Oil and gas production has seen a 7 per cent decline over volumes between April to September this year with a total output of 40.4 million tonnes of oil equivalent compared to the same period last year, according to an ICRA report.
"The dip has been mainly on account of lower gas production of 13 per cent year on year following further disappointments in Reliance Industries Limited’s KG D-6 block and 1 per cent lowering of crude oil production to 19.08 million tonnes owing to the lowering of volumes of ONGC and OIL due to natural decline affecting their main properties apart from some production disruptions, even as Cairn India has ramped up scale and activities at its Rajasthan block," said the report.
The report also attributed the burgeoning of import bill for crude oil to about 18 per cent higher vis-à-vis last year at Rs. 3,654 billion for first half of fiscal year 2013 to firm global energy prices and continued high import reliance coupled with the adverse foreign exchange rate environment.
On the policy front, the report mentioned that all eyes would be on the Rangarajan Committee report which is expected to finalise and submit it by the year end. "The panel’s recommendations are expected to provide guidance on various contentious issues including structure and provisions of the production sharing contracts, determination of the profit sharing mechanism, method of gas pricing and are expected to set the ground rules for the future development of the Indian Exploration & Production sector," the report added.