Major Challenges Faced by Oil and Gas Sector in India

Major Challenges Faced by Oil and Gas Sector in India


The Oil and Gas sector is the eighth-core industries in India. India’s economic growth isthe majority driven by fossil fuel and Oil and Gas which is one of the major sources of the resources in energy mix. India is the second -largest refiner in Asia as of April 1, 2019, as a crude oil refining industry with an annual capacity of 249.40 MMT.1 India has been fourth- largest LiquefiedNatural Gas (LNG) importer since 2011 after Japan, South Korea, and China.1 The Government of India has adopted various policies included 100% percent of Foreign Direct Investment in many of the sectors which include Nature Gas, Petroleum Products, Refiners. It attracts both domestic and foreign investment attested by the presence of Reliance Industries Limited (RIL) and Cairn India. Nevertheless, challenges such as regulations, slacking Government policies, stagnant domestic production, and lack of intense participation from foreign and private oil and gas players likely hamper the growth of extent.

Major Challenges Face by Oil and Gas Sector in India

1. Minimizing costs to remain competitive

It is one of the essential challenges that the oil and gas industry is facing towards the production of refined industrial products of crude oil and refined industrial products at a lower cost. Consequently, enhancingthe environment and production on currently functioning sites is the need of an hour of oil and gas companies.

2.. Performance Improvement of Industry

Boost the life of mature sites has become a vital requirement for the oil and gas industry to continue their supply of Crude Oil and Gas. Industries are considered for new sources of transport, extraction and refining are certainly more expensive and complicated.

3. Meeting Environment  Regulations

The Oil and Gas industry isan essential consumer of water and energy resources due to which Industry has to maintain proper regulations of production, extraction, and distribution.

4. Aging Work Force

The Society of petroleum and engineers has estimated that 50 % of skilled workforce will retire in 5-7 years and companies have to bring new employees and contractor with less experience and unfamiliar with facility.

5. Equipment Reliability

Oil and Gas companies often use methods to increase equipment reliability and decrease downtime, especially unplanned downtime. Company Means time between Repair Replacement by running equipment at optional range recommended by original equipment manufacturer OEM.

6. Inspections

Oil and Gas Company require equipment for inspections on a daily, weekly, monthly

Unit’s basis. The Inspection often requires temporary any objective, moving equipment, operational reading, and ladder.

7. Large Scale Events

Large Scale Event includes Turn around, Shut-Down Equipment isolation, lockout events that require months of planning and require weeks or months as these start up and shut down events are most common times accident to occur. Oil and Gas companies find ways to save time which helps to keep the employee safe.

8. Spill Control

Spill and Leas are the most Public devastating events that Oil and Gas Company face as it is vitally important to supply quickly and effectively.

9. Improve collaboration with oilfield services to improve logistics

Oil giants like Chevron and ExxonMobil must depend on third- party suppliers to provide specialist equipment and expertise for different parts of the oil and gas supply chain. Oil and Gas companies, oilfield perform critical functions as a mistake caused by one company leads to devastating effect. Poor collaboration and communication slow down the process.  The author of the white paper said that Exploration and Production (E&P) Companies can work more effectively by taking advantage of such as cloud-based collaboration platforms they can share detailedplanning, standard inventory measurement, and forecast information process for workers in the field.

10. The rapid expansion of green technologies

The rapid expansion of green technologies like electrical energy sources and biofuel have decreased the use of Oil and Gas Industry. Therefore it is still difficult to replace liquid fuels and it will take time to phase out completely. The Oil and Gas industry is facing many challenges that will continue to be the most dynamic and important industries in the world.

11. Maintain in Team Morale

Maintain the morale of the team of the Oil and Gas Industry there should be certain factors that help to maintain the morale as remoteness of site locations & harsh working conditions affect the motivation level of team members to some extent. Team building exercises, interactive sessions and discussion forums need to be organized on a regular basis to maintain the camaraderie and boost morale.

Solution to overcome challenges

  1. Maximizing the value creation for improving the performance.
  2. Attracting skilled workforce to fill the gap and to develop the training and development program to retain the workforce and improve its performance.
  3. To find the various way the reduction environmental impact and climate change.
  4. A Fair share of the wealth to the local communities and society.
  5. Usage of best technological solutions like video systems and cyber security to overcome security challenges.
  6.  Ethical business practice and regular compliance.
  7. Improving the efficiency of industry operation.2


Thus Conclude, Oil and Gas sector is evolving day by day with a lot of new technology trends and innovations are expected to flow upstream sector with exploration and production and also downstream, midstream infrastructure, refinery operations and petrol chemical facilities. Therefore with the development of technological solutions and social responsibility. There is a huge opportunity to boost investment, minimize risk, and reduce cost in the Oil and Gas Industry.


  1. Oil and Gas Industry in India, India Brand Equity Foundation, 2021,
  2. ENGGPRO, Challenges facing Oil and Gas Industry (with the suggested Solutions),2020,


1 Points

One thought on “Major Challenges Faced by Oil and Gas Sector in India”

  1. Shantanu Agnihotri says:

    In recent years, among the major challenges emerge the need for improving the Environmental footprint to meet the increasingly stringent standard.
    The oil and gas industry is a major consumer of water and energy resources and is therefore subject to increasingly stringent environmental standards. This constrains them to rethink extraction, production, and distribution methods in order to obtain or maintain their license to operate. They also have to provide guarantees and ensure transparency in the environmental management of their activities.

    In the Beijing area in China for example, where water shortages are becoming more frequent and where tackling air pollution is a major central government commitment, environmental standards are particularly strict. The standards governing wastewater discharges in particular are currently the most demanding in the world. This is a major compliance challenge for the industrial groups in the region, in particular for Sinopec. It is the largest refining company in Asia and operates the Beijing Yanshan petrochemical complex, one of the largest refined petroleum products production sites in the country.

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