India’s natural gas production falls 14% in March as demand dries up, 2019-2020 production lowest in 18 years
According to a report by the oil ministry natural gas production by Indian E&P players had been impacted in March on account of decreased production in response to less off take by consumers
New Delhi: The ongoing Covid-19 pandemic has dented the demand of petroleum products in India and also reduced the demand for natural gas, forcing Exploration and Production (E&P) companies to scale down production in March 2020, fresh data sourced from the Petroleum Ministry showed.
India’s production of natural gas in March declined 14 per cent to 2,411 Million Standard Cubic Meter (MMSCM), as compared to the corresponding month a year ago.
According to a report by the oil ministry natural gas production by Indian E&P players had been impacted in March on account of decreased production in response to less off take by gas power plants, fertilizer plants, industrial customers as well as operational issues faced by E&P companies.
The country’s natural gas production during 2019-2020 declined 5 per cent to 31,180 MMSCM, the lowest recorded output in at least 18 years, an analysis of historic data by ETEnergyWorld showed.
India’s natural gas production falls 14% in March as demand dries up, 2019-2020 production lowest in 18 years
The record low production of natural gas comes at a time the country’s crude oil production is also at a multi-year low. ETEnergyWorld had last week reported how India’s crude oil production fell to its lowest level in at least 18 years in financial year 2019-2020.
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At least one analyst attributed the declining production to the long gap in auctioning of oil and gas fields in the pre-Hydrocarbon Exploration Licensing Policy (HELP) regime.
“Before HELP and DSF rounds, there was no action on licensing for Exploration and Production (E&P) for almost for nine years. The impact of this gap is now being felt in terms of falling production,” Debasish Mishra, Partner, Lead-Energy, Resources and Industrials at Deloitte India told ETEnergyWorld.
A former chairman of a large Indian oil producer requesting anonymity had said that overall oil and gas production during 2019-2020 had been impacted due to a host of other issues besides Covid-19 including, protests against privatisation of Bharat Petroleum, protests against Citizen Amendment Bill, maintenance and up gradation activities in Cairn Oil and Gas’ fields.
ONGC
Production by Oil and Natural Gas Corporation (ONGC), the country’s largest E&P company, in March declined 11 per cent to 1,906 MMSCM, as compared to the corresponding month a year ago.
Also, cumulative production during financial year 2019-2020 declined 4 per cent to 23,746 MMSCM, as compared to the year ago period.
According to the petroleum ministry, the fall in production during March can be attributed to closure of gas wells in offshore fields due to less off take by GAIL and GSPC, less production due to less gas offtake by ONGC Tripura Power Company (OTPC) and gas consumers in Cauvery, Rajahmundry and Jodhpur asset.
Other reasons included less gas production from Vasistha wells, non-realization of gas production planned from WO-16 cluster and less than planned gas production from Bassein field, Daman Tapti Block and marginal fields.
Oil India
Oil India, the country’s second government-owned oil and producer, posted a 10 per cent decline in gas production at 212 MMSCM in March 2020, as compared to the corresponding month a year ago.
Cumulative natural gas production during financial year 2019-2020 declined two per cent to 2,668 MMSCM, as compared to the year ago period.
According to the ministry, lower production during the month was attributed to decline in production potential of gas wells consequent to shut-in during protest and bandhs, controlled production because of low market demand from the tea sector during lockdown due to Covid-19, shut-down of Brahmaputra Valley Fertilizer Corporation, low off-take from Numaligarh Refinery besides other reasons.