Market study on Petroleum Industry in India

Topics: Petroleum, Petroleum industry, Oil and gas companies of India Pages: 5 (1574 words) Published: October 16, 2013
A brief History
The first oil deposits in India were found in Digboi, Assam in 1889. That is when India’s journey in the Petroleum Industry began. Post Independence, Oil India Limited was formed which was a joint venture involving the Indian Government and the British owned Burmah Oil Company (presently known as BP) whilst the Indo-Stanvac Petroleum Project in West Bengal was between the Indian Company and the American Company SOCONY-Vacuum (presently known as Exxon Mobil). This changed in 1956 when the government adopted an industrial policy that placed oil as a “Schedule A Industry” and put its future development in the hands of the state. In October 1959 an Act of Parliament was passed which gave the state owned Oil and Natural Gas Commission (ONGC) the powers to plan, organize, and implement programs for the development of oil resources and the sale of petroleum products and also to perform plans sent down from central government. Usages of Petroleum

Petroleum is mostly used as Fuel. Several other hydrocarbon chemicals can be distilled out of petrol which again can be used for a variety of purposes. Some of petrol’s end products are- Alkenes (olefins) which can be manufactured into plastics or other compounds Lubricants (produces light machine oils, motor oils, and greases, adding viscosity stabilizers as required). Wax, used in the packaging of frozen foods, among others.

Sulfur or Sulfuric acid. These are useful industrial materials. Sulfuric acid is usually prepared as the acid precursor Oleum, a byproduct of sulfur removal from fuels. Bulk tar.
Petroleum coke, used in specialty carbon products or as solid fuel. Paraffin wax
Aromatic petrochemicals to be used as precursors in other chemical production. Evolution of Petroleum Industry in India
In pursuance of the Industrial Policy Resolution, 1954, petroleum exploration & production activity was controlled by the government-owned National Oil Companies (NOCs), namely Oil & Natural Gas Corporation (ONGC) and Oil India Private Ltd (OIL). With the discovery of the Cambay onshore basin (in 1958) and the Bombay offshore basin (in 1974), the domestic oil production increased considerably. As a result, in the early 70s, almost 70% of the country’s oil requirement was met domestically. However, by the end of the 1980s, some of the existing oil & gas fields were experiencing a decline in their production since they had already been in production for several years and were past their 3 plateau phase. At the same time, there was a steady increase in consumption of oil & gas, leading the two NOCs to meet only about 35% of the domestic oil requirement. After the Oil Shock of 1973, the nationalisation of both the upstream & downstream sectors was initiated and was completed on October 14, 1981. This resulted into the exit of the international oil companies from the Indian oil & gas industry. Moreover, the resource crunch in the beginning of the 1990s that held up the NOCs from developing some of the then newly discovered oil & gas fields (such as Gandhar, Heera Phase-II & III, Neelam, Ravva, Panna, Mukta, Tapti, Lakwa Phase-II, Geleki and Bombay High Final Development scheme), had adversely impacted domestic oil production. Apart from this, controls were imposed by the Government on the pricing and distribution of crude oil and petroleum products in India. Factors like the administered oil prices and non-availability of appropriate technology logistics augmented the problem. Up to 1990s, there were three rounds of exploration bidding with no success in finding new oil/gas deposits by the foreign companies who only were allowed to participate in the bidding process. This led the government to initiate Petroleum Sector Reforms (PSR) in 1990, under which the fourth, fifth, sixth, seventh and eighth rounds of exploration bidding were announced during 1991-94. For the first time, Indian companies with or without prior experience in exploration & production activities...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Market Study – Elevator Industry
  • Market Study of Shampoos in India Essay
  • noodles industry in india with market share Essay
  • Oil and Gas Industry in India Essay
  • Introduction to the Petroleum Industry Essay
  • Essay on LV and MV Switchgear Market in India
  • Market Study Beauty Care Industry Essay
  • Market Analysis China Steel Industry Essay

Become a StudyMode Member

Sign Up - It's Free