Question : Low Demand of Domestic Petroleum Products

(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?

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.
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(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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