House panel asks govt to take concrete steps to raise domestic oil production

• Posted in OilGas
• on March 24, 2022
• No Comments.

The standing committee on petroleum and natural gas has recommended the government to review its strategy to increase the domestic oil production and take concrete, tangible steps for the same. In its latest report submitted to the Parliament, the committee raised concern over the “very minimal” contribution of oilfields under the ‘new exploration licensing policy’ in the overall production of crude oil in the country.

The report noted that the ministry of petroleum and natural gas has assured the panel that from the upcoming financial year (FY23), there would be turnaround in the production of crude in the country and it will witness an increase in production.

It has suggested that the ministry to “seriously review” the strategy to increase the domestic production in crude oil and gas in the light of various policy initiatives undertaken during the last several years to assess its effectiveness and fix accountability upon the organisation or the state-run oil companies which have been mandated with the task.

“The committee therefore, recommends the ministry to take concrete and tangible steps to increase the domestic production of crude oil and natural gas for overall energy security of the country,” said the report submitted on Tuesday.

The recommendations gain significance as global crude oil prices are surging, raising anticipation of severe impact on India’s current account deficit, inflation and balance of payments.
The panel under the chairmanship of Ramesh Bidhuri, a member of the Lok Sabha, observed that the domestic production of crude oil and natural gas assumes significance given the excessive reliance of the country on imports. India currently meets around 80% of its energy requirements through imports.

With regard to the performance of state-run ONGC during the last three financial years, the panel said in its report that, there has been a consistent decline in the crude oil and natural gas production both under the nomination and NELP regimes.

Further, Oil India Ltd’s performance in terms of crude production too has witnessed a decline in the last four years. The committee said that it has been informed that ONGC has initiated steps in exploration and production, including monetisation of discoveries, redevelopment of matured fields and development of new fields, among others.

Although the panel noted that the Centre has laid down a road map for reducing India’s import dependence for its oil requirement and has taken several steps, it suggested study of the sectoral policies to assess the impact of the measures taken.
It expressed dismay at the fact that there has been no inter-ministerial coordination mechanism to discuss the steps taken to reduce import dependence.
“The committee recommends that the ministry should devise a suitable mechanism and set measurable target and assess the success of its measure in achieving the objectives,” it said.

Share This