Parliament Questions Oil & Gas Sector's Poor Return on Investment

A parliamentary committee has expressed concerns over rising capital expenditures in India's oil and gas sector not translating into higher domestic production. Despite increased investments, crude oil output is expected to decline to 28.7 million metric tonnes (MMT) in 2024-25 from 34.2 MMT in 2018-19.

The committee has asked the petroleum ministry to submit a detailed report explaining how recent exploration reforms and newly awarded blocks will help raise production. The panel noted that capital expenditure by petroleum and natural gas public sector undertakings (PSUs) rose from Rs 1.3 lakh crore in 2020-21 to a projected Rs 1.7 lakh crore in 2024-25.

The Centre approved the Rs 84,000 crore Samudra Manthan national offshore exploration scheme to step up deepwater oil and gas exploration and reduce India's dependence on imported crude. The committee said it was important that higher investments result in measurable gains in domestic production.