Oil and Gas: Petroleum Industry of India

The introduction associated with the Indian petroleum market started out with a really sluggish note. It began primarily within the northeastern section of India specifically in the area known as Digboi within the state of Assam. Before the 70's, the production involving petroleum as well as the search for fresh areas for extraction of petroleum had been primarily limited to the northeastern state within India. Nevertheless, an essential development within the Indian petroleum market was included with the passing involving the Industrial Policy Resolution in 1956, that stressed focus on the development and also marketing of industries within India. One more significant event had been the discovery regarding Bombay High, that transformed the actual situation of the Indian petroleum market significantly. The Indian petroleum market had been financed totally by the federal government, plus the management power over the petroleum industry and all their associated activity had been completely with the federal government. The petroleum market offers the most important function to play in altering the Indian economic climate from an agrarian economic system to an industrial economic system. The adoption involving liberalization and also privatization in July 1991 altered the specific situation once again. The federal government began permitting the Indian petroleum market to go into private hands as well as entered into federal government and also personal joint ventures. The federal government additionally reduced the strict legislation procedure on the petroleum market. This offered a huge improvement to the industry. The market started to develop at a huge rate. The production involving petroleum and also petroleum items additionally demonstrated a substantial increase. Together with liberalization and also privatization, the entire economic climate of India increased. Additionally, the need for petroleum items improved at a yearly rate around 5.5%. The interest in petroleum and also petroleum items still continues to increase, and there's fantastic potential for investors to invest inside India within the industry and also acquire valuable profits whilst achieving the growing needs for the petroleum items. The petroleum market within India is actually especially favorable with regard to international investment as the market is among the fastest developing segments, also it indicates an astounding rate of growth of about 13% recently. In addition to the tremendous growth rate within the Indian petroleum market these days, in addition, it features technological know-how of global requirements, effortless accessibility to infrastructure at inexpensive prices, high demands regarding petroleum items, and also greater spending practices from the middle-class folks. Every one of these elements help to make investments within the Indian petroleum market an attractive proposition regarding international investors. The international trade in petroleum and also petroleum items recently have garnered substantial development. It has as a result drawn fresh international investments. A number of the primary petroleum manufactured products with regard to doing business with international nations around the world tend to be petroleum gas, gas oil, propane, distilled raw oil, naphtha, ethane, and also kerosene. The petroleum market has led intensely towards the production market in India via

international trade in petroleum items. Fast globalization, fast-changing technological knowhow, and also the transforming techniques in how business is carried out have introduced considerable modifications and also tremendous opportunities for petroleum organizations within India to prosper and also increase their own operation to worldwide markets. One more extremely important reason why the Indian petroleum market is a great choice with regard to investment would be that the way forward for the petroleum market within India promises excellent possibility of improvement. The quick financial development of India and also the numerous developmental activities happening provides India with possibilities in the foreseeable future to become a prominent player internationally in the export associated with petroleum goods.

An Introduction to Oil Industry in India

After the Indian Independence, the Oil Industry in India was a very small one in size and Oil was produced mainly from Assam and the total amount of Oil production was not more than 250,000 tonnes per year . This small amount of production made the oil experts from different countries predict the future of the oil industry as a dull one and also doubted India's ability to search for new oil reserves. But the Government of India declared the Oil industry in India as the core sector industry under the Industrial Policy Resolution bill in the year 1954, which helped the Oil Industry in India vastly. Oil exploration and production in India is done by companies like NOC or National Oil Corporation, ONGC or Oil and Natural Gas Corporation and OIL who are actually the oil companies in India that are owned by the government under the Industrial Policy Rule. The National Oil Corporation during the 1970s used to produce and supply more than 70 percent of the domestic need for the petroleum but by the end of this amount dropped to near about 35 percent. This was because the

demand on the one hand was increasing at a good rate and the production was declining at a steady rate. Oil Industry in India during the year 2004-2005 fulfilled most of demand through importing oil from multiple oil producing countries. The Oil Industry in India itself produced nearly 35 million metric tons of Oil from the year 2001 to 2005. The Import that is done by the Oil Industry in India comes mostly from the Middle East Asia. The Oil that is produced by the Oil Industry in India provides more than 35 percent of the energy that is primarily consumed by the people of India. This amount is expected to grow further with both economic and overall growth in terms of production as well as percentage. The demand for oil is predicted to go higher and higher with every passing decade and is expected to reach an amount of nearly 250 million metric ton by the year 2024. Some of the major companies in the Oil Industry in India are:

Oil India Ltd. Reliance industries Bharat Petroleum Corporation Limited Hindustan Petroleum.

Oil Industry Analysis

Oil industry analysis plays a vital role in evaluating the functioning of oil industry, especially during crunch situations of demand and supply imbalance. Such an analysis gives an unambiguous picture of the present scenario as well as past trends of the world oil industry.
The oil industry comprises of many oil companies that search for and produce crude oil. These companies produce petroleum products by extracting crude oil and refining it. These firms market their products to numerous industrial and retail consumers. Some of the major companies producing oil products are ExxonMobil Corp (XOM), British Petroleum PLC (BP) and ChevronTexaco.

Oil Industry Analysis: How is the Oil Industry measured?

Oil companies measure oil production in the unit of barrels (bbl). One barrel equals 42 US gallons. The oil industry uses a system to indicate production. While m signifies 1000, mm indicates one million. Hence, one million barrels are represented as mmbbl. Exploration & Production (E&P) companies usually describe their production in units of barrels of oil equivalent (BOE). E and P companies keep oil and gas products in reservoirs and report the quantity stocked in reserves by using bbl and BOE terms. Such companies calculate and predict their proceeds and earnings by evaluating reserves.

Oil Industry Analysis: How is the Oil Industry tracked?

Here are some ways to track the oil industry: Profit Analysis: Profit analyses are carried out in terms of:

Total profits: This evaluates the effects on expenditure flows inside the economy. Profit rates: These reveal the efficiency of a firms management to utilize available resources.

Acquisition Cost of Crude Oil: It is a consistent measure of the actual cost of crude oil to the refiners. It also reveals the mixed (light and heavy oils) qualities of crude oils used by refineries. Price Differentials: This takes into account aggregate net income, average monthly prices and the movement of monthly spot market prices. Oil prices surged through a large part of the first decade of the 21st century. While the high price of crude oil curbed demand in 2008, oil prices plummeted in early 2009. A

study conducted by IHS Cambridge Energy Research Associates estimated that 52% of the potential growth in production capacity till 2014 is at risk of cancellation or deferment. This loss of 7.6 million barrels of oil per day will be a result of inefficient project economics or restricted cash flow from investors.

World Oil Industry

World Oil Industry is a big market where millions of dollars are associated and lots of country's economy is very much dependent on the oil industry in their respective countries. The World Oil Industry not only includes petroleum or crude oil but also has other kind of edible oil as well.

The World Oil Industry is very much dependent on the amount of supply they get from various countries which provide oil of both kind. It has been observed that the crude oil industry is very much dependent upon the major crude oil producing countries like SaudiArab, Venezuela, Iran, Iraq and many more. It has already been observed that if one of these countries stop production of crude oil , the price in the world market goes upward immediately. During the war between America and Iraq or between Iran and Iraq the price of oil touched record height and put people under immense pressure. One can also see that most of oil producing countries are also looking to follow the conservation policy and this is also making the World Oil Industry face difficult times. Edible oil has no longer remained in usage in few things but is used for multiple purposes and in this case also countries like Malaysia and Indonesia earn a lot of foreign currency through this business and they also export a great amount of edible oil to other countries as well.