The Indian government continues to hold licensing rounds in an effort to promote exploration activities and boost domestic oil production.
According to Oil & Gas Journal (OGJ), India had approximately 5.7 billion barrels of proven oil reserves as of January 2011, the second-largest amount in the Asia-Pacific region after China. India's crude oil reserves tend to be light and sweet. India produced roughly 950 thousand barrels per day (bbl/d) of total liquids in 2010, of which 750 bbl/d was crude oil. The country consumed 3.2 million barrels per day (bbl/d) in 2010.
The combination of rising oil consumption and relatively flat production has left India increasingly dependent on imports to meet its petroleum demand. In 2010, India was the world's fifth largest net importer of oil, importing more than 2.2 million bbl/d, or about 70 percent of consumption.
A majority of India's crude oil imports come from the Middle East, with Saudi Arabia and Iran supplying the largest shares. Iranian oil's share of Indian imports has decreased in recent years, largely due to issues with processing payments.
Though the government has taken steps in recent years to deregulate the hydrocarbons industry and encourage greater foreign involvement, state-owned enterprises predominate in India's oil sector. The largest player is state-owned Oil and Natural Gas Corporation (ONGC), which accounted for about three-quarters of India's oil production in 2009-2010.
The role of private companies in Indian oil production is increasing. The largest private actor in the oil sector is Reliance industries, India's largest company.
As a net importer of oil, the Indian government has policies aimed at increasing domestic exploration and production (E&P) activities. In an effort to attract oil majors with deepwater drilling experience and other technical expertise, the Ministry of Petroleum and Natural Gas created the New Exploration License Policy (NELP) in 2000, which for the first time permits foreign companies to hold 100 percent equity ownership in oil and natural gas projects. Despite this, international oil and gas companies currently operate a small number of fields.
India's downstream sector is also dominated by state-owned entities. The Indian Oil Corporation (IOC) is the largest state-owned company in the downstream sector, operating eight of India's 21 refineries and controlling about three-quarters of the domestic oil pipeline transportation network. Government-run Oil marketing companies (OMC's) play a major role in the distribution of fuel. Reliance Industries opened India's first privately-owned refinery in 1999, and has gained a considerable market share in India's oil sector.