India
is not only the fourth largest economy in the world, but has also emerged as the
third largest oil consumer in Asia. This has been putting immense pressure on
India to reduce its crude oil imports, which amount to 70% of the total oil and
gas consumption. According to the World Energy Outlook, India's crude import dependency
is projected to rise up to 94% in 2030 provided the current trend continues.
It
is an undisputable fact that along with the increasing globalization, India's
vulnerability to international oil price aberrations is also escalating. Spiraling
oil prices are pushing Indian oil companies to discover ways of reducing their
dependency on crude oil imports. Hence, Indian oil companies are gearing up themselves
to meet the ever-increasing demand for oil by boosting the domestic exploration
and production efforts as well as acquiring oil fields overseas.
The
size of the Indian oil and gas industry is currently estimated to be $110 bn which
contributes to about 45% of India's energy consumption. The industry solely contributes
up to 64% of the government's gross revenues in the form of taxes and duties.
The entire value chain in the oil and gas industry usually has a three stage processExploration,
Refining and Marketing. While upstream companies like ONGC and OIL are involved
in oil and gas exploration, downstream companies like IOC, HPCL, BPCL and Reliance
are involved in refining and marketing.
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