The oil and gas sector is among the six core industries in India. The Government of India has adopted several policies to fulfil the increasing demand. The government has allowed 100 per cent Foreign Direct Investment (FDI) in many segments of the sector, including natural gas, petroleum products, and refineries, among others. Today, it attracts both domestic and foreign investment, as attested by the presence of Reliance Industries Ltd (RIL) and Cairn India.

Total oil imports rose 4.24 per cent year-on-year to US$ 86.45 billion in April-March 2016-17. India’s oil consumption grew 8.3 per cent year-on-year to 212.7 million tonnes in 2016, as against the global growth of 1.5 per cent, thereby making it the third-largest oil consuming nation in the world after United States & China.

India is the fourth-largest Liquefied Natural Gas (LNG) importer after Japan, South Korea and China, and accounts for 5.8 per cent of the total global trade.Domestic LNG demand is expected to grow at a CAGR of 16.89 per cent to 306.54 MMSCMD by 2021 from 64 MMSCMD in 2015.

The demand of Petroleum Oil and Lubricants grew at a Compound Annual Growth Rate (CAGR) of 5.6 per cent under the 12th Five Year Plan (2012-17)

The country's gas production is expected to touch 90 Billion Cubic Metres (BCM) in 2040 from 23.09 BCM in FY2016-17 (till December 2016). Gas pipeline infrastructure in the country stood at 16,240.4 km in November 2016.

State-owned Oil and Natural Gas Corporation (ONGC) dominates the upstream segment (exploration and production), and produced around 1,847 thousand metric tonnes (TMT) of crude oil, as against the country’s 2,939 MT oil output in April 2017. The company also accounted for 57 percent of the country’s domestic crude oil production in 2016-17.

The Government of India plans to build a nine million tonne (MT) refinery in Rajasthan as well as a 60 MT refinery in Maharashtra, auction oil and gas fields, increase use of liquefied natural gas (LNG).

India’s oil demand is expected to grow at a CAGR of 3.6 per cent to 458 Million Tonnes of Oil Equivalent (MTOE) by 2040, while demand for energy will more than double by 2040 as economy will grow to more than five times its current size.

Gas production will likely touch 90 Billion Cubic Metres (BCM) by 2040, subject to adjustment to the current formula that determines the price paid to domestic producers, while demand for natural gas will grow at a CAGR of 4.6 per cent to touch 149 MTOE. The demand for petroleum products is estimated to reach 244,960 MT by 2021-22, up from 186,209 MT in 2016, and the demand for natural gas is expected to reach 606 MMSCMD by 2021-22 as against a demand of 473 MMSCMD in 2016-17.

The demand for petroleum products is estimated to reach 244,960 MT by 2021-22, up from 186,209 MT in 2016, and the demand for natural gas is expected to reach 606 MMSCMD by 2021-22 as against a demand of 473 MMSCMD in 2016-17.

Reserves :-

As on 31 March 2016, India had estimated crude oil reserves of 621.10 million tonnes, declining by 2.28% from the previous year. The largest reserves are found in the Western Offshore (39.79%), and Assam (25.89%). The estimated reserves of natural gas in India as on 31 March 2016 was 1227.23 billion cubic meters, declining by 1.97% from the previous year. The largest reserves of natural gas are located in the Eastern Offshore (36.79%) and the Western Offshore (23.95%).

The Indian Strategic Petroleum Reserve (ISPR) is an emergency fuel store of total 5 MMT (million metric tons) or 36.92 MMbbl of strategic crude oil enough to provide 10 days of consumption which are maintained by the Indian Strategic Petroleum Reserves Limited.

Strategic crude oil storages are at 3 underground locations in Mangalore, Visakhapatnam and Padur near Udupi are located on the east and west coasts of India are readily accessible to the refineries. These strategic storages are in addition to the existing storages of crude oil and petroleum products with the oil companies and serve in response to external supply disruptions.