Lok Sabha Question No. 3042 (UNSTARRED), answered on 2021-03-15
Subject: Low Demand of Domestic Petroleum Products
Ministry: PETROLEUM AND NATURAL GAS
Asked by: S. Gnanathiraviam, Sougata Ray

## LOK SABHA UNSTARRED QUESTION NO. 3042 TO BE ANSWERED ON 15 th  March 2021

## Low Demand of Domestic Petroleum Products

## 3042. SHRI GNANATHIRAVIAM S.: PROF. SAUGATA RAY:

## पेोलयम और ाक ृ तक गैस मंी

## Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) the  details  of  crude  oil  production  in  the  country  since  the  last  three  years  and whether the crude oil production has declined in the above period and if so, the reasons therefor;
- (b) whether it is also true that many refineries in the country were not running to their capacity  for  the  last  several  months  and  if  so,  the  details  thereof  and  reasons therefor;
- (c) whether one of the reasons for the reduction in the production of crude oil and the slowdown in the refineries was because of the low demand for petroleum products and if so, the details thereof; and
- (d) the steps to be taken to increase the crude oil production?

## ANSWER

## पेोलयमएवंाक ृ तकगैसमंी ( ीधमधान ) MINISTER OF PETROLEUM AND NATURAL GAS

## (SHRI DHARMENDRA PRADHAN)

(a) The year wise details of the crude oil production in the country during the last three years is given below:

| Years                            |   2017-18 |   2018-19 |   2019-20 |   2020-21 (P) |
|----------------------------------|-----------|-----------|-----------|---------------|
| Production of Crude Oil (in MMT) |      35.7 |      34.2 |      32.2 |          25.6 |

P = Provisional

Natural  decline  in  all  aging  fields  and  increase  in  water-cut  in  major  oil  producing fields are the main reasons for decline in oil production.

(b) & (c) During April-January, 2020-21, Crude oil processing is 182.2 MMT i.e. 73% of  total  crude  oil  processing  capacity  (249.87  MMT).During  2020-21,  the  capacity utilisation of Indian refineries are lower due to lower demand on account of Covid-19 pandemic.

(d)  The policy initiatives taken by the Government to reduce import dependency and increase domestic production of oil and gas include: -

- I. Policy for Relaxations, Extensions and Clarifications under Production Sharing Contract (PSC) regime for early monetization of hydrocarbon discoveries
- II. Discovered Small Field Policy
- III. Hydrocarbon Exploration and Licensing Policy
- IV. Policy for Extension of Production Sharing Contracts
- V. Policy for early monetization of Coal Bed Methane
- VI. Setting up of National Data Repository
- VII. Appraisal of Unappraised areas in Sedimentary Basins.
- VIII. Re-assessment of Hydrocarbon Resources.
- IX. Policy framework to streamline the working of Production Sharing Contracts in Pre-NELP and NELP Blocks
- X. Policy  to  Promote  and  Incentivize  Enhanced  Recovery  Methods  for  Oil  and Gas
- XI. Policy framework for exploration and exploitation of Unconventional Hydrocarbons under existing Production Sharing Contracts, Coal Bed Methane contracts and Nomination fields.

Further,  the  Government  in  February,  2019  approved  major  reforms  in  exploration and  licensing  policy  to  enhance  exploration  activities,  attract  domestic  and  foreign investment  in  unexplored/unallocated  areas  of  sedimentary  basins  and  accelerate domestic production of oil and gas from existing fields. The policy reforms inter alia aims  to  boost  exploration  activities  with  greater  weightage  to  work  programme, simplified fiscal and contractual terms, bidding of exploration blocks under Category II and  III  sedimentary  basins  without  production  or  revenue  sharing  to  Government, early  monetization  of  discoveries  by  extending  fiscal  incentives,  incentivizing  and more functional  freedom  to  National  Oil  Companies  for  collaboration  for  production enhancement methods in nomination fields.

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