ONGC's lower output may trip India's 11th plan target

Lower than planned crude oil output by Oil and Natural Gas Corporation (ONGC) is likely to trip India's 11th Five-Year plan target of producing 207 million tonnes of oil even as fuel demand is projected to rise at greater pace than previously anticipated.

"There would be an overall shortfall of about 10 per cent in crude oil production," Planning Commission said in mid-term appraisal of the 11th Plan (2007-2012).

State-owned ONGC had targeted 140.06 million tonnes of oil in the five-year period but going by actual output in 2007-08 and 2008-09, it may end up with only 129.08 million tonnes.

Oil India's (OIL) 18.09 million tonnes anticipated crude production would be marginally lower than planned 18.99 million tonnes.

Overall, crude oil production in 2007 to 2012 is anticipated at 186.86 million tonnes as opposed to a target of 206.73 million tonnes.

"Corrective measures for oil production need to be taken to enhance the production by ONGC and OIL to meet the targets," it said.

The Planning Commission said delay in start of oil production from Cairn India's Barmer field was one of the reasons for the shortfall. Cairn began oil production from Barmer in August 2009.

Natural gas production "is likely to be 4.5 per cent lower than the target because of delay in completion of KG basin gas discovery by Reliance", it said.

Reliance began gas production from Krishna Godavari basin D6 field on April 1 and had production facilities in place to ramp up output to nearly 80 million standard cubic meters per day (mmscmd) but was forced to produce at lower rates as customes like NTPC did not take their allocated quantities.

It is currently production 60-62 mmscmd of gas.

The 11th Plan had targeted gas production of 255.76 billion cubic meters (bcm) but would end with 243.52 bcm output.

"While the gas production targets during the balance period of 11th Plan could be enhanced by RIL to cover the shortfall, a matching transportation infrastructure would be necessary," the Commission said.

The mid-term appraisal said petroleum product consumption has grown at higher rate than previously anticipated. The 11th plan had estimated that fuel demand would reach 131.8-141.8 million tonnes by the terminal year (2011-12), against 120.74 million tonnes demand in 2006-07.

But higher growth rates in first two years of the plan have led to revision in the anticipated consumption in 2011-12 to 152.91 million tonnes, it said.