Perhaps influenced by recent dramatic events, such as the collapse of the oil price to below zero dollars, India scaled back its fossil fuel production. Last month, oil production reached 2.7 million tonnes, while gas production hit 2.4 billion standard cubic metres, figures that are 5.5% and 8.64% lower respectively than last year’s numbers.
Furthermore, the oil production figure is 13.79% lower than the country’s target for the period, and the country’s refinery output, reflecting crude oil processing, rather than extraction, was 5.74% lower than in March 2019.
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The news is the latest to reflect struggles in the Indian oil production sector, which saw crude oil production reach an 18-year low earlier this month. The county produced 32.17 million tonnes of oil in 2019-2020, 6% lower than the previous year, as doctors’ advice to remain indoors and avoid gatherings with other people proved all but incompatible with conventional working practices in the oil and gas industry.
This is particularly concerning for India, which has made ambitious plans to reduce its reliance on foreign imports of oil and gas, and reduce its energy dependency. In 2013-14, India’s oil import dependence was 77%, and despite plans to reduce this figure by 10% by 2022, figures published last year show that India’s oil import dependence had actually increased, to a high of 84%.
The decline in production follows an emergency meeting, attended by energy ministers from across G20 member states, which saw India push for a market-driven approach to recovery.
“The G20 Energy Ministers’ [meeting] focused on ways and means to ensure stable energy markets, which are affected due to demand reduction as result of the Covid-19 pandemic and the ongoing surplus production-related matters,” announced the Indian ministry of petroleum and natural gas. “During the meeting, [energy minister] Shri Pradhan reiterated Prime Minister Shri Narendra Modi’s call for the G20 taking a human-centric approach for overcoming challenging hardships, especially for the vulnerable.
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By GlobalData“He appreciated the collective efforts of OPEC and OPEC-plus countries to balance the supply-side factors, which is imperative for long-term sustainability. He has, however, urged that oil prices should be targeted to affordable levels to allow for a consumption-led demand recovery.”
Uncertainty remains rife in the oil and gas sector; earlier this month, OPEC and OPEC-plus announced plans to cut oil production by 9.7 million barrels per day from the beginning of May, highlighting the dramatic changes that have swept the sector.
