less than planned output due to local disturbance and miscreants activities in main producing area (MPA) dragged down production are some key factors in lower oil output as in the case of the other upstream major Oil India.

The company saw crude oil production in the nomination block dip during May 2022 at 265.23 TMT, which is 4.01 per cent lower than the target of the month but 4.80 per cent higher when compared with production of May, 2021. Cumulative crude oil production by OIL during April-May 2022 was 516.68 TMT, which is 2.47 per cent lower than target for the period but 4.21 per cent higher when compared to production during the corresponding period of last year.

Private and joint venture companies in the Production Sharing Contract/Revenue Sharing Contract regime have not fared well either in May 2022 with low consumer demand and delay in commencement of production from development wells lowering output.

Crude oil production was at 591.14 TMT, which is a 1.69 per cent drop from the target of the reporting month and 6.36 per cent lower than the month production of May 2021. Cumulative crude oil production by these companies during April-May 2022 was 1158.70 TMT, which is 0.58 per cent and 6.95 per cent lower than the target for the period and production during corresponding period of last year respectively.

Crude oil production remains lacklustre even as India continues with a high oil import bill amid surging global crude oil prices triggered by geopolitical tensions and inadequate production at home.

According to Crisil Ratings, ‘the price of Brent crude oil surged 6.2 per cent on-month to average at $112.4 per barrel in May 2022’, as India, the world’s third biggest oil consuming and importing nation, paid out $119.2 billion in the financial year 2021-22, double from the $62.2 import bill in the previous fiscal, according to official figures.

Slow progress in oil and gas exploration has bogged down domestic crude oil production since the financial year 2014-15, with the output dropping to just 28.4 million tonnes in FY22, the lowest since FY94.

This has been despite the government approving major reforms to enhance exploration activities and six bidding rounds which have so far been finalised with 105 exploration blocks being awarded covering an area of approximately 1,56,579 sq. km. However, OALP Bid Round-VI, offering 21 blocks covering an area of approximately 35,346 sq. km attracted just three bidders with ONGC winning 18 out of the 21 areas awarded in May 2022.

Notwithstanding shortfalls in domestic production, official data shows an uptick in processing of crude oil by Indian refiners which was 4.96 per cent more than the target during May 2022 at 22643.91 TMT and 19.34 per cent more than in May 2021.

Cumulatively, crude processed during April-May 2022 was 44223.52 TMT, which is 3.81 per cent higher than the target for the period and 13.81 per cent more than the processing carried out in the corresponding period of the last year.

Government owned refineries of the Central Public Sector Enterprises processed 14136.02 TMT of crude oil during May 2022 which is 5.61 per cent higher than the target for the month and 32.56 per cent higher than the production of May 2021.

Cumulative crude throughput during April-May 2022 was 27864.88 TMT which is 3.94 per cent and 22.02 per cent higher than target for the period and production during corresponding period of last year respectively.

Private and JVs refineries processed 8507.88 TMT of crude during May 2022, 3.91 per cent higher than the target for the month and 2.38 per cent higher than the production of May 2021.

Cumulative crude throughput during April-May 2022 was 16358.64 TMT, which is 3.58 per cent and 2.10 per cent higher than target for the period and production during corresponding period of last year respectively.

Consequently, production of petroleum products during May 2021 was 23250 TMT, which is 4.36 per cent higher target for the month and 16.65 per cent higher than the production of May 2021.

Cumulative production during April-May, 2022 was 46061.39 TMT, which is 4.90 per cent and 12.83 per cent higher than target for the period and production during corresponding period of last year respectively.

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