DEPARTMENT OF MANAGEMENT STUDIES

MBA 2ND SEMESTER

Current Affairs in Business (MSD 6208) BATCH 2

NAME : SRILEKHA VENKATESH

VIBISHA.R
CLASS : MBA “A” SECTION
DATE : 22 / 06 / 2021
INDUSTRY SECTOR: PETROLEUM INDUSTRY
RRN NUMBER : 200292601061, 200292601065
GROUP NUMBER : 6
CYCLE NUMBER : 1

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 SL. No. PARTICULARS PAGE NO

1. INTRODUCTION 2

2. WHAT IS PETROLEUM INDUSTRY? 3

3. HISTORY 3

4. OIL AND GAS INDUSTRY IN INDIA 5

5. HISTORY OF OIL AND GAS INDUSTRY IN INDIA 5

6. OIL AND GAS IMPORTS 6

7. OIL AND GAS PRODUCTION 6

8. PETROL STATIONS IN INDIA 7

9. FUTURE FORECAST OF PETROLEUM INDUSTRY 10

10. CURRENT STATUS DUE TO PANDEMIC 11

11. REFRENCES 12

TABLE OF CONTENTS

INTRODUCTION
The petroleum industry, also known as the oil industry or the oil patch, includes the global
processes of exploration, extraction, refining, transporting (often by oil tankers and
pipelines), and marketing of petroleum products. The largest volume products of the industry
are fuel oil and gasoline (petrol). Petroleum is also the raw material for many chemical
products, including pharmaceuticals, solvents, fertilizers, pesticides, synthetic fragrances, and
plastics. The extreme monetary value of oil and its products has led to it being known as
“black gold”.
Petroleum is vital to many industries, and is necessary for the maintenance of industrial
civilization in its current configuration, making it a critical concern for many nations. Oil

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accounts for a large percentage of the world’s energy consumption, ranging from a low of
32% for Europe and Asia, to a high of 53% for the Middle East.

WHAT IS PETROLEUM?
Petroleum is naturally occurring liquid found beneath the earth’s surface that can be refined
into fuel. Petroleum is a fossil fuel, meaning that it has been created by the decomposition of
organic matter over millions of years. Petroleum is formed when large quantities of dead
organisms-primarily zooplankton and algae-underneath sedimentary rock are subjected to
intense heat and pressure.
Petroleum is used as fuel to power vehicles, heating units, and machines, as well as being
converted into plastics and other materials. Because the majority of the world relies on
petroleum for many goods and services, the petroleum industry is extremely powerful and is
a major influence on world politics and the global economy.

HISTORY

Oil field in Baku, Azerbaijan

1926

Prehistory

Natural oil spring in Korna,

Slovakia

Petroleum is a naturally occurring liquid found in

rock formations. It consists of a complex mixture
of hydrocarbons of various molecular weights, plus other organic compounds. It is

generaly accepted that oil is formed mostly from the carbon rich remains of ancient plankton
after exposure to heat and pressure in earth’s crust over hundreds of millions of years. Over
time, the decayed residue was covered by layers of mud and silt, sinking further down into
Earth’s crust and preserved there between hot and pressured layers, gradually transforming
into oil reservoirs.

Early history
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Petroleum in an unrefined state has been utilized by humans for over 5000 years. Oil in
general has been used since early human history to keep fires ablaze and in warfare.
Its importance to the world economy however, evolved slowly, with whale oil being used for
lighting in the 19th century and wood and coal used for heating and cooking well into the 20 th
century. Even though the industrial revolution generated an increasing need fr energy, this
was initially met mainly by coal, and from other sources including whale oil. However, when
it was discovered that kerosene could be extracted from crude oil, and used as a lighting and
heating fuel, the demand for petroleum increased greatly, and by the early twentieth century
had become the most valuable commodity traded on world markets.

Modern history
OIL WELLS IN BORYSLAV

GALICIAN OIL WELLS

NIS REFINERY IN SERBY

WORLD CRUDE OIL PRODUCTION FROM WELLS 1930-2012

OIL AND GAS INDUSTRY IN INDIA

The oil and gas industry in India dates back to 1889 when the first oil deposits in the country
were discovered near the town of Digboi in the state of Assam. The natural gas industry in
India began in the 1960s with the discovery of gas fields in Assam and Gujarat. As on 31 st
march 2018, India had estimated crude oil reserves of 594.4 million tonnes and natural gas
reserves of 1339.57 billion cubic meters.

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India imports 82% of its oil needs and aims to bring that down to 67% by 2022 by replacing
it with local exploration, renewable energy and indigenous ethanol fuel. India was the second
top net crude oil importer of 205.3MT in 2019.
By March 2021, India’s domestic crude oil production output fell by 5.2% and natural gas
production by 8.1% in the FY21 as producers extracted 30,491.7 Thousand Metric Tonnes
(TMT) of crude oil and 28670.6 Million Metric Standard Cubic Meters (MMSCM) of natural
gas in the fiscal.

HISTORY OF OIL AND GAS INDUSTRY IN INDIA

The first oil deposits in India were discovered in 1889 near the town of DIGBOI in the state
of ASSAM.

The natural gas industry in India began in the 1960s with the discovery of gas fields in Assam
and Gujarat. Natural gas gained further significance after the discovery of large reserves in
the south basin fields by ONGC in the 1970s.

OIL AND GAS IMPORTS

India is heavily dependent on crude oil and LNG imports with 82.8% import dependence for
crude oil and 45.3% for natural gas/LNG. The net foreign exchange outgo is 63.305 billion
US$ in the financial year 2017-2018 on account of crude oil imports. India generated 35.2
million tons of petroleum products from indigenous crude oil production whereas the
consumption of petroleum products is 204.9 million tons.
India is the second biggest importer of crude oil and its products after china. In the year 2019,
US is going to become net exporter of LNG, LPG, crude oil and its products from its shale oil
production cost in US would be the higher ceiling price for the crude oil in international trade
as its substantial production is consumed internally substituting the imports.
Due to lack of adequate petroleum reserves, India has to depend mostly on crude oil imports
in near future till its renewable energy resources such as solar, wind, hydro and bio-mass are
exploited adequately to achieve energy security by replacing the petroleum products
consumption which are also major contributes to the air pollution.
Also, India and china being major oil importers, both countries should coordinate for mutual
benefit while trading in global oil markets to moderate the crude oil price and nullify the oil
pricing power of OPEC, etc. Normally, crude oil pricing and gold pricing exhibit opposite
trends in global trading (i.e. while one appreciates the other depreciates). India should also
procure crude oil in futures market by hedging gold.

OIL AND GAS INDUSTRY PRODUCTION

India’s domestic crude oil production has steadily decreased in recent years. In 2013-2014,
Indian companies produced 37.8 milion tonnes of crude oil and condensate. That dropped to

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32.2 million tonnes in 2019-2020, a sharp slide of 15 per cent. India produced 35.68MTs of
crude petroleum in 2017-2018. India accounted for 0.92% of world oil production in 2016-
2018. Production of crude petroleum in India had a CAGR of 0.63% between 2008-2009 and
2017-2018. India also produces petroleum products and produced 254.40 MT in 2017-2018, a
growth of 4.46% over the previous year. among petroleum products, high speed diesel oil
accounted for 42.41%, followed by motor gasoline. The production of natural gas was 31.73
billion cubic meters in 2017-2018, growing by 60.86% over the previous year. India
accounted for 0.77% of world natural gas production in 2016-2017. In recent years, the
country has been producing lesser quantities of homegrown crude oil and natural gas.
India has developed 159 rigs and drilled 545 production wells during 2017-2018 which
stands globally fifth but the oil and gas production is not commensurate with the wells
drilled.
India has planned to produce 15 million tons/year of compressed biogas, a carbon neutral
fuel, by 2023. CBG replaces the CNG which is imported in the form of LNG.

PETROL STATIONS IN INDIA

INDIAN OIL PETROL STATION IN

DERABASSI INDIA

ESSAR OIL PETROL STATION IN

KHAMMAM, TELANGANA

India has 60,799 petrol stations as of November

2017. 26,849 of these belong to Indian oil, 14675 to Bharat petroleum and 14,161 to
Hindustan petroleum. IOCL has more petrol stations than both Canada and the UK. The
Punjab state of India has approximately 3,300 petrol stations, and the state of Haryana alone
has more the 2500 petrol stations. Many additional auto LPG and CNG stations have been
planned due to high crude prices.
Reliance Industries Ltd, ESSAR oil, Shell India and ONGC have also opened petrol
stations in India. Shell currently has 88 petrol stations in India.

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As of October 2014 ESSAR has 2,225 petrol stations in India which are supplied with petrol
and diesel from its 280,000 barrels per day refinery in VADINAR, GUJARAT.
INDRAPRASTHA GAS LIMITED has started exclusive CNG fuel stations in India,
particularly in the capital city Delhi. In recent years, state oil marketing companies have
started rural petrol stations which are established in the interior villages, meant to help
farmers and constructed with minimal investment. These stations sell pesticides, seeds,
lanterns, and other goods that are needed by farmers besides petrol and diesel.

The details of the petrol stations owned by various companies in different states of India as of
31 March 2016 are

T
I H B Others RI
Oil o
O P P L/ESSAR
Company t
C C C Oil/Shell/
/State/UT a
L L L ONGC
l

Lakshadwee
0 0 0 0 0
p

Andaman &
10 0 0 0 10
Nicobar

Dadra &
Nagar 11 11 4 5 31
Haveli

Daman &
11 10 7 3 31
Diu

Mizoram 30 3 2 1 36

Chandigarh 20 11 10 0 41

Sikkim 16 7 23 1 47

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 T
I H B Others RI
Oil o
O P P L/ESSAR
Company t
C C C Oil/Shell/
/State/UT a
L L L ONGC
l

Tripura 62 0 2 3 67

Nagaland 45 3 9 12 69

Arunachal
48 0 7 16 71
Pradesh

Manipur 69 0 12 4 85

Goa 31 36 47 0 114

Puducherry 79 39 32 6 156

Meghalaya 116 23 39 12 190

Delhi 189 97 107 0 393

Himachal
218 109 62 7 396
Pradesh

Jammu &
221 130 134 0 485
Kashmir

Uttarakhand 242 166 114 29 551

Assam 503 91 129 65 788

110
Chhattisgarh 481 329 275 23
8

115
Jharkhand 496 265 319 71
1

8
 T
I H B Others RI
Oil o
O P P L/ESSAR
Company t
C C C Oil/Shell/
/State/UT a
L L L ONGC
l

156
Odisha 748 314 414 84
0

200
Kerala 885 587 457 80
9

222
Telangana 911 644 565 108
8

111 224
West Bengal 488 563 74
9 4

135 251
Bihar 475 610 75
1 1

133 253
Haryana 666 385 151
4 6

Andhra 119 305

929 720 210
Pradesh 9 0

Madhya 129 326

814 917 243
Pradesh 5 9

168 331
Punjab 878 610 143
5 6

127 338
Gujarat 738 771 601
4 4

163 373
Rajasthan 977 819 310
0 6

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 T
I H B Others RI
Oil o
O P P L/ESSAR
Company t
C C C Oil/Shell/
/State/UT a
L L L ONGC
l

180 383
Karnataka 888 966 179
3 6

199 115 131 470

Tamil Nadu 236
1 8 7 2

184 154 167 541

Maharashtra 353
6 2 8 9

Uttar 339 137 131 661

535
Pradesh 4 4 3 6

253 138 134 561

Grand Total 3586
63 02 39 90

FUTURE FORECAST OF PETROLEUM INDUSTRY IN INDIA

 The Indian oil and gas market is expected to record a CAGR of over 2.64% during the
forecast period, 2020-2025.

 The pipeline market in the country has grown significantly with pipeline increasing in
all the sectors. Total pipeline length at 43807 km, in 2018, registered a growth of 3%
as against 42541 km, in 2017.

CURRENT STATUS DUE TO PANDEMIC

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  Lower crude oil prices and consumption have provided an opportunity to build
strategic reserves.
 Consumers were not benefited from lower crude oil prices due to upward revision of
indirect taxes on MS and HSD by central and state governments.

 Due to COVID-19 multiple scenarios have evolved based on efficacy of health care
response and speed of government policy and support. In general, falling oil prices
due to oversupply and demand contraction has adversely affected the refining
throughputs and therefore GRM’S are under stress, this will have an impact on new/
on-going capex programmers and financial standing of companies are likely to be
under some stress.

REFERENCES
1. https://www.ibef.org/industry/oil-gas-india.aspx%7D

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2. https://en.wikipedia.org/wiki/Oil_and_gas_industry_in_India

3. https://www.investindia.gov.in/sector/oil-gas

4. https://www.mordorintelligence.com/industry-reports/india-oil-and-
gas-market

5. https://www.ibef.org/industry/oil-gas-india.aspx#:~:text=As%20of
%20December%2001%2C%202020,India%20stood%20at
%2032.2%20MMT.

6. https://en.wikipedia.org/wiki/Petroleum_industry

7. https://www.sciencedirect.com/topics/earth-and-planetary-
sciences/petroleum-industry

8. https://www.sciencedirect.com/topics/earth-and-planetary-
sciences/petroleum-industry

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