Why India’s crude oil production is declining? Explain the policy changes that are needed to boost the production of crude oil. (200 Words)
Refer - The Indian Express
Enrich the answer from other sources, if the question demands.
Ananta Kumar Muduli 4 years
Sir pls review
IAS Parliament 4 years
Try to include about Open acreage licensing policy. Keep Writing.
Aradhana Tiwari 4 years
Crude oil production in India comes primarily from three onshore states- Assam, Gujarat and Rajasthan, which together account for "more than 96 per cent" of oil from onshore fields, and from the aged offshore Mumbai High Field.
The country is witnessing a declining trend in the domestic crude oil production at a time when the country’s oil import bill has already ballooned to $102.9 billion with 87.6% dependence on oil import in the last few years. This is further coincided with collapse in demand caused by Covid-19.
>>> Various reasons associated with the declining trend of domestic crude oil production :
- Due to "fall in production from fields operated by ONGC, private players- Cairn India and Hindustan Oil Exploration Company, and fields operated under a Joint Venture", India’s crude oil production declined to 32,169.3 thousand Metric Tonnes (TMT) in FY 2020 from 38,089.7 TMT in FY 2012.
- "Ageing fields" lead to fall in output from nearly all the offshore and onshore blocks.
- A steady decline are also due to - lack of new oil discoveries, delay in drilling from discovered wells , strikes and miscreant activities in operational areas.
>>> Policy changes that are needed to boost the production of crude oil :
• Expand strategic petroleum reserves :
- "India's Strategic Petroleum Reserves storage capacity is 40 million barrels that can cover around 10 days of present day net imports".
- If India wants to keep up with its growing demand, expansion is therefore important along with the preparation of future phases of the strategic stock holding policy.
• To manage the demand for oil during an oil supply emergency : some provisions like;
- availability of emergency stocks, and
- physically accessiblility of the large consumption centres across the whole territory are needed to maintain equitable distribution of petroleum products.
• Floor price to oil producers : to protect them from any sharp falls in international crude prices.
• Open Acreage Licensing Programme (OALP) : The government introduced it in 2019 to allow companies to carve out blocks that they are interested in , with lower royalties and no oil cess. This kind of policy incentivised more public-private investment in exploration and production.
IAS Parliament 4 years
Madhaba Chandra gharai 4 years
Review it
IAS Parliament 4 years
Avoid writing general points, try to underline key points. Keep Writing.
Soni Kumari 4 years
Please review sir
IAS Parliament 4 years
Try to include about oil acreage licensing policy. Keep Writing.
Kaushal Meena 4 years
Please review my answer
IAS Parliament 4 years
Try to elaborate on declining oil production rather than mentioning it. Keep Writing.
Kaushal Meena 4 years
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