Hydrocarbon Vision 2025

Presentation by:Saurabh SahniPrashant Ojha

Rajat Deep Singh

Major Projection

Demand for Natural Gas will go up to 380 million standard cubic meters per

day by 2025

Agenda for Implementation

• Achievement of 100% coverage of unexplored basins to make increase domestic supply of oil & gas.

• Initiate projects to cover up the deficit domestic demand and supply of natural gas, and facilitate availability of LNG.

• Establish more of storage houses for crude & petroleum products at different locations.

• Maintain adequate levels of self-sufficiency in refining

• Create adequate infrastructure for distribution & marketing of oil & gas.

• Open up hydrocarbon markets to ensure fair competition between PSU’s, private companies & international players.

• Better policy framework for cleaner & greener fuels.

• Establish rational tariff & pricing policy.• Announce long-term fiscal policy to

attract more and more investors in the hydrocarbon sector.

Medium Term Plan• Continue Exploration in producing basins• Pursuing exploration aggressively in non-

producing basins.• Making available sufficient resources for

appraisal of unexplored basins through Oil Industry Development Board (OIDB) & other approaches.

• Optimize recovery from developed/explored fields.

• Ensure adequacy of finances for R&D required for building knowledge & infrastructure.

• Make Exploration & Production (E&P) compatible with the environment, & reduce discharges.

• Acquire acreages abroad for exploration as well as production.

Natural Gas

• It is being seen as the fuel of the future

• Environment friendly, economically attractive and a desirable feedstock.

Objectives

• Encourage use of natural gas, which is a relatively clean fuel

• Ensure ample availability of natural gas

• To tap on unconventional sources of natural gas, like coal bed methane, natural gas hydrates, underground coal gassification, etc.

Achieving the objectives

• Timely review of the demand & supply of natural gas to facilitate policy interventions.

• Importing gas from neighboring & other countries with emphasis on transnational gas pipelines.

• Import LNG to supplement the domestic gas & encourage companies to participate in LNG chain.

• Ensure reasonable transport tariffs. • Rationalize custom duty on LNG & LNG

projects.

• Formulate national policy on Underground Coal Gassification in a time bound manner.

• Increase R&D efforts to convert gas into liquids.

Refining & Marketing

Objectives• Maintaining 90% of self-sufficiency in the

sector with appropriate mix of PSUs, private oil companies & international players.

• Develop a globally competitive industry.• Have a free market & healthy competition

among players.• Develop appropriate infrastructure, such as

ports & pipelines • Make available un-adulterated quality oil

products at reasonable prices.• Providing certain products at subsidized

prices in some remote areas.

Crude Oil• We currently import over 70% of our crude

oil requirements. • Thus, great need to increase production &

take the country to self-sufficiency.

Current Scenario

• New Exploration blocks approved under NELP.

Action Plan• Grant operational flexibility to refineries in

crude sourcing & in respect of risk management through hedging.

• Setting up timetable to achieve product quality norms to comply with cleaner environmental standards.

• Formulate a clear long-term fiscal policy to facilitate investment in refining & infrastructure.

• Grant full freedom to existing PSUs to establish & maintain marketing networks & allow entry of new players through a clear criteria.

• Make marketing rights for transportation fuels conditional to one company investing or proposing to invest Rs.2000 crores in E&P & refining.

• Set up mechanisms to allow new entrants to set up their own networks of marketing.

• To ensure a uniform State level taxation on petroleum products.

• Increase ceiling of FDIs from current level of 49% to 100%.

• Provide level tax rates for domestic products vis-à-vis imported products.

Tariff & Pricing

Objectives

• Provide incentives for cleaner & greener fuels to promote environmental friendly hydrocarbon sector.

• Balancing the Govt. revenue along with moving the prices to international levels.

• To promote new investments, and at the same time, taking care of domestic producers.

• Remove subsidies to ensure optimum utilization of scarce resources.

Action Plan

• Phase out existing subsidies as soon as possible.

• Set up a Group of experts to determine appropriate levels of tariffs & duties.

• Provide concession on supplies to far flung, remote areas.

• Increase linkage of natural gas price from current level of 75% fuel oil (FO) import parity to nearly 100%.

Restructuring & Disinvestment

Objectives

• Maintain long term profitability.• Strengthen competitive edge of the

concerned companies in the context of changes in market forces.

• Ensure that the customers benefit by the restructuring.

Action Plan

• Announce policy in regard to PSUs in alignment with overall disinvestment policy of the Government.

• Complete the internal restructuring of oil PSUs by making full use of IT.

• Implement proposals of mergers of oil PSUs to enhance shareholder value.

• Disinvest in a phased manner in oil PSUs down to appropriate level to realize best shareholder value.