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Gunmen abducted early on Wednesday three employees of India’s Oil and Natural Gas Corporation (ONGC) on a rig site in northeast India, the country’s biggest oil and gas production firm said in what could be a setback for the Indian efforts to reduce its reliance on crude oil imports.
The abduction took place on a rig site of ONGC in the Lakwa field in the state of Assam, which is one of the three largest oil-producing states in India. Security-related issues at domestic producing oilfields could undermine India’s efforts to reduce its reliance on foreign oil.
India, which relies on crude oil imports for more than 80 percent of its consumption, has plans to cut the dependence by 10 percent by 2022.
ONGC said it had lodged a complaint with the local police about the kidnapping, but did not comment on whether the incident would affect oil production at the site.
Due to the pandemic that shut down some oilfields, India’s oil production dropped by 5 percent year over year in the fiscal year between April 2020 and March 2021.
According to data from the Petroleum Planning & Analysis Cell (PPAC), the volume of India’s crude oil imports fell by 12.7 percent between April 2020 and March 2021 compared to the same period of the previous fiscal year. In terms of value, India spent US$61.9 billion on crude oil imports in April 2020-March 2021, down from US$101.4 billion in 2019/2020.
While some of the lower import bill was due to the lower imported volumes, most of the drastic decline in India’s spending on crude was because of the ultra-low oil prices in the spring of 2020. Back then, India—and the other major importer in Asia, China—embarked on a buying spree to stock up on low-priced crude.
India’s sensitivity to high oil prices resulted in the government asking Indian state refiners to aggressively diversify oil imports away from the Middle East and its oil kingpin Saudi Arabia.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.