Oil & Natural Gas

The oil industry in India is divided into three broad segments: (i) oil exploration and production; (ii) refinery and marketing; and (iii) petrochemical and downstream units.

Exploration and Production

Oil exploration and production started in India in an extensive and systematic way after the setting up of Oil and Natural Gas Commission (ONGC) in 1956. With the acquisition of shares of Burma Oil Company by the Government, in 1981, Oil India Limited (OIL) become the second public sector undertaking engaged in oil exploration and production.

In India, oil and gas are excavated from both on-shore and off-shore wells. On-shore wells are mainly located at Gujarat, Assam, Arunachal Pradesh, Tripura and Tamil Nadu. Bombay High is the main off-shore well. Off-shore exploration is continuing in the Mahanadi and Cauvery basins.

Refining

At present there are nineteen refineries in the country in the public sector and private sector.

  • Indian Oil Corporation operates refineries at Guwahati, Barauni, Koyali, Haldia, Mathura, Digboi and Panipat.
  • Hindustan Petroleum Corporation Ltd has refineries at Mumbai and Vishakhapatnam.
  • Bharat Petroleum Corporation (BPCL) has a refinery in Mumbai.
  • Hindustan Petroleum Corporation (HPCL) has refineries at Mumbai and Vishakhapatnam.
  • Chennai Petrochemicals Limited (CPCL) has a refinery at Chennai.
  • Besides, there is one refinery at Kochi, one at Bongaigaon (Assam), one at Numahgarh (Assam), one at Mangalore and one at Nagippattinam (Tamil Nadu).

Reliance Industries has set-up the first private sector refinery at Jamnagar, Gujarat.

Indian Oil Corporation: The Indian Oil Corporation Ltd (IOC) was set up in September 1964 by amalgamating the Indian Refineries Ltd (estd in 1958) with the Indian Oil Company Ltd (estd in 1959).

Bharat Petroleum Corporation Ltd: Following the acquisition of the two Burmah Shell Companies, by the government, in January 1976, the name of Burmah Shell Refineries Ltd was changed to Bharat Refineries from 12 February 1976. Being an integrated refining and marketing company, the name was changed to Bharat Petroleum Corporation Ltd with effect from 1 August 1977.

A new oil refinery is being set up by Bharat Petroleum Corporation Limited at Bina in Madhya Pradesh.

Hindustan Petroleum Corporation: HPCL was set up on 15 July 1974 by acquiring the assets in India of ESSO Eastern Inc, USA. On 31 December 1976 government acquired Caltex Oil Refining (India) Ltd and merged it with HPCL.

IBP Company Ltd and Lubrizol India Ltd: are the two Corporations which, besides refining and marketing oil, are involved with Engineering and Chemical production related to oil exploration.

NATURAL GAS

Natural gas is emerging as an important source in India’s commercial energy scene. Large reserves of gas have been established particularly in South Bassein off West Coast of India. As on 1 January 1987 India had gas reserves of 541 billion cubic metres.

Gas Authority of India Ltd: In view of growing importance of natural gas in the country Gas Authority of India Ltd (GAIL) was established on 16 August 1984. It is a wholly owned Government of India undertaking. The main objectives of the company are: processing, marketing, transportation and distribution of natural gas. The HBJ gas pipeline project has been implemented by GAIL.

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