Stormy43P6 at 03:09, 2 August 2025

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{{MOS|date=May 2024}}
The '''history of the Indian oil industry''' extends back to the period of the [[British Raj]], at a time when [[petroleum]] first became a primary global energy source.

==Colonial rule, 1858-1947==
1866 : Oil discovery at Nahorpung, Assam. Not explored. 1882 : Big "Oil Seepage" in Digboi during construction of Dibrugarh-Ledo Railway Line. The first oil production started in India in 1889 near the town of [[Digboi]] in the state of [[Assam]]. A Small thatched structure was erected and christened "Oil well no.1" or "Discovery".<ref name=TERI>{{cite web
|url=http://edugreen.teri.res.in/explore/n_renew/digboi.htm
|title=Digboi: The First Oil Well in India
|work=EduGreen
|publisher=The Energy and Resources Initiative
|accessdate=23 July 2012
|archive-date=6 November 2016
|archive-url=https://web.archive.org/web/20161106200901/http://edugreen.teri.res.in/explore/n_renew/digboi.htm
|url-status=dead
}}</ref> This discovery came on the heels of industrial development. The Assam Railways and Trading Company (ARTC) had recently opened the area for trade by building a railway and later finding oil nearby. The first well was completed in 1890 and in 1893 first refinery started at Margharita, Assam.<ref>{{cite web |title=Digboi - the first oil well in India |url=edugreen.teri.res.in/explore/n_renew/digboi.htm |publisher=TERI |accessdate=22 September 2018}}</ref> The [[Assam oil|Assam Oil Company]] was established in 1899 to oversee production. In 1901, Digboi Refinery was commissioned supplanting the earlier refinery at Margharita. At its peak during the Second World War the Digboi oil fields were producing 7,000 barrels per day.{{citation needed|date=July 2012}}. In the year 1909, IBP ([[Indo Burmah Petroleum]]) was incorporated in [[Yangon|Rangoon]] to explore oil wells that had been discovered in Burma and Assam.<ref>{{cite book |last1=Viswanath |first1=S.N. |title=A Hundred Years of Oil: A Narrative Account of the Search for Oil in India |date=1 July 1990 |publisher=Vikas Publications |isbn=070694917X }}</ref>

Oil in [[colonial India]] was mostly exploited by a number of British companies with intricate alliances. Their output began to increase during the first and second world wars to support British troops and industries in the [[United Kingdom]].<ref>{{cite book |last1=Venugopal |first1=Sajith |title=The economics of petroleum exploration and development in INDIA: Analysing the Fiscal Regime of the Indian Petroleum Sector |date=16 October 2009 |publisher=VDN Verlag |isbn=978-3639203059 }}</ref>

In 1928, Asiatic Petroleum Company ( India) started cooperation with Burmah Oil Company. This alliance led to the formation of Burmah-Shell Oil Storage and Distributing Company of India Limited. Burmah-Shell began its operations with import and marketing of Kerosene. On 24 January 1976, the Burmah Sell was taken over by the Government of India to form Bharat Refineries Limited. On 1 August 1977, it was renamed as Bharat Petroleum Corporation Limited.<ref name=Thirtankar>
{{cite journal
|last=Roy |first=Tirthankar
|date=Summer 2002
|title=Economic History and Modern India: Redefining the Link
|journal=The Journal of Economic Perspectives |publisher=American Economic Association
|volume=16 |issue=3
|pages=109–130
|doi=10.1257/089533002760278749 |jstor=3216953
|doi-access=free
}}</ref>

==Independence, 1947-1991==
After [[Partition of India|India won independence in 1947]], the new government moved to a less exploitative system, often termed as License Raj. In terms of economic policy this meant a far bigger role for the government and little or no role for the private sector. This resulted in a bureaucratic system that meant a large public sector and focus on centralized planning.<ref name=Panagariya2008>
{{cite book
|last=Panagariya|first=Arvind
|authorlink=Arvind Panagariya
|title=India: The Emerging Giant
|publisher=[[Oxford University Press]]
|year=2008
|isbn=978-0-19-531503-5
|page=514
}}</ref>

The foreign companies continued to play a key role in the oil industry. [[Oil India Limited]] was still a joint venture involving the [[Indian government]] and the British owned [[Burmah Oil Company]] (presently, [[BP]]) whilst the Indo-Stanvac Petroleum project in West Bengal was between the Indian government and the American company [[SOCONY-Vacuum]] (presently, [[ExxonMobil]]).<ref name=ONGC>
{{cite web
|url=http://www.ongcindia.com/history.asp
|title=History
|publisher=Oil and Natural Gas Corporation Limited
|accessdate=23 July 2012
}}</ref> This changed in 1956 when the government adopted an industrial policy that placed oil as a “schedule A industry” and put its future development in the hands of the state.<ref name=ONGC/> In October 1959 an Act of Parliament was passed which gave the state owned [[Oil and Natural Gas Commission]] (ONGC) the powers to plan, organise, and implement programmes for the development of oil resources and the sale of petroleum products and also to perform plans sent down from central government.

In order to find the expertise necessary to reach these goals foreign experts from West Germany, Romania, the US, and the Soviet Union were brought in.<ref name=ONGC/> The Soviet experts were the most influential and they drew up detailed plans for further oil exploration which were to form part of the second five-year plan. India thus adopted the Soviet model of economic development and the state continues to implement five-year plans as part of its drive towards modernity.<ref>
{{cite journal
|title=The Rise and Fall of Indian Socialism
|first=Sam|last=Staley
|url=http://reason.com/archives/2006/06/06/the-rise-and-fall-of-indian-so
|journal=[[Reason (magazine)|Reason]]
|date=June 2006
}}</ref> The increased focus on exploration resulted in the discovery of several new oil fields most notably the off-shore Bombay High field which remains by a long margin India's most productive well.<ref name=ONGC/>

==Liberalisation, 1991-present==
The process of [[economic liberalisation in India]] began in 1991 [[1991 Indian economic crisis|when India defaulted on her loans]] and asked for a $1.8 billion bailout from the [[International Monetary Fund|IMF]].<ref>[http://www.globaleconomicgovernance.org/wp-content/uploads/Ghosh%20-%20India.pdf India's Pathway through Financial Crisis] {{webarchive|url=https://web.archive.org/web/20111112080531/http://www.globaleconomicgovernance.org/wp-content/uploads/Ghosh%20-%20India.pdf|date=2011-11-12}}. [[Arunabha Ghosh]]. Global Economic Governance Programme. Retrieved on 2 March 2007.</ref> This was a [[trickle-down economics|trickle-down effect]] of the culmination of the [[The Great Game#Post WW2 and Cold war as Great Game II|cold war]] era; marked by the [[Dissolution of the Soviet Union|1991 collapse]] of the Soviet Union, India's main trading partner. The bailout was done on the condition that the government initiate [[Economic liberalisation in India|further reforms]], thus paving the way for India's emergence as a free market economy, which would open up its markets to western companies.<ref name="Gandhi-1">{{cite news |title=That old Gandhi magic |date=27 November 1997 |newspaper=The Economist |url=https://www.economist.com/asia/1997/11/27/that-old-gandhi-magic}}</ref>

For the ONGC this meant being reorganised into a public limited company (it is now called for Oil and Natural Gas Corporation) and around 2% of government held stocks were sold off.<ref name=ONGC/> Despite this however the government still plays a pivotal role and ONGC is still responsible for 77% of oil and 81% of gas production while the Indian Oil Corporation (IOC) owns most of the refineries putting it within the top 20 oil companies in the world.<ref name=SAM>
{{cite web
|url=http://csis.org/files/media/csis/pubs/sam98.pdf
|title=India's Energy Dilemma
|work=South Asia Monitor
|publisher=[[Center for Strategic and International Studies]]
|date=7 September 2006
|first=Vibhuti|last=Haté
}}</ref> The government also maintains subsidised prices.<ref name=SAM/> As a net importer of oil however India faces the problem of meeting the energy demands for its rapidly expanding population and economy and to this the ONGC has pursued drilling rights in Iran and Kazakhstan and has acquired shares in exploration ventures in Indonesia, Libya, Nigeria, and Sudan.<ref name=SAM/>

India's choice of energy partners however, most notably Iran led to concerns radiating from the US.<ref name=SAM/> A key issue today is the proposed gas pipeline that will run from Turkmenistan to India through politically unstable Afghanistan and also through Pakistan.<ref name=SAM/> However, despite India's strong economic links with Iran, India voted with the US when Iran's nuclear program was discussed by the International Atomic Energy Agency although there are still very real differences between the two countries when it comes to dealing with Iran.<ref name=SAM/>

==See also==
{{Portal|Energy|India}}
* [[History of the petroleum industry in Canada]]
* [[History of the petroleum industry in the United States]]

==References==
{{reflist}}

[[Category:History of the petroleum industry by country|India]]
[[Category:Petroleum industry in India]]
[[Category:Industrial history of India]]

History of the oil industry in India - Revision history

Stormy43P6 at 03:09, 2 August 2025