Presentation on theme: "Upstream Opportunities in India & Foray for equity Oil & Gas abroad B.Basu, ONGC, New Delhi 11 th Energy Summit, ASSOCHAM New Delhi, 17 October, 2008."— Presentation transcript:
Upstream Opportunities in India & Foray for equity Oil & Gas abroad B.Basu, ONGC, New Delhi 11 th Energy Summit, ASSOCHAM New Delhi, 17 October, 2008
The Presentation India: Energy Scenario India: Opportunities in Upstream Sector Foray for equity oil & gas abroad
3 16% of global population 0.5% of global Petroleum reserve 6.7% of world’s Coal reserve 8- 9% GDP growth rate target 4.5% CAGR in energy demand the Challenges are apparent…… India: The Energy context India's energy sector requires investment to the tune of $120-150 billion over the next 5 years to build increased capabilities and upgrade technology, says an industry report.
4 India: Energy scenario India: the 5 th largest energy consumer –CAGR (1996-2006): 4.5% (global CAGR: 2.1%) –Per Capita energy consumption projected to rise from 375 Kgoe in 2007 to about 1200 Kgoe in 2030 Source: BP Statistical Review 2008 Primary Energy Consumption (MMToe) 3.6% of total
5 India: Energy Scenario Source: BP Statistical Review 2008 WorldIndia Gas consumption in India increasing at a CAGR of >6.1% (Global: 2.6%) –next only to China in Asia Pacific(13%) in last decade
6 Source: BP Statistical Review 2008 India: Energy Scenario India: 4 th largest consumer of Oil (3.3% of total) –Oil consumption increased at CAGR of 4% (1997-2007) against the world CAGR of 1.4%.
Growing Primary Energy demand … India *Source: BP Statistical Review 2007figure Source: Integrated Energy Policy With development of East Coast, new & marginal fields of West coast, CBM, UCG, and likely trans-national gas trunk lines- the gas demand seems to be achievable For oil, though importer for over 25 years, considering the dramatic rise in volume demand, the balance of trade for oil is a critical issue 404 MTOE 1633 MTOE CAGR= 6% Gas CAGR= 7.9% Oil CAGR= 5.2%
India: Oil Scenario Import dependence increased from 69.5% in 2002-03 to 74.9% in 2007-08 Import dependence may rise to 80-90% around 2030 Growing Import Demand –Supply gap in Oil to exist MMT
Growing Dependence on Imports Over dependence on oil & gas leading to import dependence from 70-85% 92% Import dependent on geo-politically sensitive Middle East and Africa »37% of total M-East crude comes from Iraq & Iran »About 45% of total African crude comes from volatile Nigeria Source: PPAC
Source: BP Statistical Review 2008 India: Gas Scenario Gas constitutes ~9% in Primary energy basket; likely to increase, thanks to Gas strikes at East coast Situation to improve by 2012. Demand-supply gap to exist MTOE
11 Opportunity in supply… Gas Sector wise Gas Consumption projection (mmscmd) SECTOR2008-092009-102010-112011-12 Power91103114127 Fertilizer43528079 City Gas13141516 Industrial16171820 Petrochemicals/ Refineries/ Int. Con. 27293133 Sponge Iron/ Steel6778 Total196222265283 Only about 110 mmscmd available (80 Prodn. + 30 Import) against demand of 196 mmscmd Energy demand growth ~5%, gas demand growth~7% Power sector poised for more gas based generation Other industries, using liquid fuels, to shift to gas
Upstream Opportunities Indian Oil & Gas Business
Opportunity in E&P India has 4% sedimentary basins of the world (3.14 million sq. km) »About 80% area yet to be explored extensively »Out of 26 basins, exploration yet to be Initiated in 11. »Favorable open NELP regime »Abundant opportunities- New bidding, Farm-in
14 NELP: The success story Opportunity in E&P Total Blocks offered: 256, Awarded: 207
15 Discovery to Development … NELP Total Discoveries : 66 Discoveries under evaluation/appraisal : 42 Commerciality under evaluation : 6 Commerciality established : 18 Development Plan to be submitted : 7 Development Plan approved : 5 Development Plan under evaluation : 6 IOGIP ( commercial discoveries) : 5.86 Bbbls As on : September, 2008. Source: DGH Opportunity in E&P
16 NELP: Attracting Investment USD 3.9 Billion invested in NELP till March, 07 –30% by NOCs, 61% by Domestic Pvt & 9% by Foreign Investors USD 3.33 billion committed for NELP-VI Committed Investments in NELP (US$ million) RoundPhase-IPhase-IIPhase-IIITotal NELP-I244.14413.83493.661150.53 NELP-II287.85241.2246.5775.5 NELP-III414.5335.1388.91038.5 NELP-IV466.15367.2301.71135.1 NELP-V412238268917 NELP-VI20871230-3317 TOTAL3911.642825.331698.768333.63 Opportunity in E&P
17 The future: Open Acreage Licensing Policy(OALP) Possible broad framework Opportunity in E&P User defined blocks with certain constraints – 1 st party envisaging interest in the area any time Two types of bid Reconnaissance – short term, exit with no cost recovery Exploration – parallels NELP Exploration bid wins over a Reconnaissance bid every time If reconnaissance company loses subsequent exploration bid, it shall have some options to participate/recover cost as a prior right
India has a potential of becoming E&P technology & services hub. With significant increase in E&P activities there is need for high quality & cost effective technology, goods and other related services in the full value chain of E&P sector. Opportunity in E&P
19 Investment Environment Stable Political Environment and Growing Business Opportunities Competitive and transparent Fiscal regime with equal opportunity for NOCs and Global Investors Attractive Income Tax Regime (Sec 44BB including) VAT with credits, Goods & Services Tax with cross credits Reduction in Customs Duty, Very attractive SEZ Act 2005 Cost competitive work force Liberal policy for FDI in E&P Open to partnerships in India as well as for overseas opportunities Excellent Tax incentives in NELP projects Special Deep-water concessions High demand-driven market/ Freedom of marketing Skilled/ cost effective Manpower etc. (400 PG in Geosciences and Petroleum Engineering, 350,000 Engineers/Annum) Opportunity in E&P
MARKET SECTORS UPSTREAM Exploration MIDSTREAMDOWNSTREAM ProductionDevelopmentPower / LNG Chemicals, Metals etc. Engineering & Construction FabricationDrilling, Wells & Rigs Subsurface Services Consulting and Professional Services Operations Support & ProductionLogistics (marine, water, land, air) Opportunity in E&P The value chain : Opportunities
Opportunity in E&P Opportunities: Technology, Goods and Services Exploration Technology : Geo-scientific survey, data processing, G&G – Conventional, state of the art Drilling Services: onland, offshore( shallow and Deep), High Technology wells Field development and Reservoir management : Engineering and processes, IOR/EOR Information Technology : various Software applications Goods and Services: Drilling & oil field chemicals, consumables, array of hardware Management Services : financial, legal consulting and Project management
Opportunity in E&P ONGC to spend Rs 82670 Crore ( $ 17.2 Billion) in the XI Plan period ( 2007- 08 to 2011-12) $ 40 Billion investment expected up to 2012 by all players
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