exploration and production of hydrocarbons(oil and natural gas) in india

Oil And Natural Gas

Exploration And

Production - IndiaSUBMITTED BY :

ASHISH SINGH

MBA – PM

500033217

History Colonial Rule : 1858 – 1947

The first oil deposits in India were discovered in 1889 near the town of Digboi, Assam

The first well was completed in 1890

Assam Oil Company was established in 1899 to oversee production

Independence : 1947 – 1991

New government naturally wanted to move away from the colonial experience which was regarded as exploitative

focus on domestic industrial and agricultural production and consumption,

large public sector, economic protectionism, and central economic planning

Oil India Limited was still a joint venture involving the India Govt. and the British owned Burmah Oil Limited (presently BP)

1956 when the government adopted an industrial policy that placed oil as a “schedule A industry”

October 1959 an Act of Parliament was passed which gave the state owned Oil and Natural Gas Commission (ONGC)

Liberalisation : 1991 – present

Process of economic liberalisation in India began in 1991

ONGC reorganized into a public limited company (Oil and Natural Gas

Corporation)

ONGC responsible for 77% of oil and 81% of gas production

Indian Oil Corporation (IOC) owns most of the refineries

NELP for exploration and production of Oil and Natural Gas were formulated

under Directorate General of Hydrocarbon (DGH), during 1997 - 98

Cont.

Historically, India has relied on coal to power its electricity sector

Liquid fuel as feed stock and oil for its transport sector

But for environmental reasons we need to focus on cleaner fuels

Gas is one of the cleanest fuel with less carbon dioxide per joule

delivered than either by Coal or Oil

The development of Natural Gas industry in the country in 1960s with

discoveries of gas fields in Assam and Gujarat

After discoveries of South Basin fields by ONGC in 1970s, Natural Gas

assumed importance

The Exploration activities in India were earlier carried out only by the

Natural Oil Companies (ONGC & OIL)

Oil in India

India had about 125 Million metric tonne of proven oil reserves as April 2010

The second - largest amount in the Asia - Pacific region behind China

Most of India's crude oil reserves are located in the western coast (Mumbai High)

and in the northeastern parts of the country

considerable undeveloped reserves are also located in the offshore Bay of

Bengal and in the state of Rajasthan

India’s oil sector is dominated by state-owned enterprises,

The government has taken steps in past recent years to deregulate the

hydrocarbons industry and support greater foreign involvement

India’s state-owned Oil and Natural Gas Corporation is the largest oil company

ONGC accounting for roughly 75% of the country’s oil output during 2006, as per

Indian government estimates

Natural Gas In India

As per the Ministry of petroleum, Government of India, India has

1,437 billion cubic meters of confirmed natural gas reserves as of April 2010

A huge mass of India’s natural gas production comes from the western

offshore regions, particularly the Mumbai High complex

The onshore fields in Assam, Andhra Pradesh, and Gujarat states are also

major producers of natural gas

India imports small amounts of natural gas

ONGC and Oil India Ltd. (OIL) are the leading companies with respect to

production volume

Some foreign companies take part in upstream developments in joint-

ventures and production sharing contracts

Reliance Industries, a privately owned Indian company, will also have a

bigger role in the natural gas sector

Crude Oil Production

Crude Oil Production in 2013 – 14 was about 37.788 Million Metric Tonne (MMT)

by ONGC, OIL and private / JV Companies

68%

32%

Crude Oil Production

NOCs (ONGC & OIL) Private / JV Companies

48.2

0.80.3

12.5

13.4

24.3

0.6

Crude Oil Production : Offshore and Onshore

Offshore Andhra Pradesh Arunachal Pradesh

Assam Gujarat Rajasthan

Tamil NaduSource : Ministry of Petroleum & Natural Gas

State - Wise Crude Oil Production Trends (Thousand Metric Tonne)

Source : Ministry of Petroleum & Natural Gas

Natural Gas Production

Natural Gas Production in 2013 – 14 was about 35.406 Billion Cubic Meter (BCM)

or 97 MMSCMD by ONGC, OIL and Private / JV Companies

73%

26.8, 27%

Natural Gas Production


74.5

3.3

0.1 8.1

4.72.8 3.7 2.4 0.4

Natural Gas Production : Offshore and States

Offshore Andhra Pradesh

Arunachal Pradesh Assam

Gujarat Rajasthan

Tamil Nadu Tripura


State – Wise Natural Gas Production Trends (MMSCMD)


Allocation and Supply of Natural Gas

Natural gas available in India can broadly be classified into two categories

Domestic Natural Gas

Imported Re – Gasified Liquefied Natural Gas (R - LNG)

Domestic Gas is allocated to various sectors based on the Policy Guidelines

issued by Govt.

In case of Imported Gas, the marketers are free to import LNG and sell the

RLNG to customers

A statement showing sector – wise supplies of natural gas in given in below

(Figures are in MMSCMD)

Sector Domestic R – LNG Domestic + R - LNG

Fertilizers 30.30 12.64567 42.95

Gas Based LPG plants for LPG

extraction

1.83 1.09 2.92

Power 27.26 2.170355 29.43

CGD 7.25 8.2337 15.48

TTZ 0.98 0.07 1.05

Small consumers having allocation

less than 50,000 SCMD

2.45 2.2575 5.03

Steel 1.32 1.8244 3.14

Petrochemicals 3.82 0.88 4.70

Refineries 1.89 10.454 12.35

Others 2.92 1.16906 4.09

Total 80.02 41.11 121.13

Basin – Wise Hydrocarbon Discoveries

So far 810 hydrocarbon discoveries comprising of 260 – natural gas and 550 – crude oil have been made

610 discoveries by NOCs and 200 discoveries by private/ Joint Venture Companies

260, 32%

550, 68%

Hydrocarbon Discoveries

Natural Gas Crude Oil

610, 75%

200, 25%

Discoveries By Companies



Hydrocarbon Discoveries as on 01.01.2014 since inception


Exploration and Production of

Hydrocarbons in India

Petroleum Exploration and Production were initially carried out in India by two companies

Oil and Natural Gas Corporation (ONGC)

Oil India Limited (OIL)

With liberalization of economy in 1991 – 92, Indian sedimentary basin were opened to private sector companies also

Private companies were allowed to enter into exploration through JV with

NOCs under pre – NELP regime

282 blocks for exploration were awarded under the liberalized policy till 2012

Exploration & Production

The Energy demand is on rise with social and economic development in country

Keeping in view the growing requirement of energy, Govt. of India has adopted multi – pronged strategy for giving momentum to exploration and production

The major steps taken in this regard are :

offering of exploration blocks through NELP

acquisition of oil gas assets abroad

development of alternate sources of hydrocarbon such as

Coal Bed Methane

Shale Gas

Research and development for new sources such as Gas Hydrate

to carry out E&P operation in safe and environment friendly manner

New Exploration And Licensing Policy

As a net importer of all oil, the Indian Government has introduced policies aimed at growing domestic oil production and oil exploration activities

As part of the effort, the Ministry of Petroleum and Natural Gas crafted the

New Exploration License Policy (NELP)

The NELP for exploration and production of Oil and Natural Gas (but

excluding Coal Bed Methane) and Coal Bed Methane (CBM) policy were

formulated by Govt. of India

The policy were formulated with Directorate General of Hydrocarbon (DGH),

during 1997 – 98

These two policies were formulated to provide a level playing field to both

public and private sector companies in E&P of hydrocarbons

This policy has opened up E&P sector for private sector and foreign

investments with 100 % FDI

Cont.

NELP became effective in Feb 1999

acreages were offered to the participating companies through the process of open International Competitive Bidding

First round of offer of blocks was launched in 1999

And Most of the ninth round awards were concluded in 2012

Under NELP, 360 exploration blocks have been offered so far and

254

166

88Blocks

Awarded Blocks Active Blocks Relinquised


Hydrocarbon Discoveries in NELP Blocks

Total of 130 hydrocarbon discoveries under the NELP regime in 42 blocks

47, 36%

83, 64%

Hydrocarbon Discoveries under

NELP

Crude Oil Natural Gas

64, 49%66, 51%

Discoveries Made By

Companies

NOCs (ONGC and OIL) State PSU (GSPCL)


The details of Company – Wise discoveries made are as under

0

20

40

60

80

100

120

140

ONGC Oil India

Ltd.

GSPCL Reliance

Industries

Ltd.

Jubiliant

Oil and

Gas Pvt

Ltd.

Focus

Energy

Ltd.

Cairn

India Ltd.

Niko

Resource

Ltd.

Naftogaz Total

10

1

15 14

2 04

0 1

47

29

0

9

37

4 1 1 2 0

83

39

1

24

51

61

5 2 1

130

Hydrocarbon Discoveries in NELP Blocks

Oil Discoveries Gas Discoveries Total Discoveries


Blocks Awarded under NELP

0

10

20

30

40

50

60

70

NELP I NELP II NELP III NELP IV NELP V NELP VI NELP VII NELP VIII NELP IX

48

2527

2420

5557

70

34

28

23 2421 20

52

45

3633

24 23 2320 20

52

41

32

19

Blocks Awarded NELP

No of Blocks Awarded No of Blocks Bid for No of PSCs signed


Details of NELP Bidding Round


NELP Round Wise Area of Awarded Blocks

0

50000

100000

150000

200000

250000

300000

350000

NELP I NELP II NELP III NELP IV NELP V NELP VI NELP VII NELP VIII NELP IX

Area Awarded

Area Awarded

Round Area Awarded

(sq. kms)

NELP I 2,28,472

NELP II 2,63,050

NELP III 2,04,588

NELP IV 1,92,810

NELP V 1,13,687

NELP VI 3,06,331

NELP VII 1,12,988

NELP VIII 52,603

NELP IX 26,428

Total 15,00,957Source : Ministry of Petroleum & Natural Gas

Status of Awarded Blocks

NELP Blocks Awarded

Companies (Operators) Blocks Awarded

PSU 144

Indian Private Companies 70

Foreign Companies 40

Total 254

Blocks Status

Active Blocks Relinquished Blocks Total Awarded Blocks

148 106 254


Salient Features of NELP

100 % FDI is allowed under NELP

No mandatory state participation through ONGC/OIL or any carried interest of the

Govt.

Blocks to be awarded through open international competitive bidding

ONGC and OIL to compete for obtaining the petroleum exploration licenses on a

competitive basis

Freedom to the contracts for marketing of crude oil and gas in the domestic market

Royalty at the rate of 12.5 % for the onland areas and 10 % for offshore areas

Companies to be exempted from payments of import duty on goods imported for

petroleum operations

A Model Production Sharing Contract (MPSC) which is reviewed for every NELP

round

Contracts to be governed in accordance with applicable Indian Laws

Achievements under NELP

An area of 1.50 Million Sq. Km awarded (48 % of total sedimentary area)

A total of 254 blocks awarded in nine rounds

A total of 3,46,676 LKM of 2D seismic and 2,74,178 SKM of 3D seismic data gathered

and 510 exploratory wells drilled

A total of 128 hydrocarbon discoveries (46 oil and 82 gas) made in 42 blocks

US $ 21.32 Billion invested (US $ 12.51 Billion on exploration and US $ 8.81 Billion on

development)

Government has received US $ 657 Million as Royalty and Profit Petroleum till 2012 – 13

India has joined the global deep-water players with first deep-water oil production in September, 2008

India Sedimentary Basins

1.39, 44%

0.4, 13%

1.35, 43%

26 Sedimentary Basins

Total Area : 3.14 Miilion Sq. Km

Onland Shallow Water Deep Water


Sedimentary Basins Cover

1. Gujarat – Kutch

2. Gujarat – Saurashtra

3. Mumbai

4. Kerala – Kankan

5. Cauvery

6. Krishna – Godavari

7. Mahanadi – NEC

8. Andaman

9. Bengal

10. Rajasthan

11. Cambay

12. Deccan Synclise

Blocks on Offer

94,364, 57%47,745, 29%

23,944, 14%

Blocks Area

Total Area : 1,66,053 Sq. Km

Deep Water Shallow Water Onland

14, 30%

15, 33%

17, 37%

No of Blocks

Total Blocks - 46

Deep Water Shallow Water Onland


Petroleum Exploration License (PEL)

and Petroleum Mining Lease (PML)

PEL is granted for a period of 7 years in onland/ shallow water areas

And 8 years in deepwater and frontier areas for exploration activities as per PSC

provisions under NELP

PML is normally awarded for 20 years for producing Hydrocarbons as per The

Oilfields Regulation and Development Act, 1948 P&NG Rules, 1959

PEL / PML for offshore exploration and production is granted by the Union Govt.

In case of onland blocks, PEL / PML is granted by the concerned State Govt. on

the basis of recommendation made by the Union Govt.

Basin – Wise operative PEL and PML under Nomination Regime as on 01.04.2014


Basin Wise PEL & PML under nomination with private / JV as on 01.01.2014


Why Invest in E&P Sector?

Prospectivity

Prospectivity of Indian Sedimentary is yet to be properly established

large possible reserves trapped in Indian sedimentary basins

Demand

Growing economy and population growth are main drivers for oil and gas

demand, increasing every year

Price

International Crude Oil Price

Infrastructure

Surplus refining capacity and natural gas pipeline network

100 % FDI is allowed in Exploration & Production

Thank You

exploration and production of hydrocarbons(oil and natural gas) in india

Presentations & Public Speaking

production of oil

oil deposits

natural gas reserves

natural gas exploration

natural gas corporationis

assam oil company

powerpoint presentation

countrys oil output