Introduction to Indian

Upstream Oil & Gas Sector

Tejas Sharma, Market AdvisorInnovation Norway, New DelhiSeptember 2010

Index

Part I - Overview of Indian Oil & Gas

Part II - Indian Hydrocarbon Resources

Part III - Sedimentary Basins of India

Part IV - Significant Discoveries & prominent basins

Part V - Drilling Rigs Scenario in IndiaPart V - Drilling Rigs Scenario in India

Part VI - Opportunities – EPC Contracts

Part VII - Case Study Indo-Norway successful co-operation

Part VIII - INBDP’s

Part IX - Conclusion

Part I:

Overview of Indian Oil & Gas

The Indian Oil and Gas Industry-Prime mover of the Indian economy

• India is the fifth largest energy consumer in the world

• India is the ninth largest crude importer in the world

• Oil and Gas Industry size is estimated at about USD 110 billion.

• Constitutes about 32% of India’s imports. – Huge Import bill for the govt.

• Accounts for about 12% of India’s exports.

• India has the world’s sixth largest refining capacity - 2.56 million barrels per day, representing approx. 3% of world capacity

Source: Ministry of Commerce, MoP&NG,

With vast population and limited energy resources India is a highly

”Energy Hungry ”

Yawning Demand Supply Gap

Crude Oil (MMT)

107 135172

368

100

200

300

400

Natural Gas (MMSCMD)

151231

313391

158 170200

300

400

500

107 135

32 35 34 610

100

2001-02 2006-07 2011-12 2024-25

Year

Oil Demand Production

15181 95

158 170

0

100

200

2001-02 2006-07 2011-12 2024-25

Year

Demand Supply

Source: DGH Presentation

The gap poses a serious problem. Long term measures mandatory. But how..??

Exploratory measures initiated by Government

New Exploration Licensing

Policy

• 280 blocks awarded in Pre-

NELP and New Exploration

Licensing Policy (NELP)

rounds

• 40+ discoveries with

Coal Bed Methane Policy

• 33 Blocks already awarded

with production potential of

about 35 MMSCMD under

four auction rounds of Coal

Bed Methane (CBM) policy

• Significant commercial finds

in blocks held by RIL and hydrocarbon in-place

reserves of over 600 MMT in

last five years

• Investment commitment of

about USD 5 bn in

exploration phases under

NELP

• Perception of prospectivity of

Indian sedimentary basins

broadens with every NELP

auction round

Exploratory

Measures

in blocks held by RIL and

ONGC

• Present commercial gas

production of 0.15 MM

SCMD

• 54 Bids received for 10 CBM

blocks offered in the fourth

round.7 blocks awarded.

• Fifth auction round on cards

before end of calender year

2010

Major Offshore E&P operators in India

� Oil & Natural Gas Corporation (ONGC)

� Reliance Industries Ltd (RIL)

� Cairn India

� British Gas� British Gas

� Gujarat State Petroleum Corporation (GSPC)

� Hindustan Oil Exploration Corporation (HOEC)

� Jubilant Energy limited

� BHP Billiton

� Oil India Limited (OIL)

� Hardy Exploration

Part II:

Indian Hydrocarbon Resources

India Hydrocarbon Resource Base

� Total Hydrocarbon resource base – 32 billion tons

� Established Inplace hydrocarbon – 9,50 billion tons

� Established Oil in place : 6,1 billion tons

� Established gas in place: 3,4 billion tons

� Established Ultimate recoverable reserves – 3,5 billion tons� Established Ultimate recoverable reserves – 3,5 billion tons

� Established Ultimate Oil reserves : 1,8 billion tons

� Established Ultimate Gas reserves : 1,7 billion tons

� Balance recoverable reserves – 1,8 billion tons

� Balance Oil reserves : 0,7 billion tons

� Balance Gas reserves : 1,1 billion tons

Learning to be adopted from Norway as regards EOR techniques to enhance

the recovery rate

Hydrocarbon Resources

Total Offshore Hydrocarbon Resources~ 18815 MMT

Total Onland Hydrocarbon Resources~ 9270 MMT

Note* - The hydrocarbon resources

in Deepwater Off East Coast is

likely to increase further by about

4000 MMT as per the

interpretation results of surveys

carried out by Directorate General

of Hydrocarbons, the govt.

upstream regulator

Basin wise Hydrocarbon Resources

Basin Offshore Onland Total (MMT )

Mumbai Offshore 9190 - 9190

Assam Arakan - 3180 3180

Cambay - 2050 2050Cambay - 2050 2050

Upper Assam - 1860 1860

Krishna-

Godavari

555 575 1130

Cauvery 270 430 700

Rajasthan - 380 380

Kutch 550 210 760

Basin wise Hydrocarbon Resources

Basin Offshore Onland Total (MMT )

Andaman-Nicobar 180 - 180

Kerala-Konkan 660 - 660

Saurashtra 280 - 280Saurashtra 280 - 280

Ganga Valley - 230 230

Bengal 30 160 190

Himalayan Foreland - 150 150

Mahanadi 100 45 145

Deepwater* 7000 - 7000

Part III:

Indian Sedimentary Basins

Sedimentary Basins

Indian Sedimentary basins - Facts• 26 Sedimentary Basins identified

• 7 basins have commercial production

• Total Sedimentary Area - 3.14 MM square KM including deepwater areas (~4% of

world sedimentary area)

• Approx. 22% area explored excluding deepwater area

• Sedimentary area distribution:• Sedimentary area distribution:

• Onshore (1.39 MM Sq KM)

• Shallow water up to 200 mts water depth (0.40 MM Sq KM)

• Deepwater (1.35 MM Sq KM)

• Almost 1/3 of the sedimentary area remains unexplored/poorly explored.

India seeks application of Norwegian experience for development of deepwater

fields.Opportunity for Norwegian business in India

Categorisation Of Sedimentary Basins (up to 200 Meters Isobath)

Category I – Basins with established Commercial Production

Basin Onland Offshore Total (Sq Km)

Cambay 51000 2500 53500

Assam Shelf 56000 - 56000

Mumbai Off - 116000 116000

KG 28000 24000 52000

Cauvery 25000 30000 55000

Assam Arakan 60000 - 60000

Rajasthan 126000 - 126000

Categorisation of Sedimentary Basins

Category II – Known accumalation of Hydrocarbons but no

commercial production as yet

Basin Onland Offshore Total (Sq Km)

Kutch 35000 13000 48000

Mahanadi -NEC 55000 14000 69000

Andaman

Nicobar

6000 41000 47000

Categorisation of Sedimentary Basins

Category III – Indicated Hydrocarbon – considered geologically

prospective

Basin Onland Offshore Total (Sq Km)

Himalayan Foreland 30000 - 30000

Ganga 186000 - 186000

Vindhyan 162000 - 162000

Saurashtra 52000 - 52000

Kerala Konkan - 94000 94000

Bengal 57000 32000 89000

Categorisation of Sedimentary Basins

Category IV – Uncertain potential which may be prospective by analogy

with similar basins in the world

Basin Onland Offshore Total (Sq Km)

Karewa 3700 - 3700

Spiti-Zanskar 22000 - 22000

Satpura 46000 - 46000

Narmada 17000 - 17000

Decan Syneclise 273000 - 273000

Bhima Kaladgi 8500 - 8500

Cuddapah 39000 - 39000

Pranhita-Godavari 15000 - 15000

Bastar 5000 - 5000

Chattisgarh 32000 - 32000

Part IV:Significant Discoveries and

prominent basins

Significant discoveries from 2000-2009

Offshore Field Location & Water Depths

1000m

4000m

2000m

3000m

100m

500m

4000m

Eastern Offshore •Small continental shelf•Steep slopes•Two monsoons, Operating window Jan - May•Cyclone & Tsunami affected

KG Basin

3000m

2000m

1000m

100m

Western

Offshore •Shallow – Large Continental Shelf

•Monsoon – July to October

Harsh environment and small weather window on East coast.Norway can be looked

upon as the most suitable partner.

Offshore Basins – West Coast

Kutch - Saurashtra Basin

Mumbai Offshore Basin

Prominent sedimentary basins on western coast of India are:

� Kutch - Saurashtra BasinCategory II basin

� Mumbai Offshore Basin

Kerala - KonkanBasin

� Mumbai Offshore BasinCategory I basin

� Kerala - Konkan BasinCategory III basin

Mumbai offshore has been the in production for more than 30 years

Deep water prospectivity on West coast is under study

Offshore Basins – East Coast

Prominent sedimentary basins on eastern coast of India are:

Mahanadi - NEC BasinCategory II basin

Krishna Godavari BasinKrishna Godavari BasinCategory I basin

Cauvery BasinCategory I basin

Krishna Godavari is believed to be the GoM for India with gas reserves of ~ 25 tcf

Some Deepwater blocks have started producing since last year

Part V:

Drilling Rig Scenario in India

Offshore rigs operating in Indian waters

Sr No. Operator Rig Type Number

Cantilever Jack Up 17

Cantilever HPHT Jack UP 2

Slot Jack Up 1

Mat Supported Jack Up 2

Mat Supported HPHT Jack Up 1

Semi-submersibles 2

1 Oil & Natural Gas

Corporation

Semi-submersibles 2

Drillships 4

Drilling Barge 1

30

Drillships 6

Semi-Submersibles 1

7

3 British Gas Cantilever Jack Up 1

1

4 Gujarat State Pet.Corp Semi-Submersibles 1

1

39

2 Reliance Industries

Ltd

Subtotal

Subtotal

Subtotal

Subtotal

Total

Upcoming requirement of Offshore Drilling rigs in India

Sr No. Operator Rig Nos. Rig Type Duration Timeline

6 Nos. Cantilever Jack Up - substitute rigs against de-hiring 3 years Q3 2011

3 Nos. Cantilever Jack UP 3 years Q2 2011

2 Nos. Floater 3 years Q2 2011

Shallow Water Drilling

Oil & Natural Gas

Corporation Limited

1

2 Nos. Floater 3 years Q2 2011

1 No. HPHT Mat Type 3 years Q3 2011

2 Cairn Energy 1 No. Cantilever Jack Up 2 years Q4 2012/Q1 2013

3 OIL India 1 No. Cantilever Jack Up 1 year Q1 2013

1 BHP Billiton 1 No Floater 2 years Q1 2015

2 Oil & Natural Gas Corp. Ltd 1 No. Floater 3 years Q4 2011/ Q1 2012

Deepwater Drilling

Part VI:

Opportunities - EPC Contracts

Opportunities for Norwegian companies in India

The Indian Oil & Gas sector looks upon Norwegian

companies as their preferred technology partner in the

fields of,

• Exploration in Western & Eastern Offshore

• New & Marginal Fields• New & Marginal Fields

• Deep waters in India

• Early exploration & development of NELP (New Exploration Licensing

Policy) Blocks

• Mature fields reservoir complexities

• Drilling Challenges in mature fields

• Completion problems

• Process/Production Challenges

• Offshore Logistics Challenges

Areas of Cooperation for Norwegian companies

Domain Activities Remarks

Drilling &

Completion

Well Design/ Drilling/

Completion at Western

Offshore

Well Bore stability in highly

heterogeneous carbonate reservoirs at

plateau stage

Deepwater Training/ Skill development Best PracticesDeepwater Training/ Skill development

in Deepwater/ Subsea

Best Practices

Field

Development

EOR/ IOR Activities Consultants for EOR/ IOR activities for

both Offshore & Onshore fields

Process Floating LNG Knowledge & Technology

Reservoir Mgmt. Fracture Delineation Highly heterogeneous multi layer

reservoir with various pressure zones &

unstable shale

Areas of Cooperation for Norwegian companies

Domain Activities Remarks

Marine Survey Geo-Hazards at Offshore For deepwater east coast

Logistics Construction of MSVs/ ISVs Competence enhancement in

Mari-time & Offshore Hiring/ acquisition of SAR

Mari-time & Offshore

operations

Hiring/ acquisition of SAR

Helicopters

Environment Platform de-commissioning /

Debris removal at Offshore

Talk with M/s Proserv carried

out. To be expedited

Security Offshore Security Technology & Mechanism

Renewable/

Alternates

Wind Mills at Offshore for power To reduce carbon foot print

Gas Hydrates Huge potential in India

Offshore projects under tendering

Sr.No Name of Project Purpose Estimated Timeline

of tender award

1 B-193 Pipeline

Project

Marginal Field

Development

Q1 2011

Project Development

2 B-46 Series Well

Platform

Marginal Field

Development

Q2 2011

3 B-46 Series

Pipelines

Marginal Field

Development

Q2 2011

4 WIN Revamp

Project

Revamp of existing

facility

Q2 2011

Total Investment envisaged with projects under tendering – US$ 780 MMTotal Investment envisaged with projects under tendering – US$ 780 MM

Upcoming Offshore projects

Sr. No Name of

Project

Facilities /

Scope of Work

Purpose Estimated

Timeline

1 WO-16 Well Platform Hydrocarbon

exploitation

Q4 2011

2 Conversion of Conversion of For O&G Q3 20112 Conversion of

Sagar Samrat

from MODU to

MOPU

Conversion of

Jack Up rig to

mobile product

unit

For O&G

processing

facility of

marginal fields

Q3 2011

3 Cluster-7

Development

Well platforms Hydrocarbon

exploitation

Q2 2012

Total Investment envisaged with upcoming projects – US$ 1866 MMTotal Investment envisaged with upcoming projects – US$ 1866 MM

Upcoming Offshore projects

Sr.No Name of Project Facilities / Scope of

Work

Purpose Timeline

4 SW work of G-

1/GS-15 field

development

Installation of

risers,hook-

ups,pipelines

Hydrocarbon

exploitation

on east coast

Q4

2011/Q1

2012development ups,pipelines

testing,modification

at GS-15-4

on east coast 2012

5 DW works of G-

1/GS-15 field

development

Subsea manifold

installation, laying

of umbilical,hook-

up testing and pre-

commissioning

Hydrocarbon

exploitation

on east coast

Q4

2011/Q1

2012

Upcoming Offshore Revamp projects

Sr.No Name of Project Facilities / Scope

of Work

Purpose Estimated

Timeline

6 Revamp of 39 well

platforms in Mumbai

High and Heera field

Revamp of well

platforms in

Mumbai offshore

Revamp of

existing

platforms

Q3 2011/ Q4

2011

High and Heera field Mumbai offshore platforms

7 Revamp of 13 well

platforms in Neelam

field

Revamp of 13

well platform in

Mumbai Offshore

Revamp of

existing

platforms

Q4 2011

8 Water Injection

South Revamp

Project

Revamp of

Platform

Revamp of

existing

platforms

Q3 2011

Upcoming Offshore Deepwater Project

Operator Project Detail Estimated

Timeline

Remark

Oil & Natural Gas

Corporation

Hiring FPSO for

D1 marginal filed

Q2 2012 DPS,UK has been

hired as

on west coast consultant

Hiring FPSO for

Cluster 7

marginal field on

west coast

Q3 2012 Tender is on for

consultant hiring

until Sept

26,2010

S1 Vashistha

field

development

Q4 2011 FEED awarded to

Pegasus-L&T in

July 2010

Upcoming Offshore Deepwater projects

Operator Project Detail Estimated

Timeline

Remark

Reliance

Industries Limited

KG-D6 Phase II

development

Q4 2011 Mustang-Bechtel

awarded the FEED

in August 2010

Gujarat State

Petroleum

Corporation

Process Platform

for Deendayal

development

Q3 2011 Re-tendering

Total Investment envisaged with upcoming deepwater projects – US$ 2 billion ++ Total Investment envisaged with upcoming deepwater projects – US$ 2 billion ++

Part VII:Case Study – Indo Norway

Successful Co-operation

Successful cooperation India-Norway

Project: Development of Dhirubhai-6 offshore deepwater field in the

Krishna- Godavari basin on the Eastern coast of India

Field Operator: Reliance Industries Limited, India

Subsea Contractor: Aker Solutions, Norway

Project Highlites:

• An upstream project with record discovery to development time of 7

years as against the world average of 9 - 10 years.

• First of its kind deepwater development project in India.

• The output from D6 field has doubled the national gas production levels

from 80mmscmd to 160mmscmd, drastically changing the natural gas

market in India.

Successful cooperation India-Norway

• The KG-D6 project is one of the world’s largest subsea engineering contract

valued at USD 400M

• The D6 field’s oil and gas producing ship Dhirubhai-1 is India’s first FPSO.

• Dhirubhai-1 has been constructed by Aker Floating Production and is one of • Dhirubhai-1 has been constructed by Aker Floating Production and is one of

the most advanced FPSO’s operating in any of the world’s oil and gas fields

today

• Aker Borgestad Operations has been awarded the operation and maintenance

contract for Dhirubhai-1 FPSO for 10 years

• According to Aker Solutions, a so complex deepwater project has never

before been delivered quicker from a supplier standpoint.

Cooperation between IN New Delhi and INTSOK

• INTSOK has entered into an agreement with IN New Delhi to hire

regional assistance for its partner companies in India free of cost for

five days annually

• The scope of the agreement in addition to the local assistance to • The scope of the agreement in addition to the local assistance to

INTSOK partner companies includes updates on the upcoming

opportunities as regards projects and tenders in the Indian market

• INTSOK and IN New Delhi are in process of hosting a Business

delegation to India in end October 2010 to facilitate a platform

wherein Norwegian companies can promote their niche technologies

to the Indian clients thereby establishing business relations

• The Business delegation will include the O&G sector

Part VIII:

INBDP

Info on INBDP’s:

2 Nos. INBDP projects under process.The reporst shall be submitted by

end December 2010.

1. EOR activities in Indian upstream sector: (Report by Dec 2010)1. EOR activities in Indian upstream sector: (Report by Dec 2010)

2. Pipeline Projects: (Report by Dec 2010)

1 No. INBDP project proposed for next year.The report shall be

submitted by end Deember 2011

1. Overview of LNG market in India

Part IX:

Conclusion

To Conclude..

• Immense possibilities are available for the Norwegian oil and gas companies in the Indian oil

and gas sector

• Field Development - 23 Exploratory wells in 2011 by ONGC

11 Developmental wells in 2011 by GSPC

• Rig Hire – 16 Nos. (14 Shallow & 2 Nos Deepwater )

• Rig Purchase – 3 to 4 Offshore rigs ( Capex US$ 850 MM)

• US$ 780 MM worth projects under tendering• US$ 780 MM worth projects under tendering

• US$ 1866 MM worth shallow water projects in near future

• US$ 2 billion ++ worth deepwater projects in coming 3-4 years

• With deepwater development projects taking place especially on the Eastern coast of India,

Norwegian companies, being the technology master, can play a key role. Remember Aker

Solutions.

• Bureaucracy, Corruption, Voluminous documentation requirements, etc. may pose as obstacles

to Norwegian companies desiring to make their mark in India

• Innovation Norway, New Delhi is just a mail/call away for answer to your queries to prosper in

this growing oil and gas market.

Thank you for your attention

Name: Tejas Sharma, Market Adviser

Address: Innovation Norway; New DelhiAddress: Innovation Norway; New Delhi

Royal Norwegian Embassy

50-C Shantipath, Chanakyapuri,

New Delhi – 110021

Contacts: +91-11-41779254

E-mail: tejas.sharma@innovationnorway.no

Web: www.innovasjonnorge.no