KOLKATA (miningweekly.com) – Responding to sluggish growth in domestic oil and natural gas production, the Indian government has brought national oil companies (NOCs) under stricter oversight, including daily reporting of production data from each field operated by these companies.

The NOCs also have to submit to government data relating to reservoir production and performance every six months and to report the reserves of each field in operation once a year, according to one of a series of orders issued to NOCs over the past month.

Another order directs that the “advice and decision of the review committee should be implemented forthwith by the NOCs and progress of implementation reported through the upstream regulator – the Directorate for Hydrocarbons.”

“Apart from submission of technical data on reservoir performance, NOCs will immediately notify any discovery, and detailed timelines, for subsequent processes like declaring a find commercially viable, and submission of a field development plan,” another directive notes.

The oversight of NOCs comes against a backdrop of India’s crude oil recovery averaging between 23% and 27% and gas recovery ranging between 47% and 54%. This against an international recovery average of 35% to 40% for crude oil and 55% to 70% for natural gas.

The poor performance of NOCs, led by ONGC and Oil India, is a concern for the government considering that these companies operate fields secured through the nomination route and not through competitive bidding, as is the case for private oil and gas producers.

The government in 2015 announced it would reduce the country’s import dependency for oil and natural gas from 77% to 10% by 2022. However, since the target was set, oil and natural gas import dependency has actually increased to 81%, government officials said.

According to provisional data released by the Petroleum and Natural Gas Ministry, India's cumulative crude oil production during April to May 2017 has been estimated at 6038.33-thousand metric tons, which was 1.16% lower than the target set by the government.

Natural gas production for the same period has been estimated at 5.30-billion metric standard cubic metres, a marginal increase of 30.04% over the target set by the government.

While no official correlation is being drawn by the government between the sluggish growth in domestic production of crude oil and natural gas and the forecast changing energy portfolio, the draft National Energy Policy (NEP) states that coal will continue to dominate domestic energy demand.

According to the NEP, the share of coal in India’s commercial energy supply continues to hover at about 54% by 2040. In 2015/16, coal comprised 55% of the energy mix.

The NEP forecasts that coal-based generation capacity will rise from almost 195 GW in 2017 to around 441 GW in 2040. In the shorter term, the document states that between 2017 and 2027, coal-based generation will rise from 197 GW in 2017 to 249 GW in 2022. However, by contrast, natural gas-based power generation will almost stagnate at around 25 GW in 2017 to a maximum of 29 GW in 2022.