At Independence, India's domestic oil production was just 250,000 tones per annum. The entire production was from one state-Assam. Most foreign experts had written off India as far as discovery of new petroleum reserves was concerned. The Government announced, under Industrial Policy Resolution, 1954, that petroleum would be the core sector industry.
Petroleum exploration & production was controlled by the Government-owned National Oil Companies (NOCs), ONGC and OIL, in pursuance of the Industrial Policy Resolution, 1954. In the early 70s, they supplied nearly 70% of the domestic requirement. However, by the end of the 80s, they had reached the stage of diminishing returns. Oil production had begun to decline whereas there was a steady increase in consumption and today the two NOCs are able to meet only about 35% of the domestic requirement. This was further compounded by the resource crunch in the beginning of the 90s. The Government had no money (FE) to give to the NOCs for the development of some of the then newly discovered fields. While some of these fields could be developed by ONGC (Gandhar, Neelam, Bombay High, Lakwa, Heera, Geleki etc.), for others there was no money available for indigenously developing the fields. The problem had elements such as the administered oil price, non-availability of appropriate technology, logistics etc.
Petroleum Sector Reforms, 1990
The Government launched the Petroleum Sector Reforms (PSR) in 1990. Till then, three rounds of exploration bidding had been gone through with no success in finding new oil/gas deposits by the foreign companies who only were allowed to bid. Under the PSR, the Fourth, Fifth, Sixth, Seventh and Eighth Rounds of exploration bidding were announced between 1991 and 1994. For the first time Indian companies with or without previous experience in E&P activities were... [continues]
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