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Petroleum & Natural Gas




  • Petroleum & Natural Gas constitutes over 16% of GDP and includes transportation, refining and marketing of petroleum products and gas

    • $90 billion revenues in FY 05

  • India has a crude oil refining capacity of about 127 MMT

  • Natural gas demand is about 150 MMSCMD (2004) with only 54% being met through domestic sources

  • Production of petroleum products has grown at 6.5% p.a. during the last 3 years


Over 190 MMT of refining
capacity required by 2010

Large growth projected
in fuel retail



  • Public sector companies play a major role in oil refineries, oil and gas pipelines and gasoline retail outlets

    • Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum together account for about 70% of India's refining capacity and own/franchise most gasoline retail outlets

    • Gas Authority of India Ltd. (GAIL) owns and operates a large gas grid

  • Reliance Industries and Essar Group are the major Indian Private sector participants

    • Reliance is expanding its Jamnagar refining capacity to 60 MMTA. Expected to be the single largest grassroot refinery in the world

  • Shell has invested in refining and retail; British Gas has invested in city gas distribution

  • BP, Total, Exxon Mobil and Eni are also present in India. While they are currently in marketing lubricants, Total and BP plan to expand in other value chain segments


  • 100% FDI is allowed in petroleum refining, petroleum product and gas pipelines and marketing/retail through the automatic route

    • For entry into petroleum product marketing/retail, an investment in an upstream venture of over $450 million is required

  • Virtual administrative price control of government over most petroleum products

  • Petroleum and Natural Gas Regulatory Board Bill to be enacted shortly will result in the setting up of an Independent Regulator for Oil & Gas

  • Natural Gas Pipeline Policy to be enacted shortly

Major players and presence in value chain

Company Revenue
($ billion) FY 05
Upstream Midstream -Pipelines


Refining Retail Outlets
Public Sector
IOC 31.4
BPCL 14.9  
HPCL 14.4  
ONGC 14.1
Domestic Private Players
Reliance Industries 15.4
International Private Players
Shell (FY 04) 268.7      
British Gas (Centrica)
(FY 04)
Cairn Energy (FY 04) 0.2      

Source: BP Statistical Review of World Energy - 2005, Capitaline Fortune, Ministry of Petroleum and Natural Gas, Government of India.

Source: Directorate General of Hydrocarbons, Ministry of Petroleum & Natural Gas, BP Statistical Review of World Energy




  • High GDP growth rate, rapidly growing vehicle population and better road infrastructure will drive consumption of petroleum products

    • Industry is expected to grow at a CAGR of about 8% to 10%

    • Over 190 MMT of refining capacity required by 2010

  • Over 120MMSCMD of additional demand for Natural Gas in the next five years

    • Recent gas finds and increased use of gas for power generation, petrochemicals, fertilisers and city gas distribution


  • Several areas of unexploited potential, including:

    • City gas distribution

    • LNG (import) infrastructure - terminals, regasification, pipelines to industrial consumers

  • Growing demand-supply mismatch provides opportunities for investment in the entire value chain for petroleum (refining, product pipelines, storage and retail) and Natural Gas

  • Investment need of $15 billion and $8 billion estimated in refining and marketing respectively by 2010

For additional information: Ministry of Petroleum & Natural Gas (

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