Indigenisation of oil and gas exploration

Indigenisation of oil and gas exploration

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the Ministry of Petroleum & Natural Gas has constituted a Steering Committee comprising of the members drawn from the Ministry of Petroleum, Ministry of Commerce, Department of Industrial Policy and Promotion, various Oil PSUs and representatives from FICCI, CII and AOGO. The actionable areas identified by the Steering Committee in short term (one year) and medium term (three years) include:

(a) Suitable amendments in the public procurement norms to mandate aggregation of requirement and local content as procurement criteria as a short term initiative.

(b) A target of indigenisation of 50% in the upstream sector in the medium term

(c) Setting up of dedicated manufacturing zones/clusters catering to Oil field services such as ship building, offshore platforms and rigs in the medium term.

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Discussions Between Asian Suppliers and Consumers of Oil and Natural Gas

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the Government encourages engagements at multiple levels with oil and gas producing countries and global multi-lateral organizations active in the energy domain on a continuing basis, as a part of the overall policy efforts towards boosting India’s energy security. India’s dialogue with the member countries of International Energy Forum (IEF) has been useful from the point of view of gaining an enhanced understanding of global energy dynamics, particularly in the context of high crude / gas prices prevalent till mid-2014 and the volatility in the crude markets since mid-2014.

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Potential for Gas Hydrates in Bay of Bengal

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the National Gas Hydrate Programme (NGHP) Expedition – 01 has established the presence of gas hydrate on the east coast deep water basins of Krishna Godavari, Mahanadi and Andaman in the Bay of Bengal. Presently, there is no assessment of gas hydrate potential in Bay of Bengal. However, Hydrate Energy International has estimated resource potential of gas hydrate in India at 933 tcf.

The NGHP Expedition -02 carried out drilling and coring operations recently. The preliminary results of the NGHP Expedition – 02 in the Krishna Godavari Basin are encouraging.

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Savings Due to Fall in Crude Oil Prices

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that as per available information, due to reduction in the price of the crude oil in international market, import bill of the Public Sector Oil Companies has been reduced from ` 447615 crore in 2013-14 to ` 355382 crore in 2014-15.

However, such drop in the price of crude oil also results in the reduction in gross revenue of Public Sector Oil Companies engaged in production of crude oil. Similarly, Public Sector Oil Marketing Companies (OMCs) reduce the retail selling prices of Petrol and Diesel due to their linkage with international prices.

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Present Capacity of Barauni Refinery

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the present capacity of Barauni Refinery is 6 Million Metric Tonne Per Annum (MMTPA).

The capacity utilization and production of petroleum products in the Barauni Refinery during the last three years is given below:-

Year	Utilization (%)	Production (MMT)
2012-13	105.7	5.75
2013-14	108.0	5.95
2014-15	99.1	5.41

Indian Oil corporation Limited has informed that it plans to expand the capacity of Barauni Refinery from 6.0 MMTPA to 9.0 MMTPA in following two phases:-

Phase-I: Expansion from 6.0 MMTPA to 7.0 MMTPA

Phase-II: Expansion beyond 7.0 MMTPA to 9.0 MM

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Decline in Domestic Production of Oil and Gas

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that Crude oil and natural gas production in the country during last three years was as under:

	2012-13	2013-14	2014-15
Crude oil (MMT)	37.866	37.788	37.460
Natural gas (BCM)	40.68	35.406	33.657

The main reason for lower crude oil and gas production is due to natural decline in production from the ageing fields of ONGC and OIL. In addition, there was lower natural gas production from Krishna Godavari Basin.

In order to reduce import dependency on crude oil, Government has taken/is taking a number of initiatives to increase domestic production of crude oil and to promote conservation of petroleum products.

i. Enhance production from the existing field by adopting Improved Oil Recovery (IOR)/Enhanced Oil Recovery (EOR) measures using latest technology.

ii. Bring into production new discoveries at the earliest. For this a policy framework for early monetization of hydrocarbon discoveries under PSC regime has been approved by the Government.

This policy has addressed rigidities in the timelines of the PSC and has allowed the contractors to start production at the earliest.

iii. Facilitate enhanced exploration activities through following measures:

§ Appraisal of about 1.5 million sq km un-appraised area of the Indian Sedimentary Basins and acquisition of geo-scientific data under Multi client and non-exclusive policy.

§ Re-assessment of Hydrocarbon Resources.

§ Setting up of National Data Repository. Policy approved for exploration and exploitation of Shale Gas/Shale Oil resources by National oil Companies under the nomination regime.

§ Government approved the Policy on Testing Requirements for Discoveries in NELP blocks on 29.04.2015. The Policy would help in monetization of discoveries in five NELP blocks.

Besides, Petroleum Conservation Research Association (PCRA), under the Ministry of Petroleum & Natural Gas, has been given the mandate to promote conservation of petroleum products in the major sectors of economy like transport, industry, households and agriculture through direct technical assistance, R&D educational and training programmes and mass awareness campaigns. PCRA’s activities cover conservation of all energy sources, development, evaluation and commercialization of efficient equipment and additives, popularizing production of bio-fuels, environment protection etc.

Oil and gas companies in India continue to pursue acquisition of equity oil and gas abroad. The companies aim at acquiring a balanced portfolio of producing assets and those in development/exploratory phase. While most of the assets overseas are co-ordinated by the Corporate Office of the concerned companies, a skeletal strength is maintained at the assets which varies based on the actual requirement at field level. Details of overseas projects of oil and gas PSU’s are placed at Annexure.

Annexure

OVERSEAS PROJECTS/ASSESTS

S.NO.	Country	Name of Project	Participating companies along with P.I.
1. Vietnam		Block 06.1 (offshore)	OVL 45%, TNK-35% (Operator); PetroVietnam 20%
1. Vietnam		Block 128 (offshore)	OVL 100%
2. Sudan		GNPOC (Onland)	OVL 25%; CNPC 40% Petronas 30%; Sudapet 5%. Jointly operated
3. South Sudan		GPOC (Onland)	OVL 25%; CNPC 40%; Petronas 30% Nilepet 5% (Jointly operated)
3. South Sudan		SPOC (Block 5A), Onland	OVL 24.125%; Petronas 67.875%; Nilepet 8%. Jointly operated
4. Russia		Sakhalin-I (Offshore)	OVL 20%; ENL 30% (Operator) Sodeco 30%; SMNG-S 11.5% RN Astra 8.5%
		Imperial Energy (Onland)	OVL 100%
		License 61	Petroneft: 50% (Joint operator); OIL: 50% (Joint Operator)
5. Colombia		MECL (Onland)	OVL 25-50%; SIPC 25-50%; Ecopetrol 50% Jointly operated
		Block RC # 8 (Offshore)	OVL 40% – (Operator), Ecopetrol – 40%; Petrobras – 20%
		Block RC # 9 (Offshore)	Ecopetrol – 50% (Operator), OVL – 50 %
		Block RC # 10 (Offshore)	OVL-50% (Operator), Ecopetrol – 50%
		CPO-5 (Onland)	OVL-70% (Operator), Petrodorado-30%
		SSJN-7 (Onland)	PSE 50%(Operator), OVL 50%
		Gua off-2 (Offshore)	OVL-100%
		LLA-69 (Onshore)	OVL-50%, SIPC-50%
6. Syria		AFPC (Onland)	SSPD(Operator) 62.5 - 66.67 %, HES BV 33.33 TO 37.5 %
6. Syria		Block 24 (onland)	OVL 60%, IPR 25% (Operator), TOM (15%)
7. Venezuela		Sancristobal, PIVSA (Onland)	OVL 40%, PDVSA 60% Jointly operated
7. Venezuela		Carabobo Project-1 (Onland)	PdVSA-60%; Repsol-11% Petronas-11%; OVL-11% OIL-3.5% IOC-3.5% Jointly operated
8. Brazil		BC- 10 (offshore)	OVL 27 %; Shell 50% (Operator) & Petrobras 35%
		BM-SEAL-4 (Offshore)	Petrobras–75%(Operator), OVL- 25%
		Espirito Santo/Brasil	Petrobras- 40-70%, IBV Brasil* - 30%, Anadarko- 0-30%
		Campos/Brasil	Anadarko - 30%, IBV Brasil*-25%, BP - 25%, Maersk - 20%
		Sergipe/Brasil	Petrobras - 60%, IBV Brasil* - 40%
		Potiguar/Brasil	Petrobras - 30%, BP - 30%, IBV Brasil* - 20%, Petrogal - 20%
9. Azerbaijan		ACG	OVL-2.7213%;BP:-36% (Op) SOCAR-12%, Chevron-11% INPEX-11%, Exxon-8%, Stat Oil-8%, TPAO-7%, ITOCHU-4%
10. Myanmar		Block A-1 (offshore)	OVL 17%, GAIL 8.5%, Daewoo 51%(Operator), Kogas 8.5%,MOGE 15%
10. Myanmar		Block-A3 (offshore)	OVL 17%, GAIL 8.5%, Daewoo 51%(Operator), Kogas 8.5%,MOGE 15%
11. Iran		Farsi Offshore	OVL 40% (Operator), IOC 40%, OIL 20%
12. Mozambique		Rovuma Area-1 (Offshore)	OVL 16%, OIL 4%, Anadarko 36.5%, PTTEP 8.5%, BPCL 10%, ENH 15%, MITSUI 20%
13. Libya		Block 43 Contract Area (Offshore)	OVL 100%
		Area 86	OIL-50% (Operator) IOC-50%
		Area 102/4	OIL-50% (Operator) IOC-50%
		Area 95-96	Sonatrach-50% (Operator) OIL-25%; IOC-25%
14. Gabon		Block Shakthi	OIL-45%(Operator) IOC-45% Marvis Pte Ltd-10%
15. Iraq		Block 8 (onland)	OVL 100%
16. Bangladesh		Block SS-04 & SS-09	OVL-45% (Operator),OIL – 45%, BAPEX-10%
17. Nigeria		Block 285 {Block 279,29}	OMEL(O): 64.33% Total: 25.67% EMO: 10%
17. Nigeria		OML 142	Summit Oil -30% (Operator) Suntera Nigeria 205 Ltd-70%* * Suntera-50% OIL-25% IOC-25%
18. Kazakhstan		Satpayev	OVL-25%, Kazmunaygaz-75% (Operator)
19. East Timor		JPDA -06-103	Oilex (10%), Japan Energy (15%), Videocon (20%), GSPC (20 %), BPRJPDA (20%), Pan Pacific Petroleum (15%)
20. Canada		Pacific Northwest LNG Project	Progress Energy Canada Ltd ( 77%, Operator), Japex (10%), Petroleum Brunei(3%), IOC (10%)
21. Australia		EP 413	Norwest Energy NL(27.945%),BPRL (27.803%);ARC Energy Limited (44.252%)
21. Australia		T/L1 & T/18P	HPCL’s PI 11.25% & 9.75%
22. Indonesia		Nunukan	BPRL Venture Indonesia BV (12.5%), Pertamina (35%); MEDCO (40%); Videocon (12.5%)
23. USA		Niobrara Shale JV Asset	Carrizo Oil & Gas Inc., USA (60%) OIL India (USA) Inc. (20%) IOCL (USA) Inc. (10%) Haimo Oil & Gas LLC (10%)
23. USA		Eagle Ford Shale Gas Asset in Texas, USA	GAIL Global USA Inc (GGUI)- 20%, Carrizo Oil & Gas (Operator)-80%
24. Yemen		Block 82	Medco Energi - 45% (Operator) Kuwait Energy-25% OIL-15% IOC-15%
24. Yemen		Block 83	Medco Energi -45%(Operator) Kuwait Energy-25% OIL-15% IOC-15%

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Objection to New Gas Pricing Guidelines

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that government has received representations from domestic gas producers for allowing them freedom to sell gas at market determined prices. Representations have also been received from Association of Oil and Gas operators(AOGO), Confederation of Indian Industry(CII) etc. bringing out certain issues related with New Gas Pricing Guidelines, 2014. Some of the issues pointed out by these associations include:

• Inclusion of the Russian domestic price in the formula

• The deduction of prices to delivery point and treatment charges form the gas price

• Applicability of premium for only new discoveries post 1st November

• The new price formula contains parameters which are not relevant to a Hydrocarbon Deficit Economic like India

The prices considered in the new gas pricing formula are the closest approximations for the Market price for gas in the region. Russian domestic price has been included in the formulae as Russia is amongst the largest producers and consumer of natural gas in the world. Through the New Gas Pricing Guidelines 2014, Government has tried to maintain a fine balance between the interest of gas producing and consuming sectors. To incentivize domestic production of natural gas, Government while approving the gas pricing formula, has also approved a provision for grant of premium for new discoveries made in Deep water, Ultra Deep water and High Pressure High Temperature reservoir.

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Objection to New Gas Pricing Guidelines

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Kelkar Committee Report

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that a Committee under Dr. Vijay Kelkar has submitted its Report on Roadmap for Enhancing Domestic Oil & Gas Production and Sustainable Reduction in Import Dependency by 2030. The final report of the committee can be viewed on this Ministry’s website with the link http://petroleum.nic.in/docs/ FinalReportKelkarCommittee2014.pdf

The said report of the Committee is under consideration of the Government of India. After completing the examination of the Report, a view would be taken on the recommendations of the Committee expeditiously.

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Casual Labourers Working in Oil PSUs

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the details of casual labourers working in various oil PSUs are given below:

Name of Public Sector Undertakings (PSUs)	No. of casual labours	No. of workers on fixed term employment
Indian Oil Corporation Limited	30 (26 since November, 1998, 04 since May, 1999)
Bharat Petroleum Corporation Limited	Nil	01
Oil and Natural Gas Corporation Limited	436 (207 less than 20 years and 229 more than 20 years)	1190
Hindustan Petroleum Corporation Ltd.	28	Nil
Engineers India Limited	01 (Employed since 2003)	Nil
Balmer Lawrie & Co. Limited	Nil	243
Biecco Lawrie Limited	Nil	69

The casual labours in Oil and Natural Gas Corporation Ltd. are treated as departmental candidates and given first consideration in appointment against regular post as and when vacancy arises, subject to fulfilment of eligibility criteria as per Recruitment and Promotion Rules of the Company.

In Oil India Ltd., “identified contract labours” are given age relaxation to the extent of service rendered in the Company during normal recruitment process, subject to fulfilment of other eligibility criteria.

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Petroleum Minister Shri Dharmendra Pradhan leading Indian delegation for 22nd Steering Committee Meeting of TAPI natural gas pipeline project

The Minister of State (I/C) for Petroleum & Natural Gas, Shri Dharmendra Pradhan left for Ashgabat today to attend the 22nd Steering Committee meeting of TAPI natural gas pipeline project.

The meeting is happening in the wake of the recent visit of Hon’ble Prime Minister to Turkmenistan during 10-11 July, 2015 followed by the visit of Deputy Prime Minister of Turkmenistan Mr. Baymurat Hojamuhammedov on 21 July, 2015 wherein the progress of TAPI natural gas pipeline project was one of the important agenda points.

India remains committed to play its rightful role with responsibility in implementing the over 1800 kms gas pipeline which is expected to deliver natural gas to the tune of approx. 38 MMSCMD at India’s western border, thereby enhancing the nation’s energy security.

Shri Pradhan is accompanied by a high-level delegation including senior officials of MoPNG and MEA besides CMD, GAIL and MD, OVL.