Untitled

What India’s gas numbers are really telling us

In December, India’s gas data did something markets are not supposed to do.

Supply went down. Consumption went up.

This wasn’t a data glitch. It was a mirror held up to how India’s gas system now works.

The contradiction

Official data shows:

– Domestic gas production fell 4.2% year-on-year – LNG imports declined 0.7% – Gas available for sale dropped 2.6%

Yet:

– Total gas consumption rose 2.9%

In a real market, this doesn’t happen.

There was no hidden supply

Nothing mysterious filled the gap.

– Net gas for sale stayed around 83% of gross production – LNG imports were lower, not higher – No inventory drawdowns or accounting tricks

The answer lies in who consumed gas, not where it came from.

Some sectors are protected

Consumption rose because priority sectors were insulated.

In December:

– Fertiliser took nearly 30% of total gas demand – City Gas Distribution grew over 8% year-on-year – Petrochemicals increased consumption by more than 9%

These sectors expanded even as total gas availability shrank.

Others absorbed the cuts

To make that possible, other sectors stepped back.

– The “Others” category fell more than 12% – Refinery gas use is down sharply on a cumulative basis – Power demand spiked briefly, but remains well below last year overall

Demand didn’t grow. It was reassigned.

Power demand gives the game away

Gas use in power jumped in December.

But over April to December, power sector gas consumption is still far lower than last year.

Gas shows up in power generation only when something breaks — coal shortages, grid stress, policy intervention.

That isn’t market demand. That’s manufactured demand.

LNG makes this unavoidable

Here’s the structural reality:

Imported LNG is now the single largest source of gas in the system.

When gas is imported, every molecule has to be allocated. There is no surplus drifting around, looking for buyers.

Allocation replaces price discovery.

Geography tells the same story

Most gas is consumed in a handful of states:

– Gujarat – Uttar Pradesh – Maharashtra

That reflects pipelines, city gas networks, and old industrial clusters — not nationwide demand growth.

What the numbers really say

December’s data doesn’t show a gas market responding to prices or abundance.

It shows:

– Protected sectors holding or growing consumption – Flexible sectors being squeezed – Power acting as a swing consumer – LNG anchoring a constrained system

Headline demand growth survives through policy, not economics.

Bottom line

India’s gas market is no longer about producing or importing more gas.

It’s about deciding who gets to keep using gas when there isn’t enough to go around — and keeping demand numbers looking healthy while doing it.

That’s the uncomfortable truth hidden in December’s data.

Source: Indian Petroplus

After months of execution stress in Mumbai offshore pipeline projects, ONGC is once again using nomination-based contracting.

At first, it may seem counterintuitive. ONGC has faced challenges with offshore contracts awarded via nomination in the past. But this time, the approach is different — more disciplined, more controlled, and risk-focused.

Execution Stress in Mumbai Offshore

The Mumbai offshore pipeline replacement programme is a multi-year effort to replace ageing subsea pipelines carrying:

Well fluids

Gas lift

Water injection

These pipelines are critical for production continuity and safety.

Recent delays in contracts with Mazagon Dock Shipbuilders — including mobilisation issues, vessel readiness problems, and pipelaying slippages — highlighted that execution risk had become the main concern.

From Warnings to Enforcement

ONGC initially monitored progress through routine follow-ups. As delays persisted, it escalated to formal warning letters and termination notices.

This is rare for PSUs and indicates that execution deadlines were non-negotiable.

Extensions Without Compromise

Despite the tough stance, ONGC extended deadlines for two major packages:

PRPP → 31 January 2026

PRP-8A → 31 May 2026

Extensions were tactical — aimed at preventing programme stalls — without relaxing accountability.

Critical Pipelines Isolated

A fresh tender was issued for critical Mumbai offshore pipelines:

~29 km of subsea lines

Riser replacements

Live platform tie-ins

Full pre-commissioning

The tender is on a nomination basis, with only L&T invited. This is a formal tender, not an emergency workaround — a significant step in transparent, disciplined nomination.

Why This Nomination Is Different

A formal clarification cycle addressed bidder concerns about:

Liquidated damages

Currency denomination

Insurance extensions

Arbitration terms

Manpower and equipment rates

ONGC’s response was consistent: procedural corrections accepted, no compromise on accountability.

This is nomination with strict responsibility, not flexibility.

Lessons from Mazagon Dock Contracts

Earlier, ONGC spent months pushing mobilisation via reminders, warnings, and interface management.

Now, by isolating critical pipelines into a standalone LSTK package, ONGC:

Minimizes interface risk

Fixes accountability clearly

Enforces milestones contractually

Bottom Line

Only L&T is nominated — intentionally.

The bigger takeaway? ONGC is evolving offshore risk management. This is nomination with scars — and sharper teeth.

Source

Bharat Petroleum Corporation Ltd (BPCL) has quietly taken an important step with the discovery of unconventional oil in Abu Dhabi’s Onshore Block 1. While the development may not appear dramatic at first glance, it reflects a strategic shift in how Indian oil companies are building overseas upstream capabilities.

According to Indian PetroPlus, the discovery was made by BPCL’s exploration arm, Bharat PetroResources Limited (BPRL), after nearly seven years of exploration work and an investment of around 166 million dollars. This highlights the long timelines and high risks involved in frontier oil and gas exploration.

Why this discovery matters

What makes this discovery notable is its unconventional nature. The first oil flow from the XN-76 well in the Shilaif formation was achieved after hydraulic fracturing. This places BPRL among a small group of Indian public sector companies with direct operational experience in unconventional oil reservoirs.

Most overseas investments by Indian oil public sector companies have traditionally been minority stakes in producing or near-producing conventional assets. In contrast, the Abu Dhabi block positions BPCL as an operator, responsible for geology, drilling, and production strategy in a technically complex environment.

The project’s overall risk profile improves with a second, conventional oil discovery in the Habshan reservoir through the XN-79 02S well, which flowed crude during testing.

Scale, control, and strategic flexibility

The concession covers a large 6,162 square kilometre area and grants 100 percent concession rights to BPCL’s joint venture vehicle, Urja Bharat Pte Limited. Such ownership control is rare for Indian public sector companies in overseas upstream projects.

This gives BPCL the flexibility to phase development, bring in partners at a later stage, or monetise the asset when conditions are favourable. The company has stated that the next phase will focus on appraisal drilling to establish commercial viability, which is especially critical for unconventional oil projects.

Implications for BPCL and India

For BPCL, the discovery strengthens its upstream portfolio at a time when refining and fuel marketing earnings remain cyclical and exposed to policy intervention. Although production from the Abu Dhabi block is still several years away, successful appraisal could add long-term reserves and reduce dependence on downstream businesses.

For India, the discovery supports the country’s strategy of improving energy security through overseas equity oil, particularly in politically stable regions such as the UAE. Equity oil offers greater long-term supply security compared to spot crude imports.

Looking ahead

The future of the project will depend on appraisal results, development costs, and oil price trends. Unconventional resources require sustained capital investment and strong operational discipline. If BPCL can deliver consistent well performance, the Abu Dhabi asset could become a meaningful overseas growth engine.

As noted by Indian PetroPlus, the discovery marks a subtle but important transition from Indian oil companies being passive overseas investors to active upstream operators in one of the world’s most competitive hydrocarbon regions.

Why a narrow concentration matters more than the headline volume

The additional RLNG requirement of 7,01,758 MMBtu for February 2026 is concentrated in just three urea manufacturing units. This shows where balancing pressure in India’s fertiliser gas system actually lies.

This is not a nationwide gas shortage. It is a plant-specific adjustment handled through the gas pooling mechanism.

The Three Plants Absorbing the Entire Increment

IFFCO Phulpur I and II: 1,96,000 MMBtu

IFFCO Aonla I and II: 3,81,893 MMBtu

GSFC Baroda: 1,23,865 MMBtu

These three plants account for 100 percent of the incremental RLNG requirement for February 2026. No other fertiliser units appear in this additional demand window.

What This Reveals About Gas Balancing Pressures

Gas shortfalls are not evenly distributed across fertiliser plants

Certain legacy or high-throughput units are drawing disproportionately on pooled RLNG

The pooling framework is acting as a precise intervention tool, not a broad supply augmentation mechanism

This shows that upstream allocation and downstream utilization mismatches persist at specific points of the fertiliser network.

Firm Supply Remains Limited Despite Allocation

Only 40 percent of allocated volumes carry guaranteed offtake. The remaining 60 percent are on “reasonable endeavour” (RE) terms.

Suppliers carry utilization risk on most volumes

Fertiliser plants can choose whether RE volumes are lifted

Incremental demand does not translate into firm supply commitments

Why These Plants and Not Others

All three units are large, gas-intensive urea plants

The requirement is for operational balancing, not capacity expansion

Other plants manage within existing allocations or alternative sourcing

The absence of newer units suggests incremental pooling is stabilizing specific legacy assets.

A Signal for Future Pooling Behaviour

Fertiliser gas pooling is increasingly reactive and plant-specific

Incremental RLNG calls are likely to appear as clustered events

Suppliers should expect episodic requests rather than predictable monthly demand

For policymakers, gas pooling is now compensating for structural asymmetries within the fertiliser fleet, not just seasonal smoothing.

Source: Indian PetroPlus

India hasn’t reached this stage yet, but global trends in methane regulation are sending a clear warning. Pipeline gas venting is moving from a small operational issue into a real compliance challenge. Reporting emissions is no longer enough—regulators are starting to focus on the actual hardware that releases methane.

Currently, PNGRB regulations don’t set clear limits on methane released during valve operations, compressor station activity, or emergency shutdowns. Vented gas is acknowledged, but rarely measured or audited. For now, compliance is mostly paperwork.

Globally, methane rules are evolving beyond annual reports and intensity metrics. Regulators now want to know where methane leaks, how often it happens, and through which equipment. This shifts attention to valves, actuators, and control systems—hardware that can cumulatively release significant methane across a network.

Large pipeline valves vent gas each time they operate. One event may seem small, but across multiple stations and emergency systems, the emissions add up quickly, especially in high-capacity networks.

As regulations tighten, explanations like “industry standard practice” or “old design” will no longer be enough. Operators will need systems that capture and re-inject vented gas, maintain safe operation, and eliminate routine venting. The technology exists, but retrofitting requires planning.

This is an early signal for Indian gas operators. Pipeline gas venting is no longer just a background detail—compliance will soon depend on how well the hardware prevents emissions, not just on what gets reported.

India’s gas sector may be on the brink of change. The Petroleum and Natural Gas Regulatory Board (PNGRB) hasn’t issued new LNG regulations, but its latest analytical papers are drawing serious attention.

While no formal rules have been announced, the documents suggest a shift in focus toward LNG regasification, pricing, transparency, and downstream delivery.

What PNGRB Is Looking At

Paper 1:

LNG regasification capacity vs actual utilisation

Pricing behaviour despite weak demand

Financial outcomes at key LNG nodes

Paper 2:

Downstream logistics and trucking vs pipeline economics

How infrastructure sequencing affects delivered gas costs

Both papers highlight a shared concern: market outcomes are not aligning with policy intent, even after years of capacity growth.

Key Takeaways

1️⃣ LNG Regasification Under Scrutiny Low utilisation, firm charges, and resilient returns suggest PNGRB may treat terminals as outcome-sensitive infrastructure, not just commercial ventures.

2️⃣ Regas & Truck-Loading Charges Could See Oversight Fees that remain unregulated are affecting delivered gas prices and demand — signalling potential future regulation or tighter scrutiny.

3️⃣ Transparency First Opaque pricing, unclear escalation, and limited cost visibility point toward mandatory disclosure — often the first step before regulation.

4️⃣ APM Allocation Distortions Subsidised APM gas interacting with market-priced LNG creates margin insulation and pricing distortions, hinting at a need to rethink allocation rules.

Why the Industry Is Watching Closely

The analysis itself isn’t controversial — but where it might lead is.

If LNG terminals are treated as infrastructure rather than entrepreneurial ventures, pricing freedom, expected returns, and investment logic could change.

PNGRB hasn’t acted yet — but the line is clear.

Bottom Line

No new rules have been announced. But one thing is clear: LNG terminal economics are now in PNGRB’s regulatory sight.

The next steps will determine whether this is a phase of scrutiny or the start of a more interventionist regime.

India’s oil PSUs are at a crossroads. With global energy markets evolving rapidly and technology disruptions redefining operations, leadership in India’s public sector oil companies is undergoing a transformation. Yet, the paths chosen by Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Ltd (HPCL) could not be more different — and the implications for future PSU management are profound.

IOC’s Project SPRINT: Precision and Elite Focus

IOC has taken a highly selective approach to leadership development. Under Project SPRINT, Chairman Arvinder Singh Sahney is grooming only 50–70 executives out of a workforce of 30,000 for top management and board-level positions.

The program emphasizes:

Cross-functional rotations: Leaders gain exposure across business verticals to build versatility.

Digital and behavioral evaluations: Ensuring candidates are future-ready, tech-savvy, and culturally aligned.

Cost and efficiency missions: Executives are expected to drive measurable improvements within their roles.

The results so far have been striking: a 20% reduction in operating expenses within months of launch, signaling that focused, high-impact leadership development can deliver tangible outcomes.

SPRINT’s philosophy is clear: leadership transformation is elite, selective, and designed to create visible exemplars within the organization. But it also raises questions — why did such a targeted program take until 2025 to materialize? Was previous HR policy too static, and what does this say about latent potential within the workforce?

HPCL’s ADC: Scale, Structure, and Accountability

While IOC bets on elite acceleration, HPCL is playing a different game. The company has launched its Assessment & Development Centre (ADC) model, a broad-based initiative targeting nearly 500 executives over two years.

Key features of HPCL’s ADC include:

Consultancy-driven execution: Only five firms — EY, Hay, KPMG, SHL, and Thomas Assessments — qualified to design and manage the program.

SLA-backed accountability: Reporting timelines, platform uptime, and participant satisfaction (>75%) are all monitored with strict penalties for non-compliance.

Digital management: Leadership assessments are fully traceable, measurable, and linked to actionable outcomes.

HPCL’s approach is systemic and procedural. While IOC focuses on speed and charisma, HPCL emphasizes process, scale, and traceability, ensuring that leadership evaluation is measurable and auditable across multiple cities and business units.

Two Philosophies, One Destination

The contrast between IOC and HPCL is stark:

IOC Project SPRINT

HPCL ADC

Elite, inward-looking

Broad-based, process-driven

Speed and agility

Systemic evaluation and auditability

Culture reset & charisma

Digital tracking & procedural discipline

Both aim to future-proof leadership, but their methods reflect fundamentally different management philosophies. IOC bets on elite selection and high-impact change, while HPCL bets on structure, scale, and consistent evaluation.

What This Means for India’s PSUs

These initiatives reveal deeper truths about leadership and HR resilience in India’s oil PSUs:

IOC achieved 20% cost savings and identified 70 potential leaders in months — highlighting opportunities missed under previous frameworks.

HPCL relies on external consultants and SLAs to enforce discipline — suggesting that internal HR systems require support for large-scale, structured evaluation.

In effect, India’s refining PSUs are relearning management the hard way, turning reform into a competitive sport. The ultimate winner — whether IOC’s agility or HPCL’s structured accountability — will define the next generation of PSU leaders.

Lessons for Industry Professionals

For corporate leaders, investors, and policymakers, the story is not just about HR practices — it’s about organizational strategy and performance. Key takeaways include:

Elite vs broad evaluation: Both approaches have strengths; selectivity drives speed, while systemic assessment ensures reliability.

Agility vs auditability: Speed and charisma can catalyze change, but structured processes ensure long-term sustainability.

Digital readiness matters: Both programs embed digital evaluation, signaling a shift toward technology-enabled leadership assessment.

Understanding these philosophies provides insights into how India’s top PSUs are future-proofing talent, improving efficiency, and building resilience against global and domestic market pressures.

Why You Should Follow This Story

The IOC vs HPCL leadership race offers lessons for anyone involved in corporate strategy, HR, or energy sector management:

Learn how top PSUs identify and groom leaders for tomorrow’s challenges.

Understand the impact of leadership programs on operational efficiency and cultural transformation.

Access actionable insights that can guide leadership strategies in other organizations.

The Indian Petroplus Advantage

For industry professionals who want to stay ahead, Indian Petroplus provides:

Exclusive coverage of PSU leadership reforms.

Detailed comparisons, insider insights, and actionable takeaways.

Early access to trends shaping India’s oil and gas leadership landscape.

Indian Oil Adani Gas Pvt Ltd (IOAGPL), one of India’s largest city gas distribution companies, is riding a volume wave—but behind the surge lies a story of margin compression, trimmed capital spending, and lingering performance guarantee obligations.

Revenue up, margins squeezed In FY25, IOAGPL’s revenue jumped ~47% to Rs 2,654 crore on higher gas offtake. Yet EBITDA margins slipped to ~10%, compared to the healthier 13–15% band, as a lower allocation under the Administered Price Mechanism (APM) pushed up procurement costs. Analysts expect margin recovery only from FY26, provided APM allocations normalize.

Capex scaled back by Rs 1,100 crore Planned capex has been cut sharply. Projects under execution now stand at Rs 3,674 crore, down from Rs 4,770 crore earlier. While debt tie-ups are secured, coverage metrics are still described as “modest” during the rollout phase.

Performance guarantees: exposure remains high IOAGPL carries performance bank guarantee (PBG) exposure of Rs 6,968 crore. Around 60% release has been sought in legacy GAs where work is completed, but in the 9th and 10th round areas, PNG-Domestic connections remain below target. A significant chunk of guarantees is therefore still tied to future execution.

Why the rating holds Supportive sponsor covenants on Compulsorily Convertible Debentures and exclusivity rights (5–8 years marketing, 25 years network) continue to provide stability. Trunk pipeline connectivity across 19 GAs adds further resilience.

The takeaway Volumes are rising, but profitability is policy-sensitive, capex has been trimmed by ~Rs 1,100 crore, and PBG risks remain live. Execution discipline over the next two years will be the fulcrum on which outcomes swing for IOAGPL, its lenders, and investors.

Contact IndianPetroPlus Email: [email protected]

Cairn Oil & Gas, the upstream arm of Vedanta Limited, has issued an unusual call for a China-based intermediary to facilitate access to rigs, upstream technology, and service providers. The move, linked to its planned $4-billion capex rollout in India, has raised questions in both commercial and policy circles.

Instead of engaging Chinese OEMs or national oil companies directly, Cairn has invited proposals from “experienced agencies” with insider networks across China’s oil and gas ecosystem. Industry observers point out that such reliance on a middleman suggests challenges in navigating Beijing’s approvals and regulatory frameworks, and raises red flags around transparency.

Adding to concerns is the format of the request. Rather than following Vedanta’s standard e-procurement procedures, Cairn has asked interested parties to submit responses directly to its Director Projects, Pravin Kumar, via email. Such informality is unusual for a promoter of Vedanta’s size and could invite scrutiny from regulators and financiers, particularly given India’s tightened stance on Chinese linkages in sensitive sectors.

Commercial risks also loom large. By institutionalizing an intermediary, Cairn could be ceding pricing leverage at a time when upstream cost efficiency is critical. Investors and partners may question why a $30-billion group requires external facilitation for China sourcing, instead of building its own in-house engagement capability.

The implications extend beyond Cairn. If a middleman becomes the permanent gatekeeper for Chinese technology and service access, EPC bidders and oilfield service companies could face higher costs and restricted vendor access across the company’s upstream portfolio.

According to Cairn’s outreach document, the targeted areas of Chinese expertise include rigs and drilling, oilfield technologies, and integrated project delivery. The agency is expected to act as Cairn’s representative in China, connecting with NOCs, service providers, and technology developers.

While the $4-billion investment plan remains a growth opportunity for India’s upstream sector, the choice of sourcing route has sparked industry-wide debate. The move underscores the tension between commercial imperatives, supply-chain realities, and the geopolitical sensitivities of India-China engagement.