Government falls short of its oil production and natural gas output targets again

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Published: January 22, 2020 4:49:25 PM

India yet again reported a decline in crude oil production during the month of December 2019, as state-run oil companies ONGC and Oil India, and private players too produced less.

oil, oil pricesDisruption in Assam’s field activities due to protest has also contributed to the shortfall in production for ONGC.

India yet again reported a decline in crude oil production during the month of December 2019, as state-run oil companies ONGC and Oil India, and private players too produced less. The production remained down on-year throughout the current financial year, according to data released by the Ministry of Petroleum and Natural Gas on Wednesday. India’s crude oil production in December at 2650.81 thousand metric tonne (TMT) fell short of the monthly output target of 2973.36 TMT by 10.8 per cent. The oil output during the month was also 7.39 per cent lower, compared with 2862.32 TMT produced in December 2018.

The overall fall in crude production was primarily due to a fall in production from all the fields operated by Oil and Natural Gas Corporation (ONGC), Oil India and private operators. This might further put pressure on the country’s oil import which is already at 1,634 million barrels in FY20. Disruption in Assam’s field activities due to protest has also contributed to the shortfall in production for ONGC. Apart from this, an increase in water cut in certain wells of Mumbai High has also affected oil production.

ONGC, the largest contributor to the Indian oil industry, reported a marginal decline in its production to 1748.63 TMT in December 2019. This, however, was 11 per cent short of the company’s production target of 1985.59 TMT. Oil India and other private operators also faced some hindrance. “Lag in liquidating the inventory of planned workover and production optimization jobs” affected the crude oil production.

Meanwhile, less gas off-take by consumers along with slow gas ramp up in pilot wells have dragged down the production of natural gas. Natural gas production during December 2019 was 2640.80 million metric standard cubic meters (MMSCM) which is 11.13 per cent lower than the monthly target and 7.87 per cent lower year-on-year when compared with December 2018. “Major reason for the shortfall in production by Oil India is less gas withdrawal by major customers owing to the shutdown of their plants,” the oil ministry said.

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