Indian companies’ oil & gas output from overseas fields drops 11%
The output declined to 12.8 million metric tonnes of oil equivalent (mmtoe) during April-October this year from 14.4 mmtoe in the same period last year. India’s domestic production of oil and gas has also fallen 9% in the same period.
New Delhi: Output of Indian companies from overseas oil and gas fields has fallen 11 per cent so far this year on the natural decline in fields, production cuts by Russia and the UAE to meet OPEC plus supply reduction commitments, and pandemic-induced capex delays.
The output declined to 12.8 million metric tonnes of oil equivalent (mmtoe) during April-October this year from 14.4 mmtoe in the same period last year. India’s domestic production of oil and gas has also fallen 9 per cent in the same period.
“Principally, some major international projects of ONGC Videsh have been impacted by host governments being members of OPEC+ group of countries and complying to agreed-upon production cuts. Due to this factor, production has been affected at Vankor in Russia, Lower Zakum in UAE, ACG Azerbaijan and GPOC project in South Sudan,” ONGC Videsh, the overseas arm of state-run Oil and Natural Gas Corp, said in an emailed response to ET’s query.
“Geopolitical situation” was hurting production at its two projects in Venezuela, the company said. “Natural decline, exit from GNPOC in Sudan, Covid-19 impact on drilling schedule and deferment of capex activities; and optimization of Capex and Opex due to low oil price scenario” were also affecting output, it said
“The combined impact of these factors would be about 2 mmtoe, depending on changes in key elements during the second half of the year,” said ONGC Videsh, whose production of 15 mmtoe in 2019-20 was about 60 per cent of Indian companies’ total output from overseas fields.
Other state-run firms such as Oil India, Indian Oil, and Bharat Petroleum too have invested in some of the same producing fields abroad as ONGC and are facing similar challenges.
ONGC Videsh has 14 producing assets across several countries but depends predominantly on Russia for its annual output. In 2018-19, Russia contributed 62 per cent of ONGC Videsh’s oil and gas production while Vietnam accounted for a tenth. The UAE, Myanmar, and Azerbaijan made up 5 per cent each.
As part of OPEC plus, a grouping of about two dozen oil-producing countries, Russia, the UAE and Azerbaijan have taken output cut to support prices that had sharply dropped earlier this year following a demand collapse due to the pandemic.