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 Largest exporter of petroleum products in Asia

PETROLEUM AND NATURAL GAS

The oil and gas industry is one of the core industries of India and has a significant hold on the Indian economy. The energy market in the country has witnessed an increase in its growth over the years and is still booming.

  • 100% FDI is allowed in exploration activities of oil and natural gas fields under the automatic route and;
  • 49% FDI is allowed in petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs under the automatic route.

The petroleum industry in India is favourable for foreign investment due to its growth potential. This potential for growth can be further explored by foreign investors, therefore, turning into an opportunity.

Industry Scenario

India has emerged as a refinery hub. India's current refining capacity stands at 230.1 MMPTA, comprising of 23 refineries. Indian Oil Corporation (IOC) emerged as the largest domestic refiner with a capacity of 69.2 MMTPA. Top three companies - RIL, IOC and BPCL - contribute around 65.5% of India's total refining capacity while HPCL & CPCL contributes 6.7% & 5.1% respectively.

Consumption of petroleum products in India stood at 184.7 MMT in FY15-16, 194.6 MMT in FY16-17 and 98.6 MMT in 2017 (April to September). Moreover, during FY17, the production of petroleum products by fractionators was 3,458 ('000) MT. The production of crude oil was 36.9 MMT during FY15-16 which is expected to reach 37.08 MMT in FY16-17. The production of petroleum products was 231.9 MMT during FY15-16 which is expected to reach 238.07 during FY16-17.

Highlights

  • 1
    Largest exporter of petroleum products in Asia
  • 2
    Second largest refiner in Asia
  • 3
    Third largest consumer of crude oil and petroleum products in the world

HIGHLIGHTS

RECENT INVESTMENTS

1. October 2017 - India is likely to attract investments worth over USD 40 bn in the next five years in the oil and gas sector alone as several global oil companies like Saudi Aramco, BP Plc., Vedanta Resources and Total of France have shown interest in investing in world's fastest growing market

2. July 2017 - Royal Dutch Shell Plc, which has already invested USD 1 bn in India, has planned further investments in upstream and downstream segments of oil and gas sector, and is also doubling its employee base at its Shell Technology Centre Bangalore (STCB)

3. August 2016 - Norwegian chemical company Yara International ASA has entered into an agreement to acquire the Tata Chemicals Ltd’s Babrala urea plant and distribution business in Uttar Pradesh for USD 400 mn on a debt and cash free basis, including normalised net working capital.

4. January 2016 - Petrogas Pvt Ltd, a joint venture of Isomeric Holdings bhd of Malaysia and LEPL Venture Pvt Ltd of India, will collaborate with Krishnapatnam Port Co Ltd and the Government of Andhra Pradesh, to set up a Liquefied Natural Gas (LNG) regasification and floating storage terminal at Krishnapatnam Port in Nellore district with an investment of around USD 447.3 mn.

FDI Facts

6.9bn FDI in petroleum & natural gas

2% FDI share w.r.t. total FDI received in India

49% FDI allowed under automatic route in Petroleum refining by PSU, without disinvestment of dilution of domestic equity in existing PSUs

100% FDI is allowed in exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, marketing of natural gas and petroleum products, petroleum product pipelines, natural gas/pipelines, LNG Regasification infrastructure, market study and formulation and Petroleum refining in the private sector, under automatic route