S.

NO Industrial Analysis (individual) PAGE NO

INDEX
1. Introduction 02-03

2. Objective of industry Analysis 04

05-07
3. History of the industry in India

08-10
4. Indian Oil & Gas Industry present status

5. Major players and market share

11

6. Opportunities
12

7. Recent trends 13

8. Swot analysis 14-16

9. conclusion 17

1
 OIL & GAS INDUSTRY IN INDIA
INTRODUCTION
The oil and gas sector is among the eight core industries in India and plays a major role in
influencing the decision-making for all the other important sections of the economy.

India’s economic growth is closely related to its energy demand, therefore, the need for oil and
gas is projected to increase, thereby making the sector quite conducive for investment. India
retained its spot as the third-largest consumer of oil in the world as of 2023.

The Government has adopted several policies to fulfil the increasing demand. It has allowed
100% foreign direct investment (FDI) in many segments of the sector, including natural gas,
petroleum products and refineries, among others. The FDI limit for public sector refining
projects has been raised to 49% without any disinvestment or dilution of domestic equity in
existing PSUs. Today, it attracts both domestic and foreign investment, as attested by the
presence of companies such as Reliance Industries Ltd (RIL) and Cairn India. The industry is
expected to attract US$ 25 billion investment in exploration and production. India is already a
refining hub with 23 refineries, and expansion is planned for tapping foreign investment in
export-oriented infrastructure, including product pipelines and export terminals.

India’s crude oil production stood at 19.88 MMT during April-January 2025.

2
Reliance Industries Limited (RIL)

Reliance Industries Limited is engaged in refining, including manufacturing of refined

petroleum products, and petrochemicals, including manufacturing of basic chemicals,
fertilizers and nitrogen compounds, plastic, and synthetic rubber in primary forms. The
company's segments include refining, petrochemicals, oil and gas, organized retail, and others.

Oil and Natural Gas Corporation (ONGC)

ONGC, a Maharatna company, is the biggest crude oil and natural gas name in India,
contributing around 75% to Indian domestic production. The company ranks 11th among global
energy majors (Platts). It is the only public sector Indian company to feature in Fortune’s ‘Most
Admired Energy Companies’ list. The company ranks 229 overall in Forbes Global 2000 list
for 2022. Acclaimed for its Corporate Governance practices, Transparency International has
ranked ONGC 26th among the biggest publicly traded global giants.

3
OBJECTIVES

The primary objectives of the Indian Oil & Gas industry revolve around ensuring energy
security, promoting economic growth, and moving towards a sustainable energy future. Key
objectives include:

• Meeting Rising Energy Demand: India's burgeoning population and expanding

economy are driving a significant increase in energy consumption. The industry aims
to meet this escalating demand for petroleum products and natural gas.

• Enhancing Domestic Production: Reducing reliance on imports by boosting domestic

crude oil and natural gas exploration and production. This involves encouraging private
and foreign investment through favorable policies like HELP and OALP.

• Augmenting Refining Capacity: Expanding and modernizing existing refineries and

establishing new ones to cater to both domestic consumption and export markets. India
is already the 4th largest refiner globally and aims to reach 310 MMTPA by 2030.

• Expanding Gas Infrastructure: Increasing the share of natural gas in the energy mix
from 6.7% to 15% by 2030. This involves significant expansion of the City Gas
Distribution (CGD) network and the national gas grid.

• Promoting Cleaner Fuels and Energy Transition: Investing in biofuels (ethanol

blending, CBG), green hydrogen, and electric vehicle (EV) charging infrastructure to
reduce emissions and align with global climate commitments.

• Ensuring Supply Chain Efficiency and Security: Maintaining continuous and

smooth supplies of petroleum products through robust transportation and storage
infrastructure, including strategic petroleum reserves.

• Fostering Research & Development: Developing new technologies for cleaner fuels,
enhanced oil recovery, process improvement, and alternative energy sources.

4
HISTORY
India, the world’s fourth largest crude oil refiner, is expected to add one million barrels per day
(mb/d) of refining capacity by 2028.

According to the International Energy Agency (IEA), India’s medium-term outlook for natural
gas consumption remains solid due to rising infrastructure and supportive environment
policies. Industrial consumers are expected to account for 40% of India’s net demand growth.
The demand is also expected to be driven by sectors such as residential, transport and energy.

As per data released by Department for Promotion of Industry and Internal Trade (DPIIT), FDI
inflows in India’s petroleum and natural gas sector stood at Rs. 43,760.75 (US$ 8.19 billion)
between April 2000-September 2024.

The Union Budget 2025-26 has allocated Rs. 5,597 crore (US$ 640.46 million) to the petroleum
and natural gas (PNG) ministry for phase II of the Indian Strategic Petroleum Reserves Ltd
(ISPRL) project, aimed at turning two vast underground caverns into petroleum storage
facilities.

There have been multiple partnerships in the sector. Bharat Petroleum Corporation Ltd. (BPCL)
and Microsoft have established a strategic cloud partnership targeted at speeding up the
company's digital transformation and influencing the oil and gas industry's future innovation.
India and the US have also agreed to expand their energy collaboration by focusing on
emerging fuels, which was followed by a ministerial conference of the US-India Strategic
Clean Energy Partnership (SCEP).

India aims to commercialise 50% of its SPR (strategic petroleum reserves) to raise funds and
build additional storage tanks to offset high oil prices. Prime Minister Mr. Narendra Modi has
announced that the Government of India plans to invest Rs. 7.5 lakh crore (US$ 102.49 billion)
on oil and gas infrastructure in the next five years. There were 89,396 OMC retail outlets in
India, as of March 1, 2024.

The Petroleum and Natural Gas Regulatory Board (PNGRB), the downstream regulator, in
March 2023, announced that it has amended the PNGRB Determination of Natural Gas
Pipeline Tariff regulations to incorporate provisions for Unified Tariff for natural gas pipelines
with a mission of “One Nation, One Grid, and One Tariff.” Based on the regulations, PNGRB
has notified a levelized Unified Tariff of Rs. 73.93/MMBTU and created three tariff zones for

5
Unified Tariff, where the first zone is up to a distance of 300 kms from the gas source, the
second zone is 300-1.200 kms, and the third zone is beyond 1,200 kms.

India’s oil and gas production is expected to achieve a mid-decade peak between 2023-2032,
around 2027, driven by the KG-Basin projects operated by Reliance Industries Limited and Oil
and Natural Gas Corporation (ONGC).

In May 2022, the Government announced a reduction in excise duty of Rs. 8 (US$ 0.10) per
litre on petrol and Rs. 6 (US$ 0.077) per litre on diesel, to combat the high fuel prices. In the
same month, the government approved changes in the Biofuel Policy to bring forward the target
for 20% ethanol blending with petroleum to 2025-26 from 2030.

By 2030, India wants to increase its refining capacity by double, to 450–500 million tonnes.
On the back of ongoing strong economic expansion, it is predicted that India's energy demand
will increase more quickly than that of any other major global economy. Consequently, India’s
energy demand as a percentage of global energy demand is expected to rise to 11% in 2040
from 6% in 2017.

Oil and Gas Clusters

• Hyderabad

• Mangalore

• Jamnagar

• NCR

• Pune

• Haldia

• Chennai

6
Industry Contacts

• Directorate General of Hydrocarbons

• Oil and Natural Gas Corporation Ltd

• Indian Oil Corporation

• Oil India Ltd

7
INDIAN OIL & GAS INDUSTRY PRESENT STATUS
Investments/Recent Developments

According to the data released by Department for Promotion of Industry and Internal Trade
(DPIIT), FDI inflows in India’s petroleum and natural gas sector stood at Rs. 43,760.75 (US$
8.19 billion) between April 2000-September 2024.

Following are some of the major investments and developments in the oil and gas sector:

• Minister of Petroleum & Natural Gas Mr. Hardeep Singh Puri said the Exploration and
Production (E&P) sector offers investment opportunities worth US$ 100 billion by
2030.

• As of June 1, 2024, India had 10,941 kms of crude pipeline network, with a capacity of
153.1 MMTPA.

• India’s crude oil production stood at 19.88 MMT during April-January 2025.

• Indian refining capacity has increased from 215.1 Million Metric Tonne Per Annum
(MMTPA) to 256.8 MMTPA in last 10 years. Ans is projected to increase to 309.5
MMTPA by the year 2028.

• India’s oil and gas production is expected to achieve a mid-decade peak between 2023-
2032, around 2027, driven by the KG-Basin projects operated by Reliance Industries
Limited and Oil and Natural Gas Corporation (ONGC).

• With 13,344 kms of refined products pipeline in India, the Indian Oil Corporation
Limited (IOCL) leads the segment with 55.30%, as of February 1, 2025.

• The total number of OMC retail outlets increased to 90,165, as of May 1, 2024, from
59,595 in FY17.

• In India, as of May 1, 2024, IOCL owned the highest number of retail outlets (37,511),
followed by HPCL (22,050), and BPCL (21,865).

• As of May 1, 2024, there were 25,489 LPG distributors (under PSUs) in India.

• Production of CBM in April 2024 stood at 54.77 MMSCM.

8
• India’s oil demand in the year 2024 is expected to see a growth of 220,000 barrels per
day to reach 5.57 million barrels per day, up 4.19% from 2023, as per an estimate by
OPEC.

• As announced in May 2023, Jio-bp, the retail fuel joint venture of Reliance and bp will
sell diesel mixed with detergents and dispersants at Rs. 1 cheaper per litre than gasoil
sold by the state-run companies, such as IOCL, BPCL, and HPCL.

• In FY24, the oil sector’s total installed refinery capacity stood at 256.8 MMT up to
April 2024, and IOCL emerged as the largest domestic refiner with a capacity of 70.1
MMT

• As of September 30, 2024, Gas Authority of India Ltd. (GAIL) had the largest share
(63.47% or 18,534 kms) of the country’s natural gas pipeline network (29,203 kms).

• Tata Mining Limited signed an MoU with Gas Authority of India Limited (GAIL), to
reduce carbon footprint in its operations, and for the supply of natural gas to its Ferro
Alloys Plant at Athgarh in Odisha’s Cuttack district. GAIL will supply the agreed
quantity of natural gas through its pipeline from Gujarat to Athgarh.

• The Petroleum and Natural Gas Regulatory Board (PNGRB), the downstream regulator,
in March 2023, announced that it has amended the PNGRB Determination of Natural
Gas Pipeline Tariff regulations to incorporate provisions for Unified Tariff for natural
gas pipelines with a mission of “One Nation, One Grid, and One Tariff”. Based on the
regulations, PNGRB has notified a levelized Unified Tariff of Rs. 73.93/MMBTU and
created three tariff zones for Unified Tariff, where the first zone is up to a distance of
300 kms from the gas source, the second zone is 300-1,200 kms, and the third zone is
beyond 1,200 kms.

• In February 2023, Oil India Limited commenced the project for India’s first exploratory
oil well in Mahanadi Onshore Basin in Odisha under OALP.

• In May 2022, ONGC announced plans to invest US$ 4 billion from FY22-25 to increase
its exploration efforts in India.

• In April 2022, Indian Oil Corporation Limited, Larsen & Toubro and Goldman Sachs-
backed renewable energy producer ReNew Power formed a joint venture by signing a

9
 term sheet. This JV will develop green hydrogen projects, helping India cut down its
carbon emissions.

• Exports of petroleum products from India reached 51.4 MMT in FY24 until January
2024.

• The value of exports of crude oil and petroleum products stood at US$ 44.41 billion. In
FY22, crude oil imports stood at 4.24 MBPD, which was worth US$ 120.4 billion.

• In March 2022, the Board of IOCL approved plans to invest Rs. 7,282 crore (US$ 932.6
million) for the development of City Gas Distribution (CGD) network in 9
Geographical Areas (GAs).

• In March 2022, the Board of Oil India approved an investment of Rs. 6,555 crore (US$
839.49 million) for Numaligarh petrochemical project.

• In January 2022, Indian Oil Corp. Ltd. (IOCL) announced plans to expand its City Gas
Distribution (CGD) business, looking to invest Rs. 7,000 crore (US$ 918.6 million).

• In January 2022, Adani Total Gas Ltd. (ATGL), a joint venture between the Adani
Group and TotalEnergies, won licenses to expand its City Gas Distribution (CGD)
network to 14 new geographical areas, with an investment of Rs. 20,000 crore (US$
2.62 billion).

• In November 2021, Oil and Natural Gas Corp. Ltd. (ONGC) announced that it invested
up to Rs. 6,000 crore (US$ 800 million) in its petrochemicals arm (ONGC Petro
Additions Ltd.) to meet its equity requirements.

• In November 2021, Indian Oil, Bharat Petroleum Corporation Limited and Hindustan
Petroleum Corporation Limited announced the launch of the Model Retail Outlet
Scheme and a Digital Customer Feedback Programme called Darpan@petrolpump.
These three oil PSUs have joined hands to launch model retail outlets to enhance service
standards and amenities across their networks, which serve over six crore consumers
every day.

10
MAJOR PLAYERS AND MARKET SHARE

MARKET SIZE
• According to the IEA (India Energy Outlook 2021), primary energy demand is expected
to nearly double to 1,123 million tonnes of oil equivalent, as India's Gross Domestic
Product (GDP) is expected to increase to US$ 8.6 trillion by 2040.
• Indian refining capacity has increased from 215.1 Million Metric Tons Per Annum
(MMTPA) to 256.8 MMTPA in last 10 years. And it is projected to increase to 309.5
MMTPA by the year 2028.
• India is expected to be one of the largest contributors to non-OECD petroleum
consumption growth globally. The consumption of petroleum products has increased
from 158.4 million metric tons (MMT) in the FY to 234.3 MMT in the FY24.
• High-Speed Diesel was the most consumed oil product in India and accounted for
38.6% of petroleum product consumption in FY23.
• India’s consumption of petroleum products stood at almost 4.44 million barrels per day
(BPD) in FY23, up from 4.05 million BPD in FY22.
• India’s LNG import stood at 28,300 million metric tonnes (MMSCM) between April -
December 2024.
• According to the International Energy Agency (IEA), consumption of natural gas in
India is expected to grow by 25 BCM, registering an average annual growth of 9% until
2024.
•

11
OPPORTUNITIES
The Indian Oil & Gas sector presents significant investment and growth opportunities:

• Increasing Domestic Demand: India is projected to be the largest source of global oil
demand growth between now and 2030, contributing significantly to global energy
consumption.

• Government Support and Policy Reforms: Policies like Hydrocarbon Exploration

and Licensing Policy (HELP), Open Acreage Licensing Policy (OALP), and various
incentives for biofuels and strategic petroleum reserves create a conducive investment
environment.

• Expansion of City Gas Distribution (CGD) Network: The government's push for
complete national coverage of CGD offers substantial investment potential in gas
infrastructure.

• Biofuel Blending Targets: Ambitious targets for ethanol blending in petrol (20% by
2025-26) and promotion of Compressed Biogas (CBG) create a robust market for
biofuels.

• Growing Refining Capacity: India's plans to significantly increase its refining

capacity offer opportunities for investment in new projects and modernization of
existing ones.

• Strategic Geographic Location: India's position makes it a key player in the global
energy market, offering opportunities for investment and collaboration in refining and
export.

• Technological Advancements: Adoption of cutting-edge technologies like Enhanced

Oil Recovery (EOR), digitalization, AI, and green technologies can optimize operations
and improve efficiency.

• Diversification into Renewables: Oil & gas companies are increasingly diversifying
into renewable energy, creating opportunities in solar, wind, and EV charging
infrastructure.

• Skill Development: The evolving industry creates demand for skilled professionals in
various segments, offering opportunities for training and education.

12
RECENT TRENDS

Several key trends are shaping the Indian Oil & Gas industry:

• Shifting Energy Mix: While fossil fuels remain dominant, there's a clear governmental
and industry push towards a more sustainable energy mix, with increased focus on
natural gas, biofuels, and green hydrogen.

• Increased Domestic Production (Marginal but Growing): Efforts to enhance crude

oil and natural gas production domestically are showing some positive trends,
particularly in natural gas from deepwater projects.

• Aggressive Refinery Expansion: Indian oil companies are heavily investing in

expanding and upgrading refining capacity to meet rising domestic and export
demands.

• Emphasis on Biofuels: The Ethanol Blending Program has seen significant success,
with blending percentages increasing rapidly. The SATAT initiative is also promoting
CBG production.

• Strategic Partnerships and Trade Dynamics: Indian refiners are adapting

procurement strategies in response to global geopolitical shifts and trade dynamics,
diversifying sources and optimizing freight rates.

• Digitalization and Automation: Adoption of technologies like AI, IoT, and data
analytics is streamlining operations, improving efficiency, and enhancing safety across
the value chain.

• Focus on Environmental Compliance: Increasing regulatory pressure and public

scrutiny are pushing companies to adopt cleaner technologies and reduce their carbon
footprint.

• Policy and Regulatory Reforms: Ongoing legislative changes, such as the Oilfields
(Regulation and Development) Amendment Bill, 2024, aim to modernize the
framework, attract investment, and address environmental concerns.

• Rising LPG and PNG Consumption: Government initiatives have significantly

expanded access to LPG and PNG connections, indicating a shift towards cleaner
cooking and industrial fuels.

13
SWOT Analysis in Oil & Gas Industry in India

Strengths

• Large and Growing Domestic Demand: India is one of the world's largest and fastest-
growing energy markets, ensuring a robust customer base.

• Extensive Infrastructure: A vast network of refineries, pipelines, retail outlets, and

LNG terminals provides a strong foundation.

• Government Support and Policy Framework: Supportive policies, subsidies, and

strategic guidance from the government (e.g., HELP, OALP, strategic reserves) provide
stability and encourage investment.

• Integrated Business Model: Major public sector undertakings (PSUs) often operate
across the entire value chain (upstream, midstream, downstream), offering operational
synergies.

• Skilled Workforce: A large pool of engineering and technical talent supports industry
operations.

• Focus on R&D: Investments in research and development drive innovation in cleaner

fuels, process improvements, and alternative energy.

Weaknesses

• High Import Dependency: India heavily relies on crude oil imports (over 85%),
making it vulnerable to global price fluctuations and geopolitical risks.

• Aging Infrastructure: Some refineries and pipelines require significant investment for
modernization and upgrades.

• Bureaucratic Inefficiencies: As a largely government-controlled sector, decision-

making can sometimes be slow and bureaucratic, hindering agility.

• Environmental Concerns: The industry faces increasing scrutiny over its

environmental impact and carbon emissions, requiring substantial investments in
cleaner technologies.

• Limited Domestic Exploration Success: Despite policy reforms, domestic exploration

has not yielded sufficient discoveries to significantly reduce import reliance.

14
 • Vulnerability to Price Controls: Government intervention in fuel pricing can impact
profitability, especially during periods of high crude oil prices.

• High Debt Levels: Some public sector companies carry significant debt, potentially
limiting financial flexibility for new investments.

Opportunities

• Growing Natural Gas Market: Significant potential for growth in natural gas
consumption, driven by CGD expansion and industrial demand.

• Biofuel Development: India's agricultural abundance provides feedstock for increased

biofuel production, supporting blending targets.

• Renewable Energy Transition: Opportunities for oil & gas companies to diversify
into solar, wind, and green hydrogen projects, leveraging their existing infrastructure
and expertise.

• Electric Vehicle (EV) Infrastructure: Investment opportunities in developing EV

charging networks across the country.

• Technological Adoption: Leveraging digitalization, AI, and big data for optimized
exploration, production, refining, and supply chain management.

• Strategic International Collaborations: Partnerships with foreign companies for

technology transfer, investment, and exploration.

• Refining Hub for Exports: India's expanding refining capacity positions it as a key
exporter of petroleum products to regional and global markets.

Threats

• Global Oil Price Volatility: Fluctuations in international crude oil prices directly
impact profitability and the country's import bill.

• Shift Towards Renewable Energy and EVs: Long-term decline in demand for
traditional fossil fuels due to global energy transition and increasing EV adoption.

• Stringent Environmental Regulations: Growing pressure for stricter emission norms

and decarbonization could lead to increased operational costs and investment
requirements.

15
• Intense Competition: Increasing competition from private players (e.g., Reliance
Industries) and global oil majors entering the Indian market.

• Geopolitical Risks: Disruptions to global supply chains and trade dynamics due to
international conflicts or political instability.

• Technological Disruptions: Rapid advancements in alternative energy and energy

storage technologies could challenge the traditional business model.

• Cybersecurity Risks: The increasing digitalization of critical infrastructure makes the

industry vulnerable to cyberattacks.

16
CONCLUSION

The Indian Oil & Gas industry is at a pivotal juncture, balancing the imperative of meeting
rapidly growing energy demand with the global shift towards sustainability. While challenges
like high import dependency and environmental concerns persist, the sector is proactively
embracing opportunities in natural gas, biofuels, and renewable energy.

Government support through progressive policies, significant investment plans in

infrastructure expansion, and a strong focus on technological advancements are key drivers for
its future growth. India is set to become the largest source of global oil demand growth this
decade, making its oil and gas sector a crucial player in the global energy landscape. The
industry's ability to navigate geopolitical complexities, accelerate its energy transition, and
leverage technological innovations will be critical in securing India's energy future and
maintaining its position as a significant global energy hub.

17