3rd IndaiAfrica Hydrocarbon Conference

8/20/2019 3rd IndaiAfrica Hydrocarbon Conference

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December 9 -10, 2011

New Delhi

3rd India – Africa

Hydrocarbons conference

Knowlegde Associate

Ministry of Petroleum & Natural Gas

Government of India


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3rd India Africa Hydrocarbons Conference | 1

Foreword

One of the most-often quoted stories of the 21st century is the emergence of India and China on the global

economy landscape. These emerging economies have provided much required calmness amidst global

economic turbulence. However the flip side of the story is their growing appetite for energy and

commodities. This increase in energy consumption - a key driver of growth – in these countries, has added

volumes to already stretched global energy demand. So much so that the centre of energy demand is

shifting from the OECD countries to Asia.

India, the 4th largest economy in the world, is also home to one-sixth of global population. At this pace of

growth in the economy (8.5 per cent in 2010-11) and subsequent increase in purchasing power, the energy

needs of a vast population and growing industry can be quite demanding for policy-makers. The primary

energy consumption of India, which is 4.4 per cent of global consumption in 2010, was hardly 1.55 per cent

of global consumption in 1980, a not so distant past in the historical perspective.

As we all know, fossil fuels are a depleting resource. To run the wheels of economy, nations and large

energy companies of the world are in a constant search for another longstanding and reliable source of fuel.

In the current scenario, Africa provides the much required comfort with its vast hydrocarbon resource and

potential.

Africa, where oil was first discovered in the 1950s in Nigeria, is a relatively new phenomenon on the oil and

gas world map. The continent’s vast landmass and geological similarity with other oil-producing regions or

continents of the world are optimists’ delight and has attracted the top companies of the world. The regional

diversity of oil-producers within this continent and discoveries at regular intervals has given hope of more

potential. The newer prospects have further fuelled expectations that there may be more under- or

unexplored regions within Africa.

Currently Africa produces 12.2 per cent of global oil quantum, while it has a relatively lower share in globaloil reserves at 9.5 per cent. This indicates increasing dependence of global economy on African oil and gas.

India’s trade and human ties with Africa have a long standing history. It can be blithely stated that the

groundwork was already done by earlier generations of both regions. We just need to strengthen it, in view

of our contemporary needs and respective competencies, with more interaction and collaboration. In an era

of global interdependence, India and Africa are best placed geographically to take necessary advantage

from each other and take current ties to newer heights.


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2 | 3rd India Africa Hydrocarbons Conference

Contents

List of Charts 4

List of tables 7

India 8

Basic information 8

Overview of energy sector 8

Oil sector 9

Natural gas sector 12

City gas distribution in India: An overview 18

Exploration and production 21Licensing regime 22

Shale Gas 24

Coal Bed Methane (CBM) 25

E&P Ventures by Indian Companies in Africa 26

Refinery sector 27

Import and export of petroleum and oil products 29

Pipelines in India 30

Sector organization 34

Policy and regulatory overview 35

Petroleum, Chemical Petrochemical

Investment Region (PCPIR) 39

Coal gasification in India 41

Africa hydrocarbon sector 45

Oil 46

Exploration & Licensing rounds in Africa 50

Refineries 53

Natural gas 54

Country Profile

Algeria 57Angola 63

Benin 68

Cameroon 70

Chad 73

Democratic Republic of Congo 75

Republic of Congo 79

Cote D' Ivoire 83

Egypt 86


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Equatorial Guinea 90

Ethiopia 94

Gabon 98

Ghana 102

Kenya 105

Liberia 109

Libya 113

Malawi 119

Mauritius 120

Mozambique 122

Namibia 126

Niger 129

Nigeria 132

Senegal 139

Sierra Leone 144

South Africa 146

Republic of South Sudan 151

Sudan 155

Tanzania 158

Uganda 161

Appendix 164

Glossary 164

Conversion Table 169


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List of Charts

Indian Primary Energy Mix (2010) 9

Balance Recoverable Oil Reserves, Production and Consumption 10

India - Ultimate Oil Reserves (MMT) 10

Share of India Oil Production by Companies (2010-11) 11

India - Oil Supply Projections XII plan (2012-17) 12

Share of India Gas Production by Companies (2010-11) 13

India - Gas Demand Estimate (2012-17) 14

Recoverable Gas Reserve, Production and Consumption 14

India - Ultimate Gas Reserves (BCM) 15

India - Gas Supply Projections XII plan (2012-17) 15

Status of Exploration in the Indian sedimentary basins in 2010-11 21

Acreage Portfolio of the Indian sedimentary basins 21

Blocks Awarded under NELP I - NELP VIII Rounds in India 22

Acreage Portfolio under License (NELP I – VIII) in India 23

Acreage Portfolio Awarded in NELP VIII Round in India 24

Refining Throughput of Major Players in India 27

India - Current Refining Capacity (MMtpa) and Companies

Share in Refining Capacity (%) in 2010 28

Net Product Export in India (Thousand metric ton) 29

World Energy Consumption (Mtoe) 45

World Primary Energy Supply (Mtoe) 46

World Proven Oil Reserves (2010) 47

Africa Oil Reserves (1995-2010) 47

World Oil Production (2010) 48

Africa Oil Production (1995-2010) 48

World Oil Consumption (2010) 49

Africa Oil Consumption (1995-2010) 49

World Refining Capacity (2010) 53

Africa Primary Refining Capacity (2010) 53

World Natural Gas Reserves (2010) 54

Africa Natural Gas Reserves (1995-2010) 54

World Gas Production (2010) 55

Africa Natural Gas Production (1995-2010) 55


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World Gas Consumption (2010) 56

Algeria - Oil Reserves, Consumption and Production 58

Algeria - Gas Reserves, Production and Consumption 59

Algeria - Natural Gas International Trade in 2010 (in billion cubic metres) 61

Angola - Oil Reserves, Production and Consumption 64

Angola - Gas Reserves, Production and Consumption 66

Benin - Oil Reserves and Consumption 69

Cameroon - Oil Reserves, Production and Consumption Global 71

Cameroon - Gas Reserves, Production and

Consumption (Y-axis right hand side scale unit) 72

Chad - Oil Reserves and Production 74

Democratic Republic of Congo - Oil Reserves, Production and Consumption 76

Democratic Republic of Congo - Gas Reserves, Production and Consumption 76

Republic of Congo - Oil Reserves, Production and Consumption 80

Republic of Congo -Gas Reserves, Production and Consumption 81

CṌTE D' IVOIRE - Oil Reserves, Production and Consumption 84

CṌTE D' IVOIRE - Gas Reserves, Production and Consumption 85

Egypt - Oil Reserves, Production and Consumption 87

Egypt - Gas Reserves, Production and Consumption 89

Equatorial Guinea - Oil Reserves and Production 91

Equatorial Guinea - Gas Reserves 92

Ethiopia - Oil Reserves, Production and Consumption 95

Gabon - Oil Reserves, Production and Consumption 99

Gabon - Gas Reserves, Production and Consumption 100

Ghana - Oil Reserves, Production and Consumption 103

Ghana - Oil Production and Consumption (Forecast) 103

Kenya - Oil Consumption 107

Liberia - Consumption of Petroleum Products 110

Libya - Oil Reserves, Production and Consumption 114

Libya - Gas Reserves, Production and Consumption 115

Mozambique - Oil Consumption 123

Mozambique - Gas Reserves, Production and Consumption 123

Niger - Oil Consumption 130

Niger - Petroleum Products Consumption Breakup – 2010 131

Nigeria - Oil Reserves, Production and Consumption 133

Nigeria - Gas Reserves, Production and Consumption 134

Senegal - Oil Reserves, Production and Consumption 140

Senegal - Gas Reserves, Production and Consumption 140

South Africa - Oil Reserves, Production and Consumption 147


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South Africa - Gas Reserves, Production and Consumption 147

Sudan - Oil Reserves, Production and Consumption 156

Tanzania - Oil Consumption, Imports 158

Tanzania - Gas Reserves, Production and Consumption 159


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India

Basic information

Population: 1,189,172,906 (July 2011 est.)

Currency: Indian Rupee ( ` or INR)

Exchange rate: 1US$ = ` 45.798 (Quarterly avg, July-September 2011)

GDP (PPP): US$ 4.06 trillion (2010 est.)

GDP-real growth rate: 8.5 per cent (2010-11)

GDP-per capita: US$ 3,500 (2010 est.)

Head of State: H.E. Smt. Pratibha Devisingh Patil, President (since 25 July, 2007)

Head of Government: Dr. Manmohan Singh, Prime Minister (since 22 May, 2004)

Overview of energy sector

India, the world's largest democracy, is the fourth largest economy in terms of Gross Domestic Product(GDP) in Purchasing Power Parity (PPP) terms after USA, China and Japan. Strong average GDP growthrate of 8.2 per cent in first four year of XI five year plan (2007-11) and initially projected 9.0 per cent in 2011(now expected about 8.0 per cent) have resulted in a surging demand for energy and hydrocarbon sources.Since 2010 India is the fourth largest primary energy consumer, after China, USA and Russia. Total primaryenergy consumption in 2010 was 524.2 million ton oil equivalent (MMtoe) or 4.37 per cent of total globalprimary energy consumption. . The energy demand has been increasing at a compounded annual average

growth of 6.5 per cent during the last five years and at 9.2 per cent in 2010 over the previous year.In 2010, oil and gas accounted for over 40 per cent of India's total primary energy consumption, next only tocoal, which accounts for ~53 per cent.

Total Primary Energy and Oil Consumption of Top five countries in Mmtoe (2010)

CountryPrimary EnergyConsumption

OilConsumption

As per cen t of World Pr imaryEnergy

China 2432.3 428.6 20.3

US 2285.7 850.0 19.0

Russia Federation 690.9 147.6 5.8

India 524.2 155.5 4.4

Japan 500.9 201.6 4.2

Source: BP Statistical Review, 2011


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Indian Primary Energy Mix (2010)

Source: BP Statistical Review 2011

With one-sixth of the world population, India's per capita energy consumption was 585 kilograms of oil

equivalent (kgoe) in 2009, significantly lower than the global average of 1,839 kgoe. As per Planning

Commission of India, the primary commercial energy requirement would reach to 738.07 Mtoe by 2016-17

of which approximately 38 per cent would be met through imports. With expected growth rate of more than

8% in the near future, India's per capita energy consumption is expected to more than double to about

1,124 kgoe by 2031-32, however it will still continue to be significantly lower than the 2009 world average of

1,797 kgoe.

Per Capita Energy Consumpt ion (kgoe) – 2007-2009

Select Count ries 2007 2008 2009

United States 7,748 7,503 7,034

Russian Federation 4,733 4,838 4,559

Japan 4,033 3,883 3,707

United Kingdom 3,444 3,395 3,184

China 1,489 1,598 1,698

Brazil 1,240 1,298 1,240

India 529 545 585

World 1,821 1,839 1,797

Source: IEA Key World Statistics 2011

Oil sector

As reported by BP Statistical Review 2011, at 9.04 billion barrels of oil equivalent (boe), India's proven

balance recoverable oil reserves are a meager 0.65 per cent of total world's reserve placing India at 19thposition in the world. More than 50 per cent of India's proven oil reserves are located in the western

offshore Mumbai High and in the onshore northeast of the country. Substantial undeveloped reserves are

located in the offshore Bay of Bengal Krishna Godavari basin and in onshore Rajasthan.

30%

10%

53%

1%5%

Renewables1%

Oil

Natural Gas

Coal

Nuclear Energy

Hydro electricity

Renew- ables


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Balance recoverable oil reserves (Left axis), production and consumption (Right axis)


With Reserves to Production (R/P) ratio of 30 years, India's existing domestic production of about 826,000

barrels of oil per day (bopd) is only about 25% of its current consumption of 3,319,000 bopd, creating a

wide gap to be met through imports. As a result, the volume of crude oil imports has been increasing

steadily in India nearing about 75 per cent of its total crude requirement in 2010.

According to DGH, the ultimate oil recoverable reserves i.e. total oil recoverable reserves is as per the chartgiven below.

Ultimate Oil Reserves (MMT)

Source: Directorate General of Hydrocarbons, India

Crude oil is one of the significant commodities in the import bill. As per Directorate General of Commercial

Intelligence and Statistics, India (DGCI&S), crude oil and refined products made up over 28 per cent of

India's import of principal commodities in 2010-11 resulting in India’s outflow for importing these

commodities to about US$103 bn in 2010-11, compared to US$ 86 bn in 2009-10, an increase of about 20

per cent. However, in terms of quantity, India imported 24% less crude oil and refined products in 2010-11

over the previous year, i.e. 173.53 million tons in 2010-11 versus 177.85 million tons in 2009-10. According

to the Petroleum Planning & Analysis Cell (PPAC), during first six months of the current financial year

(March – Sept, 2011), India imported 84.13 million tons of crude oil and 7.92 million tons of refined products

while during the same period India exported about 31.19 million tons of refined products.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2005 2006 2007 2008 2009 2010

P r o d u c t i o n & C o s n u m p t

i o n ( ' 0 0 0 B P D )

O i l r e s e r v e s ( m i l l i o n b a r r e l s )

Oil Reserves Oil Production Oil Consumption

16461688

1544

1000

1100

1200

1300

1400

1500

1600

1700

2008 2009 2010


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The gap between crude oil requirement and domestic production is expected to widen further as a result of

India's forecast GDP growth rate of 9 per cent per annum over the next five years as per the draft approach

paper on the XII five year plan (2012-17). As per assumptions made by the Working group on energy sector

for the Twelfth Plan, the country requires energy supply to grow by 6.5 per cent to maintain the growth rate

of 9 per cent over the next five years. It is projected that the oil and gas requirement by the terminal year of

the XII plan would reach 204.80 Mtoe and 87.22 Mtoe respectively. This demand for oil and gas would be

fulfilled by import of 164.8 Mtoe (or 80.5%) crude oil and 24.8 Mtoe (28.4%) natural gas in 2016-17.

During the XII plan, import dependence on crude oil is expected to increase from 76 per cent in 2010-11 to80 per cent in 2016-17, and for natural gas it is projected to increase from 19 per cent in 2010-11 to 28.4

per cent in 2016-17 (end of the Twelfth Plan).

In addition to importing greater quantities of crude oil, the Government of India has increased its focus on

enhancing reserves and production through increased domestic exploration activity as well as securing

equity oil overseas. Besides, upstream companies are emphasising on secondary and tertiary recovery of

hydrocarbons from the fields where production is in significant decline.

Domestic oil production is currently dominated by the state-owned exploration companies ONGC and OIL,

which together accounted for ~ 74 per cent of India's crude oil production in 2010-11. Crude oil production

has increased by 12.5% to 37.68 MMT in 2010-11 from 33.50 MMT in 2009-10 due to contribution of over 6

MMT from Barmer, Rajsthan and KG Basin.

Share of India Oil Production by Companies (2010-11)

Source: Ministry of Petroleum and Natural Gas, Government of India (Economic Editors’ Conference Report, October 2011)

It is expected that in near future, production from Cairn India’s Rajasthan fields is set to increase, as they

are yet to realize the full potential.In addition, ONGC and OIL India are already working on increasing

production through Enhanced Oil recovery (EOR) in their respective fields.

64.8%

9.5%

25.7%

ONGC

OIL

Pvt / JV Companies


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Oil supply projections XII plan (2012-17)

Source: Ministry of Petroleum and Natural Gas, Government of India

The contribution of crude oil production by the NOCs, ONGC and OIL, is expected to be about 68 per cent

in 2012 while the balance 32 per cent is to come from private sector and JV companies. In the terminal year

of the XII plan (2016-17) oil production from NOCs is expected to rise to 72 per cent with the remaining 28

per cent be contributed by private sector and JV companies

Natural gas sector

According to BP Statistical Review 2011, natural gas is currently approximately 10 per cent of India's total

primary energy basket, which is well below the world average of 23.8 per cent in 2010. India's proven gasreserves currently stand at 1.45 trillion cubic meters, which are 0.77 per cent of the world's total proven gas

reserves. This ranks India at 22nd in the world in terms of proven gas reserves. At existing production levels

of 50.9 bcm per year, the country has a Gas R/P ratio of about 28.5 years.

Gas production and supply

At present, gas supply is approximately 140 MMscmd against an estimated demand of approximately 262

MMscmd in 2010 (and 279 MMscmd in 2011 as per XI five year plan). India meets three-fourth of its current

gas consumption from its own production with the balance being fed by Liquefied Natural Gas (LNG)

imports. In 2010, India imported 12.15 bcm (33.3 MMscmd) of LNG, mainly from Qatar and small quantities

from Trinidad & Tobago, Nigeria, Yemen, Egypt and Equatorial Guinea.

0

5

10

15

20

25

30

2012-13 2013-14 2014-15 2015-16 2016-17

M M T P A

ONGC OIL Pvt./JV


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Share of India Gas Production by Companies (2010-11)

Source: Ministry of Petroleum and Natural Gas, Government of India (Report: Economic Editors’ Conference, October 2011)

The bulk of domestic gas production is by the state-owned companies, ONGC and OIL, which currently

contribute ~49 per cent of production volumes. The balance share of gas production is from private/JVcompanies. RIL from KG Offshore and consortium of BG-RIL-ONGC from Mumbai Offshore were the

largest contributors to the country’s gas production volumes after NOCs during year 2010-11.

The production from Reliance KG D-6 field has commenced with producting at around 50 MMSCMD it

accounts for ~36 per cent of India’s natural gas production. The gas production is expected to increase

further as RIL has formed a JV with BP for technological assistance across the gas value chain in India.

Existing sources of gas supply

Supply Sources (MMscmd) FY2010

Domestic Supply

ONGC 63.3

OIL 7.0

Pvt/JV 73.4

LNG Imports

Petronet LNG

- Long term supply

(From RasGas)26.25

- Spot / short term (for Dahej)

4

- Spot / short term (for Kochi)

Spot / short term by Shell Hazira 5

Spot / term by RGPPL -

Grand Total 179.3

Source: Ministry of Petroleum and Natural Gas, Government of India (Economic Editors’ Conference Report, October2011)/ Infraline

Gas consumption

As per the projections made in ‘Report of Working Group on Petroleum and Natural Gas for XII Plan’, power

and fertilizer sectors are expected to remain the major consumers of natural gas in India. Gas consumption

44.2%

4.5%

51.3%

ONGC

OIL

Pvt / JV Companies


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is expected to increase significantly in the future, as all the sectors are expected to witness healthy growth.

For instance, in CGD alone, PNGRB has plans to expand to about 300 cities overall in India, which may

require 100-120 mmscmd gas, estimated to be ~20-24% of the total gas demand estimates of ~473

mmscmd in 2016-17 as per the 12th plan.

Gas Demand Estimate (2012-17)

Source: Ministry of Petroleum and Natural Gas, Government of India (12th Plan Working Group Report)

According to the BP Statistical review 2011, natural gas reserves reached 1.45 tcm in 2010 and gas

production and consumption reached 62 bcm and 50.8 bcm respectively. It is observed that the gas

production increased by 29 per cent in last two years while gas consumption increased by over 22 per cent.

Recoverable gas reserve (Left axis), production and consumption (Right axis)


According to DGH, the ultimate gas recoverable reserves i.e. total gas recoverable reserves is as per the

chart given below.

194

293

371

405

446473

0

50

100

150

200

250

300

350

400

450

500

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

G a s d e m a n d e s t i m a t e ( M M S C M D )

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0

200

400

600

800

1,000

1,200

1,400

1,600

2005 2006 2007 2008 2009 2010

P r o d u c t i o n & C o s n u m p t i o n ( M c m )

R e s e r v e s ( B c m )

Gas reserves Gas Production Gas Consumption


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Ultimate Gas Reserves (BCM)


Gas supply projections XII plan (2012-17)

Source: Ministry of Petroleum and Natural Gas, Government of India (Report of the Working Group on Petroleum & Natural Gas

Sector- 12th Plan)

It is expected that the contribution of natural gas production by ONGC and OIL, the NOCs would reduce

from 54 per cent in 2012 to 51 per cent by end of XII plan (2016-17) despite growth in ONGC production.

This is due to fact that the balance production coming from private sector and JV companies is growing at

higher rate. As per the XII plan demand-supply estimates, it is concluded that over 50% of the natural gas

requirement would be met through imports in 2016-17.

The table below gives the estimates of LNG imports as per the current and ongoing LNG terminals. With a

slew of LNG terminals in planning stage, by various companies in India, the actual status may be quite

different from current forecasts.

17631713

2160

1000

1200

1400

1600

1800

2000

2200

2008 2009 2010

0

20

40

60

80

100

120

2012-13 2013-14 2014-15 2015-16 2016-17

M M s c m

d

ONGC OIL Pvt./JV


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LNG import projections during XII Plan

LNG Import Projections (MMscmd) FY2012f FY2013f FY2014f FY2015f FY2116f

LNLNGLNG Terminal terminalGImports

Dahej 35.0 43.8 43.8 52.5 52.5

HLPL Hazira 12.6 17.5 17.5 26.3 35.0

Dabhol 4.2 17.5 17.5 17.5 17.5

Kochi

Ennore

Mundra

East Coast terminal (3)

17.5

0

0

-

17.5

0

0

-

17.5

0

0

-

17.5

17.5

17.5

-

17.5

17.5

17.5

17.5

Total Capacity 69.3 96.3 96.3 148.8 175.0

Source: Draft Report on Gas for XII Five Year Plan

f: Forecast

Gas imports: LNG and transnational pipelinesDespite the likely increase in gas supply from domestic resources, the rapidly increasing demand

necessitates imports in the form of LNG and through transnational pipelines.

LNG importsGeographically, India is strategically located and is flanked by countries holding large proven gas reserves

both to its east and to its west. The country's large natural gas market is a major attraction to the LNG

exporting countries and in order to encourage LNG imports, the Government of India has kept import of

LNG under the Open General License (OGL) category and has permitted 100 per cent FDI in LNG

terminals.

Currently, India has two operational LNG import terminals:

Dahej LNG Terminal (10 Mmtpa): India started receiving LNG shipments in January 2004 with thecommissioning of Dahej terminal in Gujarat state. Petronet LNG, which owns this terminal, is promoted

by a consortium of ONGC, GAIL, IOCL, BPCL (total holding 50 per cent), Gaz de France International

(GDFI) (10 per cent), ADB (5.2 per cent), and with balance 34.8 per cent held by public. Petronet LNG

(PLL) has long term contracts with Ras Gas of Qatar for uninterrupted gas supply of 7.5 MMTPA and

has back to back sales arrangement with GAIL, IOCL & BPCL. PLL is also sourcing LNG through spot

and short term contracts from the international market for sale to other off-takers and bulk buyers.

Dahej terminal commenced operations in 2004 with the nameplate capacity of 5.0 Mmtpa and it was

expanded to 10.0 Mmtpa in July, 2009. The company has proposed to expand the capacity to 15 Mmtpa

by 2012.

The existing marine facilities of PLL are adequate for handling 10.5 to11.0 Mmtpa of LNG and it is

developing a second LNG Jetty to enhance the capacity of the terminal. The new jetty will help in

mitigating the risk of operating on a single Berth, facilitating berthing of tankers up to 260,000 cubic

metre (Q-Max). The project cost is estimated at US$ 200 million and is scheduled to be commissioned

by 3rd quarter of 2013.

Hazira LNG Terminal (3.5 Mmtpa): India's second LNG terminal started operations in April 2005 in

Gujarat state. The facility is owned by Hazira LNG, a joint venture of Shell and Total. Though supplies

for the terminal have not yet been secured on long term basis, Shell has been importing shipments of

spot LNG to operate the terminal. The terminal has operated at throughput capacity of 2.5 Mmtpa,

which can be expanded to 5 Mmtpa with marginal incremental investments in equipment. The Hazira

Terminal is expected to achieve a capacity to 10 Mmtpa as the gas market expands in India.

In addition to the above two running LNG terminals there are a number of projects in the pipeline in line with

the future potential demand for gas in India, both from a domestic as well as industrial requirement.


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The third LNG terminal Ratnagiri Gas and Power Private Limited (RGPPL) is promoted by NTPC Limited

and GAIL (India) Limited. Both these PSU hold 30.17 per cent equity each while 17.9 per cent is with MSEB

Holding Company Limited and the remaining 21.77 per cent is with financial institutions. The plant has

throughput capacity of 5 Mmtpa out of which 2.1 Mmtpa is dedicated for RGPPLpower plant while

remaining 2.9 Mmtpa is for merchant sale.

Petronet LNG is building its second LNG receiving terminal at Kochi (the country’s fourth), which would

have a capacity of 5.0 Mmtpa with 1.44 Mmtpa LNG supply tied from Exxon Mobil’s Gorgon Venture in

Australia for 20 years. It is planned to be commissioned by third quarter of 2012.

PLL is exploring the feasibility of developing one more LNG terminal on the East Coast of India to cater to

regional specific demand. PLL has completed market feasibility, demand assessment along with price

sensitivity studies.

Petronet LNG has signed a long term contract for supply of 7.5 MMTPA of LNG with RasGas, Qatar.It

accounts for ~86 per cent of total India’s total LNG imports. In addition, feasibility of importing LNG from

other source countries like Algeria, Indonesia, Trinidad & Tobago, Australia and Malaysia is also being

pursued.

IOCL in partnership with Tamil Nadu Development Corporation Ltd. (TIDCO) is planning to set up 2.5

Mmtpa LNG regasification project expandable to 5.0 Mmtpa, which will fulfil the gas requirements of the

surrounding region. The project will be situated at Ennore near Chennai. The company will also install a gas

based power plant at Kattupalli. The LNG terminal at Ennore is expected to cost approximately Rs. 10,000

crore.

GAIL is planning an LNG floating storage and regasification unit (FSRU) in Eastern India which could

require an investment of about Rs 3,000 crore. IOCL is also planning to set up an LNG import and

regasification facility in Dhamra.

Hiranandani Group, a large private construction/real estate company has planned to set up an 8 Mmtpa

terminal at Dighi port in Maharashtra for captive use for upcoming power plants and to supply gas to power

and fertiliser players.

Adani and GSPC plan to build a 5 Mmtpa LNG regasification terminal in Mundra on country’s western

coast. Both the partners will have equal stakes in the Mundra LNG terminal.

Reliance Industries Limited (RIL) and BP formed a JV, India Gas Solutions, which also plans to developinfrastructure for transportation and marketing natural gas in India and pursue opportunities including import

of LNG. The JV could build an LNG terminal and pipelines if it did not find capacity at India’s existing LNG

regasification facilities.

Transnational pipelinesFrom a geographical perspective, India is well placed to meet its natural gas requirement through

transnational pipelines. It is surrounded in the East, West and the North by major gas-surplus countries, in

terms of their proven gas reserves. Currently, two import pipelines projects are being explored from the

North (Daulatabad, Turkmenistan) and West (Iran):

• Turkmenis tan-Afghanis tan-Pakis tan-India (TAPI) pipeline: The 1,680 km, US$ 7.2 billion pipeline

project sponsored by the Asian Development Bank, will transport natural gas from Turkmenistanthrough Afghanistan and Pakistan to India. India, Pakistan and Afghanistan have signed a framework

agreement to buy natural gas from Turkmenistan in April 2008. A Special Purpose Vehicle (SPV) will

be floated for the project, and the pipeline will be built and operated by a consortium of companies from

the participating countries.

Iran-Pakistan-India (IPI) pipeline: A 2,775 km natural gas pipeline from Iran to India via Pakistan was

conceptualized in 1989, to cater to the growing Indian energy need. The Joint Working Group (JWG) of

the three countries was formed to discuss the price formula, transportation tariff and transit fee. India

and Pakistan have agreed to pay US$ 4.93 per million British thermal units; however some details

relating to price adjustment are pending for approval from the countries.

Iran and Pakistan signed the deal in June 2010 and target to export 21.5 MMscmd (or 8.7 bcm per year)of Iranian natural gas to Pakistan. According to Pakistan's minister of oil and natural resources, Iran-


20/176


Pakistan natural gas pipeline will be completed before the end of 2013 one year ahead of the original

schedule. Out of the total US$ 7.6 billion dollars cost of the project, Pakistan is expected to spend

US$ 1.65 billion dollars. Due to hefty transit fee demanded by Pakistan, India has backed out of the

project at this stage.

In addition, there is potential for at least two import pipelines to be developed from the eastern side:

Myanmar-India pipeline

Bangladesh-India pipeline

Efforts have been made at the highest level for these projects, however, the decision remains delayed due

to regional geo-politics.

Technical and commercial feasibility studies were undertaken by INTECSEA in 2008, for a sub-sea pipeline

from Oman, costing US$ 10 billion.If implemented, the pipelines will reach a maximum depth of 3,500m with

a total length of about 1,000km.

City gas distribution in India: An overview

India saw the modern CGD sector taking its shape in early 1980s with entry of Gujarat Gas and GAIL.

Despite this, development of CGD lagged due to lack of reach of gas transmission infrastructure and proper

regulatory framework. However, with the proposed development of pipelines connecting Southern andEastern India to the gas sources and formation of a downstream regulator, namely, Petroleum and Natural

Gas Regulatory Board (PNGRB) in 2006, the ball has been set rolling.

Currently CGD map is limited to approximately 70 cities, with an available transportation network of 6500

km and 380+ CNG stations catering to 600 thousand domestic, 25 thousand commercial and 700+

industrial connections. An estimated investment of Rs. 400 billion is planned during XIth five year plan

(2007-12) in gas sector, 75% of which is for transmission pipelines and CGD distribution infrastructure

combined.

Policy decisions to grant infrastructure status to common-carrier gas pipeline projects, entry of private

playerssuch as Reliance, permission of 100% FDI in LNG imports etc are the required triggers for the

sector. With fructification of all or some of these measures, CGD is expected to include 70 more cities in the

near future.

Another initiative of MoPNG is the ‘Gas Utilization Policy’, which deals with ‘priority for use’ of natural gas.

According to this policy, CGD is fourth in priority after fertilizer, LPG extraction and power plants. As natural

gas availability is a major concern for growth of the CGD sector, this policy may affect the transportation

industry, a major beneficiary of CGD expansion in the country on account of expected replacement of

existing polluting liquid fuels by natural gas.

Some of the players in CGD include GAIL and its subsidiaries with regional players and other PSUs,

Reliance Gas, GSPC Gas Co. Ltd., Lanco Infratech Ltd, Adani Energy, GGCL, GEECL, DSM Infratech, LMJ

Energy Infralogistics Ltd etc.

PNGRB has held three rounds of bidding fo r city gas distributi on. The results of first and second

rounds are given in the chart. The third round, results of which are still pending, has attracted 51

bids for seven city-areas.


21/176


Winners of first and second round of bidding fo r CGD Network Projects

First Round Second Round

Cities Won by Cities Won by

Kakinada(Andhra Pradesh)

Bhagyanagar Gas Allahabad IOCL+Adani JV

Dewas(Madhya Pradesh)

GAIL Gas Chandigarh IOCL+Adani JV

Meerut(Uttar Pradesh)

GAIL Gas Ghaziabad IOCL+Adani JV

Sonepat (Haryana) GAIL Gas Jhansi GAIL Gas

Kota(Rajasthan)

GAIL Gas Rajahmundry IOCL+Adani JV

Mathura(Uttar Pradesh)

JV of M/s DSM InfratechPvt. Ltd. & M/s SaumyaMining Pvt. Ltd.

Shahdol

Reliance Gas

Yanam Reliance Gas

3rd round of bidding for CGD Network Projects

Cities No. of bids received Bidders

Asansol-Durgapur(WB) 7 Hindustan Petroleum Corpn.Ltd., Great EasternEnergy City Gas Pvt. Ltd., GAIL Gas Ltd., Essar

Projects (India) Ltd., Lanco Infratech Ltd., RohanBuilders (India) Pvt. Ltd., and LMJ EnergyInfralogistics Ltd.

Ludhiana(Punjab) 16 Hindustan Petroleum Corpn Ltd., Indraprastha GasLtd., JPM Gas Ltd., GAIL Gas Ltd., Indian Oil-Adani Gas, Welspun Infratech Ltd., Siti EnergyLtd., Ambience Limited, GSPL – GSPC Gas, JayMadhok Energy Pvt. Ltd., HCC Infrastructure Co.Ltd., Everest Kanto Cylinder Ltd., LMJ EnergyInfralogistics Ltd., BPCL, ONGC & Oil India Ltd.,Rohan Builders (India) Pvt.Ltd., and LancoInfratech Ltd.

Jalandhar(Punjab) 12 Hindustan Petroleum Corpn.Ltd., Indraprastha GasLtd., Indian Oil-Adani Gas, Siti Energy Ltd.,

Ambience Ltd., BPCL, ONGC & Oil India Ltd.,

Lanco Infratech Ltd., Consortium of GSPL-GSPCGas, HCC Infrastructure Co. Ltd., LMJ EnergyInfralogistics Ltd., Jay Madhok Energy Pvt. Ltd.,and GAIL Gas Ltd.

Panipat(Haryana) Deferred Deferred

Jamnagar(Gujarat) 2 GSPC Gas Co. Ltd. and Lanco Infratech Ltd.

Bhavnagar(Gujarat) 2 Gujarat Gas Co. Ltd. and GSPC Gas Co.Ltd.

Kutch-East(Gujarat) 8 Hindustan Petroleum Corpn. Ltd., GAIL Gas Ltd.,GSPC Gas Co. Ltd., Indian Oil-Adani Gas, OnelifeGas Energy & Infrastructure Ltd., PSL Gas

Distribution Pvt. Ltd., Everest Kanto Cylinder Ltd.,and Jay Madhok Energy Pvt. Ltd.


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Cities No. of bids received Bidders

Kutch-West(Gujarat) 4 GSPC Gas Co. Ltd., JSIW Infrastructure Pvt. Ltd.,Indian Oil-Adani Gas and PSL Gas DistributionPvt. Ltd.

Regulation 17 is notified by PNGRB for existing entities, which were authorized to operate in cities on

acceptance by the Central Government. It is applicable for the CGD entities authorized by the Central

Government before the appointed date (1st October, 2007) of PNGRB. The entities and cities are

mentioned as below:

Acceptance of Central Government Authorization for CGD Ent it ies: under Regu lat ion 17

Name of the CGD Network Area Covered Entity Authorized

Agra CGD Network Agra Green Gas Limited

Hyderabad CGD Network Hyderabad Bhagyanagar Gas Limited

Indore CGD Network Indore including Ujjain Aavantika Gas Limited

Ghandhinagar MehsanaSabarkantha CGD Network

Ghandhinagar MehsanaSabarkantha

Sabarmati Gas Limited

Pune City including Pimpri

Chichwad CGD NetworkPune City includingPimpri Chiechwad andalong with adjoiningcontiguous areas ofHinjewadi,Chakan & Talegaon GA

Maharashtra Natural Gas Limited

Kanpur CGD Network Kanpur GA Central U.P. Gas Limited

Bareilly CGD Network Bareilly GA Central U.P. Gas Limited

Delhi CGD Network National Capital Territoryof Delhi

Indraprastha Gas Limited

Mumbai CGD Network Mumbai & GreaterMumbai

Mahanagar Gas Limited

Vijaywada CGD Network Vijaywada GA Bhagyanagar Gas Limited


23/176


Exploration and production

India has 26 sedimentary basins covering 3.14 million sq. km of area. Of these 26 basins, 22 basins fall in

the three categories of being prospective, having identified prospectivity and proven to be commercially

productive. Of the total area of 3.14 million sq. km only 22 per cent has been moderately to well explored.

Exploration efforts have been initiated in 44 per cent of the area and 34 percent remains poorly to

completely unexplored. Currently, 1.06 million sq. km area is under active petroleum Exploration Licenses

in 18 basins and a total of 35,601 sq. km area is under Mining Lease. Out of the total 597 concessions in

operations 259 are under Petroleum Exploration License (PEL) and 338 are under Mining Lease (ML).

Status of Exploration in the Indian sedimentary basins in 2010-11


About 44 per cent of India’s total sedimentary basin area is in the onshore zone, covering an area of 1.39

million sq. km, and balance 56 per cent covering 1.75 million sq. km is in offshore zones, including

deepwater offshore zone of 1.35 million sq.km.

Acreage Portfol io of the Indian sedimentary basins


Earlier concerns of the prospectively of India's sedimentary basins have been offset by large discoveries in

the eastern offshore Krishna Godavari (KG) basin by Reliance in 2003 and GSPC in 2006. As a result, the

KG basin is now viewed as one of the most exciting exploration provinces in the world and is becoming the

hub of exploration activity in India. Though there are some concerns on gas production in KG D6, the recent

alliance of RIL and BP Plc, seems to add the required technological impetus to the Indian E&P story, and

open avenue for more deepwater offshore exploration.

22%

44%

12%

22% Poorly Explored

Exploration Initiated

Unexlpored

Moderately to WellExplored

Shallow Water (0.4 mn sq km)

13%

Deep Water (1.35 mn sq

km)43%

Onshore(1.39 mn sq

km)44%

Shallow Water

Deep Water

Onshore


24/176


The hydrocarbon bearing potential of India's onshore acreage is also underlined by Cairn Energy's

Rajasthan oil discovery in 2004, which has yielded proven oil reserves of more than 1 billion barrels.

Participation by foreign exploration companies has increased since the first NELP-I bidding round in 1999

and in 2006, the number of foreign companies exceeded the domestic companies bidding under NELP VI.

The recent NELP-IX round has attracted 29 Indian companies and 8 foreign companies for 34 blocks on

offer.

Blocks awarded under NELP I - NELP VIII Rounds


Licensing regime

Pre-New Exploration Licensing Policy (NELP) explorationIndia's Exploration and Production (E&P) sector was largely dominated by ONGC and Oil India Limited until

the 1990s. With the initiation of the liberalization process in 1991, the upstream sector was opened up with

annual exploration bidding rounds for small and medium size fields for development by private companies

and JVs. In 1992 and 1993, two rounds of bidding for small and medium size fields were held.

Since 1993, the Government of India has signed Production Sharing Contracts (PSCs) for 28 exploration

blocks under Pre-NELP rounds, 11 of which have already been relinquished or surrendered. At present,

there are 16 exploration blocks under operation.

Major hydrocarbon discoveries made in the pre-NELP blocks are in the Gulf of Cambay by Cairn Energy,

Gujarat State Petroleum Corporation (GSPC) and Essar; and, in the Rajasthan Basin by Cairn Energy.

New Exploration Licensing Policy (NELP)

The New Exploration Licensing Policy (NELP) was introduced in 1997-98 by the Government of India toboost hydrocarbon exploration in the country. The Directorate General of Hydrocarbon (DGH) has held ninerounds of bidding under NELP I to NELP IX to date.

Some of the salient features of the NELP regime are:

Award of licenses through international competitive bidding. No acreage is to be awarded on nomination

basis and India's NOCs are to participate on competitive basis with other bidders.

An internationally competitive fiscal regime and no signature, discovery or production bonus. Contract

assures fiscal stability and full repatriation of profits abroad.

Participation through unincorporated JVs and no oil industry development cess or custom duty.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

0

20

40

60

80

100

120

140

160

180

200

NELP I NELP II NELP III NELP IV NELP V NELP VI NELP VII NELPVIII

N o s .

% o f

T o t a l

S e d i m e n t

a r y B a s i n

No. of Blocks Offered

No. of Blocks Bid For


25/176


Up to 100 per cent cost recovery (biddable).

Low to moderate royalty rates between 5 to 12.5 per cent and special concessions for deepwater

blocks.

Option to amortize exploration and drilling expenditure over a period of 10 years from the date of

commercial production.

Under the NELP I-VIII rounds, the DGH has awarded 235 blocks covering a total area of 1,468,511 sq. km.

Acreage Portfol io under License (NELP I – VIII)


The NELP VIII Licensing Round attracted a total of 76 bids for 36 blocks, out of 70 blocks on offer. Of the

24 deepwater blocks and eight onshore blocks on offer, single bids were placed for eight deepwater blocks

and two bids for onshore blocks. Out of the 28 shallow offshore blocks on offer, 13 blocks received bids,

with four blocks receiving multiple bids. On the other hand, all 10 Type-S (area not exceeding 200 sq.km.)

blocks received bids, with nine blocks receiving multiple bids. ONGC was the highest winner, totaling 17

blocks - 14 as operator, and 3 as non-operator. A total of 62 companies comprising of 10 foreign companies

and 52 Indian companies have bid either on their own or as a part of consortia.

Total 32 (8 deep water, 11 shallow water and 13 in onland areas) blocks were awarded and contracts have

been signed for all the blocks. Oil and Natural Gas Corporation (ONGC) won 14 blocks and along-with its

partners, BHP Billiton-GVK Power and Esveergee Steel (for the first time) won 3 blocks each, OIL, Cairn

India, Jubilant Oil & Gas and Harish Chandra won 2 blocks each. According to MOP&NG, investments of

approximately USD 1.1billion have been committed in this round.

66%

Onland,16.8%

17%

Deep water Onland

Shallow water


26/176


Acreage Portfol io Awarded in NELP VIII Round


NELP IX Licensing Round 2010The NELP-IX bidding round was announced by the DGH in October 2010 with submission deadline of

March 18, 2011. Total 34 exploration blocks including 19 new blocks and 15 relinquished blocks in 10

sedimentary basins covering an area of about 88,807 Sq. Kms were offered. Out of the 34 blocks, 19

onland blocks (out of which 8 type S blocks in most prolific producing basins), 8 deep water and 7 shallow

water blocks were offered. In NELP IX, an area of 58,336 Sq. Km (65.69%) covering 19 new blocks was

offered for the first time. In the remaining 15 blocks on offer, newly acquired data based on new concepts

for hydrocarbon exploration and frontier areas was available.

Open Acreage Licensing Policy (OALP)

So far 9 NELP rounds have been conducted; although foreign companies participation for exploration ofacreage has increased considerably. In order to seek more participation from international bidders, GoI is in

the process of introducing new policy for bidding under which oil and gas acreages will be available round

the year instead of cyclic bidding rounds launched under New Exploration Licensing policy (NELP).

One of the pre-requisite/ challenges for the formulation of OALP is to establish a data repository center to

provide quality and reliable geo-scientific data for evaluation to E&P companies. DGH has initiated the

process of establishing a National Data Repository (NDR) for gathering all the available geo-scientific data

available in India under one roof so that it is easily available to all the agencies that require it, such as, E&P

companies, research institutes and academia.

In OALP, data for any block would be made available to bidders through the NDR and it will enable bidders

to bid for any oil & gas block throughout the year. This concept of bidding would be implemented in India in

near future.

Shale Gas

Shale gas is high on the agenda all the fronts in India, including Government, PSUs and private majors in

India. After the success of shale gas in US, India is seeing shale gas as the significant option to address our

energy security concerns. During the last decade, US shale gas production has increased from merely ~

2% to ~ 17% of the total natural gas production based on advances in horizontal drilling and hydraulic

fracturing technologies.

It is estimated that a number of sedimentary basins (Gangetic plain, Gujarat, Rajasthan, Andhra Pradesh &

other coastal areas) in India, including the hydrocarbon bearing ones – Cambay, Assam-Arkana, &

Damodar – have large shale deposits. Though all the shale deposits are not ideal for shale gas exploration,

substantial potential for gas is expected from these basins.

60%

31%

9%

Deep water

Onland

Shallow water


27/176


India has plans to start licensing rounds for shale gas during XVII plan (2012-17), after assessment of

resource is done.GoI has signed MoU with US Geological Survey, Department of State in November 2010

to obtain technical assistance for characterization and assessment of shale gas resources, carrying out of

technical studies and training of manpower. Assessment of shale gas resources will help India to open up

the shale gas exploration acreages for bidding. The Directorate General of Hydrocarbons (DGH) is also

preparing for the auction of shale blocks in near future. In this regard, DGH has constituted a Multi

Organization Team (MOT) for the purpose of coordinating the National Oil Shale Program and has identified

five (5) sedimentary basins for detailed resource evaluation. Also, DGH is working on shale gas policy tocreate favourable environment for investments.

To understand the technologies and to gain experience for participation in shale gas bidding round in India,

Indian oil & gas companies have taken certain initiatives, some of those include:

ONGC, in association with Schlumberger drilled first R&D well in the Damodar Valley for exploring shale

gas deposits and encountered about 800 meters of shale. Test results are encouraging for the presence

of shale gas, however, detailed evaluation the shale is being carried out by ONGC through a US based

laboratory. ONGC is planning to drill three more such wells in the Gondwana basins for shale gas

exploration after this success.

In 2010, RIL acquired 40% stake in Atlas Energy’s Marcellus acreage, 45% stake in Pioneer Natural

Resources Eagleford Shale core acreage and a 60% stake in Carizzo Oil & Gas Marcellus Shale

acreage. Participation in the development of shale plays in the US will give RIL experience in shale gasdevelopment and extraction.

OIL has started seismic studies in the Assam-Arakan basin

In recent months, a number of Indian oil & gas companies have attempted to acquire shale gas assets

abroad, particularly in North America and Canada. These include OIL, IOCL, BPCL and others which

indicate their keenness to better understand and absorb the techniques for shale gas extraction in

collaboration with experienced players.

Bharat Petro Resources Ltd. (BPRL) acquired shale gas acreages from Australia’s Norwest energy to

pick up 50% and 27.80% P.I. in TP-15 and EP-413 blocks in Perth Basin.

In September, GAIL acquired 20% stake in one of Carrizo Oil & Gas Inc’s shale gas assets in the US.

Coal Bed Methane (CBM)

DGH has estimated prognosticated CBM resources at 4.6 Tcm spread over twelve Indian states covering

an area of 35,400 sq.kms. CBM exploration activities have already been initiated in 54 per cent of the area,

which is located in India’s major coal and Lignite bearing basins in the central and eastern parts of India.

Four CBM rounds have been completed till now and GoI have offered 36 blocks covering 18,600 sq KM

area out of which 34 blocks have been awarded including three blocks on nomination basis (two on

nomination and one through Foreign Investment Promotion Board route).

In CBM IVth round, GoI invited bids for 10 CBM blocks located in the different coal/lignite fields, covering an

area of about 5,000 sq.kms. In CBM IVth round, GoI invited bids for 10 CBM blocks located in the different

coal/lignite fields, covering an area of about 5,000 sq.kms. Total 26 bids were received for 8 blocks (out of

10 blocks) on offer. Government of India has awarded 7 CBM Blocks, however, bid for 8th block was

rejected due to non-submission of required bid documents by the sole bidder. The contracts for these 7

blocks were signed in July 2010. The awarded blocks covering an area of 3727 sq.km. are located in the

states of Assam (1), Jharkhand (1), Orissa (2), Madhya Pradesh (1), Madhya Pradesh & Chhattisgarh (1)

and Tamil Nadu (1). The estimated CBM resources of these 7 Blocks is about 330 BCM with expected

production potential of 9 MMSCMD.

Currently, CBM is commercially produced from five blocks in India, including Raniganj East, Raniganj

South, Jharia, Sohagpur West and Sohagpur East. Current CBM Production is about 0.15 MMSCMD that is

to likely to reach about 7.4 MMSCMD by 2013.

Key terms and conditions offered under the CBM rounds of licensing are as follows:

No signature bonus

10 per cent royalty


28/176


Biddable Production Level Payment, payable on every incremental production of 0.5 mmscmd

Freedom to market gas in domestic market at market determined prices.

Fiscal stability provision in the contract

No customs duty on imports required for CBM operations

One time lump sum commercial Bonus of US$ 0.3 million, following declaration of commerciality

Seven year tax holiday period

E&P Ventures by Indian Companies in Africa

In order to enhance energy supply security and augment domestic exploration efforts, India's NOCs are

seeking overseas oil equity through acquisition of E&P assets. ONGC Videsh Limited (OVL), the overseas

arm of ONGC, has formed a number of JVs with foreign companies. As of 31st March 2011, OVL has a

presence in 33 projects in 14 countries spanning Africa, Asia, Latin America, and the Middle East.

In Africa, OVL, OIL, IOCL, BPRL, HPCL, Essar Energy and Videocon Group are actively pursuing E&P

activities. The major E&P projects in Africa where Indian Companies have a participating interest are as

follows:

S.No Country Block Participating Interest and Partners

1 Libya Block 86 OIL (50% Operator) and IOCL (50%)

102/4 OIL (50% Operator) and IOCL (50% )

Area 95/96 OIL (25%), IOCL (25%) and SIPEX (50%)

Contract Area – 43 OVL (100%)

2 Sudan GNOP Block 1, 2 & 4 OVL (25%), CNPC (40%), Petronas (30%),Sudapet (5%) Joint – Operatorship

Block 5A OVL (24.125%), Petronas (67.875%),Sudapet (8%), Petronas and SudapetareJoint Operators.

Pipeline Project OVL (90%), OIL (10%)

3 Nigeria OPL – 279 & OPL – 285 OVL holds PI through its JV ONGC MittalEnergy Limited (OMEL), which is the operatorof these two offshore blocks. Other partnersare Total and EMO

OPL-279: OMEL (45.5%), EMO (40%), Total(14.5%)

OPL-285: OMEL (64.33%) ,EMO (10%),Total-(25.67%)

OPL – 205 (Onshore) OIL has signed SPA and SHA for acquiring25% equity of Suntera Nigeria 205 Limited,which is a Nigerian company having 70%interest in Exploration Block OPL 205

OPL-226 Essar Energy (100%)

4 Egypt

Block 3 & 4, Offshore, Egypt Block 3 (South Quseir) is located in Red Seaarea and Block 4 (South Sinai) at the junctionof Gulf of Suez & Red Sea. GSPC ledconsortium was awarded these two blocks inGANOPE International Bid Round 2008.GSPC (50% Operator), OIL (25%), HPCL(25%)- PSA not signed

5 Gabon Shakthi OIL (45% Operator), IOC (45%) Marvis PteLtd (10%)


29/176


S.No Country Block Participating Interest and Partners

6 Mozambique Offshore Area 1 Anadarko (36.5% Operator), Mitsui E&PMozambique Area 1 (20 %), BPRL VenturesMozambique BV (10 %), VideoconMozambique Rovuma 1 (10 %) and CoveEnergy Mozambique Rovuma Offshore (8.5%), Empresa Nacional de Hidrocarbonetos,E.P. (15%)

7 Madagascar 2 onshore blocks in theMorondava basin

Essar Energy (100%)

Refinery sector

In the last few years, India’s refinery sector has witnessed continuous capacity addition. As on April 2011,

India had a total capacity of 193.398 Mmtpa, growing by approximately 8.0 per cent in last 5 years.

According to BP Statistical Review 2011, India’s refining capacity utilization was highest in the world in 2010

which stood over 105 per cent while developed countries such as US, Canada and Japan manage 84 per

cent, 95 per cent and 81 per cent respectively. Even China was also unable to match the refinery capacity

utilization with India which was able to reach only 85 per cent in 2010. In last five years India’s refining

throughput has increased by a CAGR of over 23 per cent.

Refining throughput of major players

Source: PPAC

India has the largest refining capacity at single location at Jamnagar owned by, RIL with 60 MMtpa refiningcapacity. RIL has 2 refineries and holds 31 per cent of India’s refining capacity. IOCL is the largest refining

player in the country operating 10 refineries at different parts of the country with capacity of 65.7 MMtpa and

has 34 per cent share. BPCL operates 4 refineries with aggregate refining capacity of 30.5 MMtpa and

contributes 15.8 per cent to the refining capacity of the country. HPCL is the fourth largest company in

terms of refining capacity with 14.8 MMtpa capacity and holds 7.7 per cent share of refining capacity and

owns two refineries. ONGC with its subsidiary MRPL operates two refineries with total capacity of 11.9

MMtpa and contributes 6.2%. Essar Oil has 10.5 MMtpa refining capacity, operates only one refinery with

5.4 per cent share in refining capacity.

India accommodates refineries with refining capacity as low as 0.078 MMtpa to as high as 33.0 MMtpa. This

smallest refinery is being run by ONGC at Tatipaka while the largest refinery is owned and operated by RIL

at Jamnagar SEZ.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11

' 0 0 0 M T

IOCL BPCL HPCL ONGC (MRPL) Reliance Essar


30/176


Current refining capacity (MMtpa) and companies share in refining capacity (%) in 2010

Source: PPAC (As on 1st April, 2011)

India's current refineries with capacity

Company Name Locati on Total Capacity (Mmtpa)

Indian Oil Corporation Limited

Digboi 0.65

Guwahati 1.00

Barauni 6.00

Koyali 13.70

Haldia 7.50

Mathura 8.00

Panipat 15.00

IOCL Subsidiary

Chennai (CPCL) 10.50

Narimanam (CPCL) 1.00

Bongaigaon (BRPL) 2.35

Bharat Petroleum Corporation LimitedMumbai 12.00

BPCL Subsidiary

Kochi 9.50

Bina (BORL) 6.00

Numaligarh (NRL) 3.00

Hindustan Petroleum Corporation Limited Mumbai 5.50

Vizag 7.50

Oil and Natural Gas Corporation Tatipaka 0.08Mangalore 11.82

Reliance Industries LimitedJamnagar 27.00

Jamnagar (SEZ) 33.00

Essar Oil Limited Vadinar 10.50

Total Capacity 193.39

Source: PPAC (As on 1st April, 2011)

Currently there are three refineries, under different stages of construction – HMEL refinery at Bhatinda

(Punjab),IOCL refinery at Paradip, and Nagarjuna Oil Corporation Limited (NOCL) at Cuddalore

34.0%

15.8%

HPCL,14.8, 7.7%

ONGC(MRPL), 11.9,

6.2%

Essar, 10.5,5.4%

31.0%

IOCL

BPCLHPCL

ONGC (MRPL)

Essar

Reliance


31/176


HPCL-Mittal Energy Limited (HMEL), a 49 per cent each-JV promoted by HPCL and steel conglomerate LN

Mittal Group Company, Mittal Energy Investment Pte Ltd, Singapore is constructing an oil refinery at

Bhatinda with a capacity of 9.0 MMtpa. It is designed to process wide variety of crude oil including heavy,

sour and acidic crudes. The project is expected to be commissioned by first quarter of 2012.

Indian Oil Corporation Limited (IOCL) is setting up a grassroot refinery at Paradip, Orissa with a refining

capacity of 15 MMtpa. This refinery would be the most modern refinery in India with a nil-residue

production, and the refined products would meet stringent specifications. Paradip refinery project cost is

estimated at Rs. 29,777 crore (~US$ 6 bn) and the project is expected to be commissioned by April-June,2013.

Nagarjuna Oil Corporation Limited (NOCL), a subsidiary of Nagarjuna Fertilizers and Chemicals Limited is

setting up an oil refinery in Cuddalore, Tamil Nadu of 6.0 MMtpa in first phase which would be expanded to

15.0 MMtpa in future. The refinery would be state of the art with high complexity index designed to allow

processing various grades of crude oil (High Sulphur-high residue to Low Sulphur- low residue). The

refinery will produce auto fuels that will meet Indian as well as international specifications of Euro IV and

Euro V. Cuddalore refinery is expected to be commissioned by end of March 2012.

HPCL plans a US$6.7bn refinery of capacity 360,000b/d (19.5 MMtpa) refinery in Maharashtra in western

India. This will increase its refinery capacity by more than 500,000b/d (25.0 MMtpa) by 2017, which is

significantly higher than its current capacity of 280,000b/d (14.8 MMtpa). by 2017. This was necessitated by

HPCL's current retail expansion, which forced the company to buy products from other refiners.

BPCL is also planning to increase its refining capacity by expanding two of its existing plants or setting up a

greenfield refinery. Cals Refineries, with which BPCL has a fuel-offtake agreement, is also working on a

long delayed project to reconstruct Germany's Ingolstadt refinery in India.

India has one of the largest talent pools working in refineries in the world having hands on experience on

different technologies operations and this might be the opportunity for Africa to make partnership to improve

refinery efficiency, debottlenecking, capacity enhancement, process optimization, supply chain

management etc.

Import and export of petroleum and oil products

Net Product Export (Thousand metric ton)

Source: PPAC

10,018

15,964

18,318 20,377

36,311

41,796

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2005‐06 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11(P)

N e t p r o d u c t e x

p o r t ( ' 0 0 0 M T )


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According to the Petroleum Planning & Analysis Cell (PPAC), India is net exporter of Naphtha, Petrol, ATF,

Kerosene and Diesel since last few years. In last five years the net export of petroleum products increased

to four folds and this quantity is expected to increase further as India is expected to have export potential of

approximately 93 MMtpa refined products by 2013, when the expected refining capacity should be 241,

subsequent to completion of new projects and expansion of existing plants.

The Government has increased Foreign Direct Investment (FDI) into the refining sector. In 2007, approval

was granted for HPCL's refinery-cum-petrochemical complex in Bhatinda, Punjab with the partnership of

Mittal Investments. The FDI was increased from 26 per cent to 49 per cent in oil refining. This can beviewed as a major step towards the involvement of international oil companies in green-field refinery

projects in India.

Pipelines in India

India has wide network of crude oil, petroleum products, natural gas as well as LPG pipeline. During 1960-

63, Oil India Limited laid the first trunk crude oil pipeline, 1156 km long from Naharkatiya and Moran oil

fields to the Refineries at Guwahati and Barauni. Crude oil pipelines are installed to transport crude to

refineries across the country. The first cross country product pipeline was laid by IOCL during 1962-64 to

transport products from Guwahati Refinery to Siliguri. Refined products pipelines are to carry products from

refineries to demand centres as well as to port locations for export purpose. Natural gas pipelines are the

largest network in India and two main pipelines HVJ and EWPL are the cross country pipelines to transportgas to power, fertlizer, petrochemical plants, other industries and for CGD. LPG pipeline from Jamnagar to

Loni is the longest LPG pipeline in the world.

Crude oil pipeline networks:

As on March 1st 2011, India has over 13,459 kms of product and 7,837 kms of crude oil pipeline network,

with a capacity of 76.23 MMTPA and 106.1 MMTPA repectively.

ONGC has total 27,830 km long pipelines in India including 6,946 km of offshore pipeline.Oil India Limited

(OIL) owns and operates 1,432 km of cross-country crude oil pipelines. The state-of-the-art pipeline can

transport over 8.0 MMtpa of crude oil, feeding 4 PSU refineries Numaligarh, Guwahati, Digboi, Bongaigaon

and Barauni in Assam and Bihar state.

Cairn India’s The Mangala Development Pipeline (MDP) is the world’s longest continuously heated and

insulated pipeline. This is 670 km pipleine originates from Mangala Processing Terminal (MPT) in theMangala Field (Rajasthan) and end at the coastal location of Bhogat near Jamnagar on the western coast

of India.

Crude oil pipeine network

Pipeline Owned and operated by Length (kms)

Bombay High-Uran ONGC 203

Heera-Uran ONGC 81

Ahmedabad-Koyali ONGC 77

Ankleshwar-Koyali ONGC 94

Kalol-Nawagam-Koyali ONGC 127

Nahorkatiya-Digboi OIL 48

Nahorkatiya-Guwahati-Bongaigaon-Barauni

OIL 1157

Salaya-Mathura Pipeline (SMPL) IOCL 1870Paradip-Haldia-Barauni Pipeline(PHBPL) IOCL

1302

Mundra - Panipat Pipeline (MPPL) IOCL 1194

Mundra – Bhatinda Pipeline HPCL-Mittal 1100

Vadinar-Bina BPCL 950

Mangala Development Pipeline Cairn 674

Source: ONGC, OIL, ICL, HPCL, BPCL, Cairn

Petroleum pipeline network:

IOCL operates a network of 10,899 km long crude oil, petroleum product and gas pipelines with a capacityof 75.26 MMtpa of oil and 10 mmscmd of gas. This is around 75 per cent of the country’s total domestic oil


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pipeline network. IOCL is installing one more large product pipeline Paradip-Sambalpur-Raipur-Ranchi

which would be 1065 km long.

Pipeline Owned and operated by Length (kms)

Guwahati-Siliguri Pipeline (GSPL) IOCL 435

Koyali - Ahmedabad Pipeline (KAPL) IOCL 116

Haldia - Barauni Pipeline (HBPL) IOCL 525

Barauni - Kanpur Pipeline (BKPL) IOCL 745

Haldia-Mourigram-Rajbandh Pipeline(HMRPL)

IOCL 277

Mathura-Delhi Pipeline (MDPL) IOCL 147

Panipat-Ambala-Jalandhar Pipeline(PAJPL)

IOCL 268

Panipat-Delhi Pipeline (PDPL) IOCL 105

Mathura-Tundla Pipeline (MTPL) IOCL 55

Panipat-Rewari Pipeline (PRPL) IOCL 155

Panipat-Bhatinda Pipeline (PBPL) IOCL 219

Koyali- Sanganer Pipeline (KSPL) IOCL 1056

Chennai – Trichy - Madurai ProductPipeline (CTMPL)

IOCL 526

Madurai – Sankari (Branch pipeline) IOCL 157

Koyali - Dahej Product Pipeline(KDPL)

IOCL 103

Manali - Chennai ATF Pipeline IOCL 95

Koyali-Ratlam Product Pipeline IOCL 265

Chennai-Bangalore Pipeline IOCL 290

Bijwasan-Panipat Naphtha Pipeline IOCL 111

Branch Pipeline to Hazira fromKoyali-Dahej Pipeline

IOCL 94

Mathura-Bharatpur spur Pipeline IOCL 132

Mumbai-Pune pipeline HPCL 161

Visakh-Vijayawada-SecunderabadPipe Line (VVSPL):

HPCL 571

Mundra-Delhi Pipe Line (MDPL) HPCL 1056

Mumbai-Manglya-Piyala BPCL 875

Bina - Kota Pipeline BPCL 257

Kota-Jobner Pipeline BPCL 210

Numaligarh-Siliguri Pipeline OIL 660

Source: IOCL, BPCL, EIL, HPCL

Natural gas pipeline network:

India has more than 11,900 km long natural gas pipeline networks out of that about 2,500 km of pipeline

commissioned over the past 2-3 years and total gas transportation design capacity is about 283 mmscmd.

GAIL has the largest natral gas pipeline network in India with over 8,000 km long (including spurlines), with

capacity of approx. 170 mmscmd. GSPL Gujarat has 2,000 km network mainly in Gujarat with handling

capacity of 40 mmscmd. Assam Gas / Oil India has 571 km gas pipeline network with 8 mmscmd handling

capacity. RIL’s subsidiary RGTIL owns and operates East-West pipeline (EWPL) of 1,400 km long and has

80 mmscmd capacity.


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Pipeline network/ section

Pipeline Owned andoperated by

Length(km)

Capacity(mmscmd)

HVJ Network HVJ / GREP (Gas Rehabilitationand Expansion Project)

GAIL 3397 33

Dahej – Vijaipur pipeline GAIL 770 35

Vijaipur – Dadri GAIL 458 60

Chainsa - Sultanpur – Neemrana GAIL 218 35

Dadri - Bawana GAIL 96 35Dahej – Dabhol Dahej – Uran pipeline GAIL 474 12

Dabhol – Panvel Pipeline GAIL 327 12

Other networks Gujarat & Rajasthan GAIL 1000 20

Maharashtra GAIL 140 25

KG basin GAIL 835 16

Cauvery Basin GAIL 256 9

Others GAIL 424 10

EWPL East West Pipeline RGTIL 1400 80

GSPL pipelinenetwork inGujarat

Gujarat network GSPL 1874 40

OIL / Assam Gas North East OIL / AGCL 571 8

Dadri-Panipat Dadri-Panipat R-LNG SpurPipeline

IOCL 132 -

Source: MoPNG Annual Report 2009-10, GAIL, GSPL, RIL, OIL

In order to increase reach of gas,especially to southern and eastern India, GAIL has aggressive plans of

laying pipelines. It had approved investment of Rs. 8000 crore in 2010 for laying new pipelines and

augmenting existing pipelines. GAIL’s new upcoming pipelines:

Pipeline Length(km)

Capacity(mmscmd)

Expectedcommissioning

Dadri Bawana Nangal (Completed till Bawana in Ph-I) 610 31 2011-12

Chainsa Jhajjar Hissar (Completed till Sultanpur in Ph-I) 300 35 2011-12

Jagdishpur Haldia 2000 32 2013-14

Dabhol Bangalore 1386 16 2011-12

Kochi Kanjirikkod Bangalore 860 16 2012-13

TOTAL 5156 130

Source: GAIL

After completion of above mentioned upcoming pipelines which are expected to be commissioned by 2013-

14, the capacity of GAIL pipeline network is expected to increase from 157 MMSCMD at present to over

300 MMSCMD and overall length would be 14,000 Kms.

LPG Pipeline:

GAIL is the first company in India to own and operate LPG transmission pipeline and owns a cross country

Jamnagar-Loni LPG pipeline . It has 2,038 km LPG pipeline network 1,415 km of which connects the

western and northern parts of India and 623 km of networks is in the southern part of the country

connecting Eastern Coast. The LPG transmission network has a capacity to transport 3.8 MMTPA of LPG.

IOCL and BPCL also operate LPG pipleines. IOCL owns Panipat-Jalandhar LPG Pipeline (PJPL) which is

274 kms long while BPCLs LPG pipeline is to transport LPG from Mumabi refinery to Uran.


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Natural Gas Pipelines in Ind ia- Existing and Proposed

Source: PNGRB, India


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New major pipeline projects approved during 2009-10

Focus Energy to RRVUNL Pipeline (10"x90 Km.), project cost of Rs.99 crore

Dabhol-Bangalore Pipeline (30"/18"/10"/8"x1389 km), project cost of Rs 4543 crore.

Kochi-Kootanad-Bangalore Pipeline (24"/12"8" x 1114 km.), project cost of Rs. 3032 crore.

Jagdishpur-Haldia Pipeline (36"/30"/24"18"/ 12x2050 km.), project cost of Rs. 7596 crore.

Muradabad-Kashipur-Rudrapur Pipeline (12"/105km., 8"x54km.), project cost of Rs. 252 crore.

Capacity Augmentation of Agra-Ferozabad Pipeline (12"/10"/x65 km.), project cost of Rs. 119 crore.

Vijaipur-Borari, Spur Pipeline to Bhaiwara & Chittorgarh (18"16"/12"x290 km.), project cost of Rs. 463

crore.

Spur Pipeline to Jalandhar and Consumer Network to Ludhiana & Jalandhar (24"/4"x85 km.) and Spur

Pipeline from Saharnpur to Hariwar-Roorkee-Rishikesh-Dehradun (16"/10"/8"/4"x176), project cost of

Rs.540 crore.

IOCL has planned for 2,000 km new pipeline projects with estimated investments of Rs. 2000 crore for

expanding the infrastructure for transporting crude oil and petroleum products. These include the 700 km

Paradip-Haldia-Budge Budge-Kalyani-Durgapur LPG Pipeline, 295 km Sanganer-Bijwasan Naphtha

Pipeline, 270 km branch pipeline from Patna to Motihari and Baitalpur, 120 km Cauvery Basin Refinery to

Trichy Pipeline and 400 km Ennore-Trichy-Pondicherry LPG Pipeline.

Gujarat State Petronet Ltd, (GSPL) won a contract from PNGRB for laying three cross- country gas

distribution pipelines which include Mallavaram-Bhilwara (1611 km), Mehasana-Bhatinda (1688 km) and

Bhatinda-Jammu (512 km) pipelines. The estimated cost of the project would be Rs 12,500 crore. These

pipelines will have gas transportation capacity of 95 mmscmd. GSPL has 52 per cent stake in the

consortium, IOC has 26 per cent stake, BPCL and HPCL have 11 per cent stake each.

GAIL also won the rights to lay Surat-Paradip Pipeline of 1,550 km long natural gas pipeline from Surat in

Gujarat to Paradip in Orissa, which will connect west to east coast. This pipeline would be bi-directional with

a capacity to carry up to 60 mmscmd of gas. The pipeline will have 36-inch diameter and estimated cost of

the project would be Rs 5,500 crore. This will be the first pipeline in the country which will be originating

and terminating at a port - originate from Mora in Gujarat (a major node/terminal of GSPL gas grid pipelinenetwork) and end at the IOCLs Paradip refinery.

Sector organization

Oil sector companies

The Indian oil sector is dominated by state-owned enterprises. In the upstream segment, state-owned Oil

and Natural Gas Corporation (ONGC) is the largest player and accounted for roughly three-fourths of the

country's oil output in 2009-2010.

ONGC also holds overseas E&P interests through its subsidiary, ONGC Videsh Ltd. (OVL). The key

business of OVL is to prospect for oil and gas acreages abroad including acquisition of oil and gas fields,exploration, development, production, transportation and export of oil and gas. OVL has made major

investments in Vietnam, Russia, Brazil, Venezuela and Sudan, and is currently engaged in

exploration/production in Libya, Egypt, Syria, Nigeria, Congo, Colombia, Cuba, Iraq, Iran, Qatar,

Kazakhstan and Myanmar. OVL’s international oil and gas operations produced 9.45 MMT of O+OEG in

2010-11.

Oil India Limited (OIL), second largest national oil and gas company in India, has presence mainly in North

East, East Coast and Rajasthan in India. It also has international presence from acquisition of E&P assets

and holds interest in seventeen blocks, spread across seven countries, namely Libya, Egypt, Iran, Gabon,

Nigeria, Venezuela, Sudan, Timor Leste, and Yemen. It has domestic acreage of 127,260 sq. km and

International acreage of 38,605 sq. km. It operates 40 blocks and has significant participating interests in 21

non-operating blocks.


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Post liberalization, the upstream sector has witnessed a number of new foreign and domestic entrants, such

as, Reliance, Cairn, BG, Niko, HOEC, Hardy Oil, ENI, Santos, etc. Many of the companies entered Indian

E&P sector after introduction of NELP in India which provides level playing field to the upstream companies.

Recently, RIL has made an historic alliance with BP in the E&P, gas marketing and distribution sector. This

is the biggest FDI investment in Indian oil and gas sector. Also, Vedanta Resources Plc acquired

controlling stake in Cairn India, GoI consent for the deal is underway.

In the midstream refining segment, over 63 per cent of refining capacity is held by the state owned refiningcompanies, with the largest share of capacity (34 per cent) being held by IOCL. BPCL and HPCL together

hold 23.5 per cent share of the capacity, while ONGC holds 6.2 per cent of total refining capacity in India

(including MRPL, acquired by ONGC in 2002-2003).

The balance 36.4 per cent of refining capacity is held by private players Reliance and Essar. Reliance's

Jamnagar refineries have the world’s largest refining capacity at a single location in the world. Reliance is

the second largest refiner in the country with 31 per cent refining capacity in the India

Gas sector companies

While upstream gas production is dominated by ONGC, RIL, and OIL, transmission, distribution and

marketing of gas in India is currently dominated by GAIL India Limited (GAIL), GSPL and RIL. GAIL owns

and operates gas transmission and distribution infrastructure of over 8,500 km of pipelines with a capacity

to carry over 170 MMSCMD of natural gas across the country. The Company is also implementing 5 newpipelines and in addition, augmenting capacity of two existing pipelines. This will lead to doubling of pipeline

length and transmission capacity in the next 3 to 4 years. GAIL accounts for 75% of India’s natural gas

transmission. In addition, GAIL has 7 LPG plants in the Country and 2,038 KM of LPG transmission pipeline

network with a capacity to transport 3.8 MMTPA of LPG. It has produced over 1,068 TMT of LPG in 2010-

11. GAIL also owns and operates a gas based petrochemical plant at Pata (UP) with a capacity to produce

410,000 TPA Polyethylene (HDPE & LLDPE), which is further being expanded to produce 900,000 TPA of

polymers.. In addition, GAIL is implementing a petrochemical project in Assam to produce 280,000 TPA of

polymers through its subsidiary Brahmaputra Cracker & Polymer Ltd. (BCPL). GAIL is also a co-promoter in

ONGC Petro-additions Limited (OPaL) being set up at Dahej which is implementing a petrochemical project

to produce 1.4 MMTPA of polymers.

GAIL has implemented city gas distribution projects in major Indian cities through its 8 JV companies to

supply gas to domestic and transport sector. The company has also floated a wholly owned subsidiary –GAIL Gas Limited for the smooth implementation of city gas distribution projects.

Petronet LNG Limited (PLL) is promoted by ONGC, GAIL, IOCL and BPCL to import LNG and to set up an

LNG re-gasification plant at Dahej in Gujarat State. Petronet LNG has signed a long term contract for

supply of 7.5 MMTPA of LNG with RasGas, Qatar. In August 2009, Petronet LNG signed a 20 year contract

with ExxonMobil to bring 1.5 mmtpa of LNG for its upcoming terminal in Kochi. PLL also sources spot

cargoes from the international market and has expanded its Dahej terminal to 10 Mmtpa.

In February 2011, RIL and BP announced a transformational partnership in India, According to this, BP has

acquired 30% stake in 23 Oil and Gas production sharing contracts that Reliance operates in India,

including the producing KG-D6 block, and also incorporated a 50:50 joint venture called India Gas Solutions

Pvt. Ltd in November this year. This JV Company will focus on global sourcing and marketing of natural gas

in India and it will also develop infrastructure to accelerate transportation and marketing of natural gas in

India. This partnership will combine BP’s world class deep water exploration and development capabilities

with Reliance’s project management and operations expertise and would help RIL to ramp up the falling

production from KG-D6.

Other main players in Indian gas sector are Shell Hazira LNG, Gujarat Gas, Indraprastha Gas Limited,

Mahanagar Gas Limited, GSPL, Adani Gas etc.

Policy and regulatory overview

Foreign Direct Investment (FDI) guidelines

In order to promote investments in the Oil and Gas sector, Government of India has approved Foreign


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Direct Investment (FDI) and equity participation for different activities within the sector as follows:

FDI Cap allowed Sector Approval route Permissib le subject to…

100%Petroleum productmarketing

AutomaticExisting sectoral policy andregulatory framework in theoil marketing sector

100%Exploration activities in oil& gas

Automatic

Under the policy of theGovernment onforeign/private participationin exploration andproduction

100%Petroleum productPipelines

AutomaticUnder the GovernmentPolicy and regulationsthereof

100% Natural gas/LNG pipelinesWith prior Governmentapproval

100%

All activities other thanrefining, and including

market study andformulation;investment/financing;setting up infrastructurefor marketing in thepetroleum and natural gassector

Automatic

Sectoral regulations issuedby the Ministry of Petroleum

& Natural Gas; and in caseof actual trading andmarketing of petroleumproducts, divestment of26% equity in favor of theIndian partner/public within5 years

49%Refining sector in the caseof Public sectorUndertakings

Through ForeignInvestment PromotionBoard (FIPB)

Sectoral Policy

100%Refining sector in the caseof Private companies

Automatic

Source: Ministry of Finance, Government of India

Ministry of Petroleum & Natural Gas

Upstream

(Exploration &

Production)

Downstream & EPCIndustry Bodies/

Regulatory Bodies/

Others

ONGC

Other companies:

BHP Billiton, Jubilant

Energy, HOEC, BG Niko,

Videocon, etc.

GSPC

IOCL

CPCL, BRPL

HPCL

BPCL

GAIL

RIL, Essar Oil,

Nagarjuna Oil

Company Ltd.

Engineers India Ltd.

Directorate General of

Hydrocarbons (DGH)

Petroleum & Natural Gas

Regulatory Board (PNGRB)

Petroleum Planning &

Analysi s Cel l (PPAC)

Centre for High Technology

(CHT)

Petroleum Conservation

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