In India petroleum was discovered in I860′ when Assam Railway and Trading Company was laying down rail track near Margherita. The first boring was done at Nahor Pung in Nov. 1866, but no oil was struck. Oil was struck at a depth of 3.35 m at Makum on March 26, 1867.
In the following year eight wells were bored in Makum area and a small refinery was set up by the company at Margherita in 1889. Another important achievement was the discovery of oil in the Digboi area in 1889. In 1899 Assam Oil Company was established to carry out exploration and digging operations in this area.
In 1915 Burmah Oil Company started oil exploration in the Surma valley region and oil was struck near Badarpurin 1917. In 1921 Assam Oil Company was taken over by the Burmah Oil Company. Until 1953 the Digboi area was the sole producer of mineral oil in the country. The Digboi refinery processed about 2 lakh tonnes of crude oil to meet only 5 per cent of the country’s requirements. The production of oil started in Nahorkatiya region in 1954.
In order to encourage oil exploration and production the Government of India constituted a separate directorate of Oil and Natural Gas in 1955 which was converted into Oil and Natural Gas Commission (ONGC) on 14.08.1956.
The Commission, with the technical assistance from the Soviet, Canadian, French, American and German experts, carried out geological mapping in major parts of the country. Meanwhile a new company. Oil India Ltd. (OIL) was established in February 1959 with the joint venture of Government of India and the Burmah Oil Company of U.K. for the exploration and production of oil and natural gas in Assam-Arunachal Pradesh area.
The efforts of ONGC bore positive results and oil was discovered in Cambay region of Gujarat in 1961 and Bombay High region in 1976. In 1964 the Indian Oil Corporation (IOC) was set up by amalgamating the Indian Refineries Ltd. with the Indian Oil Co. Ltd. to secure better co-ordination of refining and marketing of petroleum products in the country. In the present age of global liberalisation a number of foreign companies have been invited to collaborate with ONGC and OIL for the exploration and production of oil.