Ministry of Petroleum and Natural Gas Government of India Interactive Meet Mumbai DGH Directorate General of Hydrocarbons 26 October 2017
Our Prime Minister Major policy reform in the petroleum sector through the new Hydrocarbon Exploration Licensing Policy, there will be pricing and marketing freedom and a transparent revenue-sharing methodology. This will eliminate many layers of bureaucratic controls. - Shri Narendra Modi, Hon ble Prime Minister at Bloomberg Economic Summit
Our Petroleum Minister In the next 10 years, India is offering project scope of USD 300 billion (in hydrocarbon sector) looking into our future demand - Shri Dharmendra Pradhan, Minister of Petroleum and Natural Gas & Minister of Skill Development and Entrepreneurship at India Energy Forum
India is the World s Fastest Growing Large Economy Economy Size (FY 2016-17) USD 2.3 trillion 7 companies in Fortune 500 (2017 list) India s GDP grew 7.1% in 2016-17 Population 1.3 billion Second most populous country GDP Share (Advance estimates for FY 2015-16) Services 53.4% Industry 31.2% Agriculture 15.3% Unemployment rate 3.5% (30 days moving average June 2017) FDI USD 321.8 billion (April 2000-March 2017) Forex Reserves (As on June 16 2017) USD 381.9 billion Source: India Soars High, KPMG Report, BSE, Reserve bank of India, World Bank, http://www.tradingeconomics.com/india/unemployment-rate
Government of India Reforms 01 Make in India Devised to transform India into a global design and manufacturing hub Digital India To create a digital infrastructure as a core utility to every citizen 06 02 Ease of Doing Business To make governance more efficient and effective Start Up India Aims at fostering entrepreneurship and promoting innovation by creating an ecosystem that is conducive for growth of Start-ups 05 03 Smart Cities An urban renewal and retrofitting program with a mission to develop 100 cities all over the country Swacch Bharat To accelerate the efforts to achieve universal sanitation coverage 04 Source: KPMG Analysis; http://www.makeinindia.com/about ; sbm.gov.in/; startupindia.gov.in/
India s Energy Basket 500 31 30 Coal 57% MTOE 400 300 200 100 Hydro 4% MTOE 29 28 27 26 25 0 2012 2013 2014 2015 2016 24 2012 2013 2014 2015 2016 Oil 30% MTOE 250.0 200.0 150.0 100.0 50.0 0.0 60 2012 2013 2014 2015 2016 Renewables 2% MTOE 18 16 14 12 10 8 6 4 2 0 10 2012 2013 2014 2015 2016 Gas 6% MTOE 50 40 30 20 Nuclear 1% MTOE 8 6 4 10 0 2012 2013 2014 2015 2016 Source : BP Statistical Review 2017 2 0 2012 2013 2014 2015 2016
India s Energy Outlook 800 700 600 500 Primary Energy Consumption CAGR ~5% 250 200 150 India Oil and Gas Consumption- Production Snapshot Widening gap in demand and supply for oil & gas 300 250 200 MTOE 400 300 100 150 100 200 50 50 100 0 2011 2012 2013 2014 2015 2016 Source : BP Statistical Review 2017 0 0 1986 1991 1996 2001 2006 2011 2016 Gas Production (MTOE) Gas Consumption (MTOE) Oil Production (MT) Oil Consumption (MT) Total Production (O+OEG) Total Consumption (O+OEG) 3 rd Source : BP Statistical Review 2017 Largest consumer of oil Oil and Gas contribution to and petroleum products 35.6% primary energy in the world consumption in FY16 740 43.3 MMT of proven oil reserves TCF of proven natural gas reserves
Indian Energy Infrastructure 1 2 3 15000 kms. of Petroleum Product Pipeline Network 17000 kms of Natural Gas Pipeline Network Established City Gas Distribution Network across 16 states More than 22 MTPA of existing LNG re-gasification capacity 235 MTPA of refining capacity with private players share of ~40% Source : PPAC
Sedimentary Basins of India India has 26 sedimentary basins covering an area of 3.14 million square kilometres CATEGORY-I BASIN (Proven Commercial Productivity) Assam-Arakan, Cambay, Cauvery, Krishna-Godavari Offshore, Mumbai Offshore, Rajasthan CATEGORY-II BASIN (Identified Prospectivity) Kutch, Mahanadi-NEC, Andaman-Nicobar CATEGORY-III BASIN (Prospective Basins) Bengal, Ganga, Himalayan Foreland, Kerala- Konkan Lakshadweep CATEGORY-IV BASIN (Potentially Prospective) Basar, Bhima Kaladgi, Chhatisgarh, Ciddapat, Deccan Syneclise, Karewa, Narmada, Pranhita Godavari, Satpura-S.Rewa-Damodar, Spiti Zanskar Pre-Cambrian Basement/Tectonised Sediments
Key Discoveries First Offshore - Bombay High KG D6 Basin Source: DGH
Exploration and Production Regime in India State Monopoly Liberalization of E&P Sector (1997-2009) 9 NELP and 4 CBM rounds. 254 exploratory and 33 CBM blocks through competitive bidding New Domestic Gas Pricing Guidelines Successful completion of DSF 2016 134 e-bids received for 34 contract areas 30 contract areas awarded to 20 Companies 1948 1991 1997 2009 2014 2015 2016-17 Further liberalization of the sector Beginning of de-regulation 28 producing fields and 28 exploratory blocks offered including private players Discovered Small Field Policy Discovered small field bid round 2016 Hydrocarbon Exploration & Licensing Policy Open Acreage Licensing; NDR Launch Revenue Sharing Model Pricing Guidelines for difficult gas fields Proposed Production Enhancement Contracts Policy Nomination Era Pre-NELP PSCs NELP/CBM PSCs Future
Highlights of PSC regime in India Total License Awarded PSC Regime 16 lakhs square kms Total License currently under operation under PSC: ~105,000 sq. km US$ 40 bn investments till date and US$ 25 bn in pipeline 241 discoveries (126 Oil and 115 Gas) with Cumulative (O+OEG) production of 320 MMT ~400,000 LKM 2D and ~300,000 SKM 3D seismic data 1046 exploratory and 1018 development wells drilled so far ~25.6% of the total production is contributed by blocks under PSC regime PSC regime saw participation from large no. of players 2P reserves inplace Production, MMT (2016-17) Foreign Players Private Players PSU 4 7 20 22 Non-operators 24 Operators 35 PSC, 2357, 21% Nominati on, 8876, 79% Nominati on [VALUE], 74.4% PSC [VALUE], 25.6%
Architecture of the New E&P Policy Hydrocarbon Exploration and Licensing Policy (HELP) Open Acreage Licensing Reconnaissance Contract (RC) Petroleum Operations Contract (POC) Salient Features Revenue Sharing Model Full Marketing & Pricing Freedom Fiscal Incentives Unified License for all type of Hydrocarbons Freedom to carve out blocks National Data Repository
Discovered Small Fields Bid Round 2016 134 Total number of e- bids received 13 New entrants to E&P industry 47 Total number of companies that participated Discovered Small Fields Bid Round 2016 7 Existing E&P Players 20 Companies being awarded singly or in consortium Contract Areas awarded 30 23 Onshore 7 Offshore Success story in the face of global economic slowdown and low oil prices
National Data Repository Central repository for E&P data of India High level of Security Ease of Access Automatic reporting Integrated with GIS browser Facilitates sharing among users and domain Storage Viewing Retrieving Usage Facilitation of data viewing through: NDR Portal Physical Data Room Virtual Data Room
Data loaded in National Data Repository (NDR) 2D Seismic 3D Seismic Wells 1.7 million LKM of 2D seismic data 0.6 million SKM of 3D seismic data 13,170 well logs & 11, 900 well header data *as on 31 st July 2017
Attractive Features of HELP Open Acreage Licensing Revenue Sharing Model Full Freedom for Marketing and Pricing Single license for conventional & unconventional hydrocarbons Increased exploration phase Continuous exploration permitted during contract period Equal weightage of work program & fiscal share No carried interest by NOCs Graded Royalties for different block types Up to 100% FDI allowed Low regulatory burden Transparent bidding model Defined mechanism for developing common reserve Defined timelines for PI transfer Flexibility to use infrastructure in adjacent blocks Other fiscal incentives
Area offered under HELP through OAL Total Sedimentary Area = 3.14 million sq. kms. Total Area offered under OAL = 2.84 million sq. kms. Onshore = ~1.5 million sq. kms. Offshore = ~1.3 million sq. kms. Zone 1 Sufficient Data Coverage 0.7 million sq. kms. Zone 2& 3 Moderate to Sparse Data Coverage 2. 14 million sq. kms.
Open Acreage Licensing Flexibility to choose between Petroleum Operations Contract & Reconnaissance Contract Allows bidders to carve out their own blocks (minimum 10 by 10 Grid) by studying data at National Data Repository. Incentive mechanism for originators. Exploration rights on all retained area for full contract life. Environmental and Site Restoration obligations. EoIs can be made round the year with bidding rounds at 6 monthly cycles. Time bound actions and activities with disincentives for non-performance Time-Bound FDP preparation and provision for Direct FDP submission.
Thank you Oil and Gas in India Fueling a billion dreams everyday Directorate General of Hydrocarbons (Under Ministry of Petroleum & Natural Gas) Phone: 0120-2472000, Fax: 0120-2472049 Email: dg@dghindia.gov.in Website: dghindia.gov.in DGH India Directorate General of Hydrocarbons (Ministry of Petroleum & Natural Gas)
Thank you Directorate General of Hydrocarbons (Under Ministry of Petroleum & Natural Gas) Phone: 0120-2472000, Fax: 0120-2472049 Email: dg@dghindia.gov.in Website: dghindia.gov.in DGH India @DGHIndia DGH India