5th India Drilling & Exploration Conference (IDEC) 2013

….maintain….maximise….multiply

Status, Prospects and Development of the

Indian Oil & Gas Industry

• Key Areas• Energy security• Climate change• Economic developments

• China to account for largest share of global energy use followed by India & the Middle East

• World primary energy consumption projected to grow to 36% by 2030

• OPEC to pay the major role in global production in long run

International Energy Scenario

• Economic Growth Rate

• Energy Consumption Growth Rate

• Demographic Changes

• CO2 emissions

• Technology Development & Innovation

• Global Energy Intensity

• Oil Prices and

• Development of Alternative Energy Sources

Factors that would shape world energy future

• Baseline Scenario (business as usual) • Energy consumption to double by 2050• CO2 emissions to continue to rise to 2½ times the current level

• The Accelerated Technology Scenario (ACT): • Energy consumption - around 77% of baseline • Energy related CO2 emissions to reduce to 2005 levels by 2050.

• The Blue Map Scenario: • Energy consumption - around 67% of Baseline level • CO2 emissions - 50% lower than 2005 levels. • Explores the least cost solutions • Limits the risk of severe climate change.

Both 2 and 3 scenario require extensive use of renewable energy resources

Three Energy Scenario

Scenario suggested by IEA

Oil prices affected by

• Global demand

• Uncertain future supply

• Political factors

As a result, oil price varied from USD 147 to $ 39 in 6 months in 2008

Oil Shock

Energy Basket: World – 87% Fossil Fuel ; India – 92%

With 17% of global population; 0.5% of world’s Petroleum reserve & 6.7 % of

world’s Coal reserve; with a 7- 9% GDP growth target and 5.9% CAGR in primary energy

demand

the situation is pretty Challenging…

India: Energy Scenario

9

Opportunities

• India has 4% sedimentary basins of the world (3.14 million sq. km)

• About 1.0 million sq. km is yet to be offered

• Only 20% area is explored extensively

• Out of 26 basins, exploration yet to be Initiated in 11

• Favorable open NELP regime

• Abundant opportunities

With the Indian Oil and Gas Industry in perspective• Its imperative to maintain production • Maximize the recovery • Increase the value of our Assets

Steps to be Implemented:• Augmenting supply of crude oil through innovative &

appropriate technology • Evolve ways and means to explore & exploit small &

marginal fields • Develop unconventional sources of energy

ONGC Perspective

As an Indian E&P industry• Challenges of mature / ageing fields • Increase recovery for sustainable growth• Mature oilfields to continue to play important role

• A major challenge for the industry• Constraints in terms of

• Huge growth in expenses• Uncertainty• Risks

• Reasons• Remote geographic locations • Technically complex and unconventional fields (SHALE, CBM

etc)• Shortage of trained / experienced workforce

ONGC Perspective

• Domestic oil consumption touching 140 MMT

• ONGC’s contribution - 18%

• Major challenge being a National Oil Company

• Roll out of a sustainable comprehensive perspective

plan with a horizon of 2030 to meet challenges

ahead

ONGC Perspective

Energy Security - Strategy envisaged:• Carving out more areas of exploration under

• New Exploration Licensing Policy (NELP) • Coal Bed Methane (CBM) Policy

• Application of Enhanced Oil Recovery (EOR) / Improved Oil Recovery (IOR) techniques for increasing recovery factor

• Acquisition of exploration acreages and producing properties overseas to bring in equity oil.

• Substitution of oil through use of alternate / non-conventional sources of energy such as Bio-Diesel, Ethanol-blended Petrol.

ONGC Perspective

• Matured Producing fields• 15 fields producing about 75% of oil & gas are 25-50

years old

• Large major discoveries • Deep or ultra-deep waters• Seeking Technology Solutions

• Subsidy• Discount and net price gap increasing • Looming investment crunch

• Crew change• Action to create new talent / the energy leaders

• Constraints of accountability

Challenges

Perspective Plan…..

Marginal fields• Short life span of reservoir• Minimal crude reserve • Scattered in various locations

Challenges in Exploitation • Small recoverable reserves• Characteristics of the field, e.g. water depth, reservoir pressure,

sour gas, waxy oil etc.• Access & remoteness• Complexity of structures (topside loads, soil condition, water

depth etc) • Feasibility / Viability i.e. price & price stability of the produced

gas / liquids• Operators hurdle-rate (IRR)• Lack of collaborative efforts between licenses

Marginal Fields

• Technology - to drive the future world energy availability• Leverage the available technology in a better way to suit

requirements • Scouting for the technologies needed & Customising for

own perspectives • Maximising recovery factor from matured fields• Monetization of oil & gas reserves from deep water or

from small finds.• Technology per se to be taken at a different level which

warrants good investments and coming together of ‘good domain experts”.

Technology as Enabler to Success

….. And last but not the least, we need to move beyond the point of technological interventions and should try creating a seamless integration of the chosen technologies with the existing system, techniques & technologies both at the backward & forward of the point of intervention.

Technology as Enabler to Success

Thank You