India Ratings and Research (Ind-Ra) has published the May 2019 edition of its credit news digest on India’s oil and gas sector. The report highlights the trends in the sector, with a focus on domestic production, import, consumption, refining and gross under-recovery, regulatory changes and recent rating actions.

In April 2019, the liquefied natural gas (LNG) imports increased 9.7% yoy and 13.4% mom to 83mmscmd. This increase follows a five-month period of lower year-on-year imports observed during November 2018 till March 2019, wherein the average LNG imports were 10.4% lower at 69.5mmscmd than the corresponding five-month period last year.

The recovery can be largely attributed to a gradual decline in Henry Hub gas prices to USD2.6/mmbtu in April 2019 from USD4.1/mmbtu in November 2018, owing to global supply demand equations. The historical trends also largely indicate that LNG imports have increased on a reduction in Henry Hub prices (Figure 1). The 0.3% yoy reduction in domestic NG production in April 2019 coupled with 4.2% yoy increase in consumption demand seems to have driven the increase in LNG imports.

The Henry Hub prices stood stable at USD2.6/mmbtu in May 2019, which could have kept the LNG imports largely stable during the month.

In April 2019, crude oil production in India decreased 6.9% yoy. During the month, the production volumes of Oil and Natural Gas Corporation and Oil India Limited declined 4.9% yoy and 3.9% yoy, respectively, and that of fields under production-sharing contracts fell 12.4% yoy.

In April 2019, crude oil import volume grew 14.1% yoy and India’s crude oil import dependency was 86.8%. The price of Brent Crude averaged USD71.5/bbl during April 2019 as against USD71.3/bbl during April 2019 and USD77.0/bbl during May 2018.

Refining throughput increased 4.3% yoy to 20.7mmt during April 2019 and was up 2.1% yoy at 257.2mmt during FY19. India’s petroleum product output grew 4.3% yoy to 21.0mmt in April 2019. On a cumulative basis, the production was up 3.1% yoy during FY19.

Source: Petroleum Planning & Analysis Cell and Ministry of Petroleum and Natural Gas

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Analyst Names

  • Ashish Agarwal

    Analyst

    033 40302509

    Vivek Jain

    Director
    +91 11 43567249

    Media Relation

    Namita Sharma

    Manager – Corporate Communication
    +91 22 40356121