January 15, 2019
India holds estimated oil and gas deposit of 28 trillion tonnes, of which 60 per cent is yet to be harnessed
Government is aiming to attract private and foreign technology and investment in developing resources
With help of new strategy, a 5% rise in recovery rate of in-place volume of oil output has been envisaged
The Ministry of Petroleum and Natural Gas has endeavored to “reform, perform and transform’ the sector
Government of India, under the leadership of Prime Minister Shri Narendra Modi, has taken proactive measures to boost the nation’s domestic crude oil and natural gas production. With the aim of cutting import, the Government has sought to ease up investment in the space through policy amendments and liberalisations. India holds estimated oil and gas deposit of 28 trillion tonnes, of which 60 per cent is yet to be harnessed. While India’s proven oil reserves stand at 635 million tonnes, proven gas deposits and estimated shale gas reserves are recorded at 54 trillion cu ft and 96 trillion cu ft, respectively. The aim here has been to attract private and foreign technology and investment in developing these resources.
In August 2018, the Government had put up 26 oil and gas assets for auction with reserves reportedly worth around US$14.3 billion. The bid round–II under the state’s Discovered Small Field Policy involved 60 discovered small fields with reserves in place of about 195 million tonnes. On the occasion, the Government also released the model revenue sharing contract and notice inviting offer for the bidding of assets. Such auctions have been encouraged by the Government’s liberalised Hydrocarbon Exploration Licensing Policy (HELP) as well other provisions to ease regulations and boost competition in oil and gas market. In the bid round–I in 2016, 46 areas were offered, out of which 34 had received over 130 bids.
In May 2018, an open acreage auction of 55 oil and gas blocks by Directorate General of Hydrocarbon, Indian energy regulator, had received 110 bids, asserting investor confidence in the sector. Since 2000, more than 250 blocks have been alloted to bidders. The Union Cabinet in September 2018 had approved a policy to promote and incentivize more efficient methods, including enhanced recovery (ER), improved recovery (IR) and unconventional hydrocarbon (UHC) production, to improve recovery factor of domestic hydrocarbons. This is in line with Central Government’s goal to cut India’s crude oil import by 10 per cent by 2022, as part of a broader strategy to make the nation independent in its energy consumption.
With the help of the new strategy, an increase by 5 per cent in recovery rate of original in-place volume of oil production has been envisaged, resulting in 120 million tonnes of additional oil in next 20 years. In case of gas, a rise of 3 per cent recovery rate on original in-place volume has been estimated, leading to additional output of 52 billion cubic metres of gas. The Government has been planning to offer up to 149 oil and gas fields that are currently operated by Oil and Natural Gas Corporation (ONGC) to private and foreign investors. By offloading these non-priority assets, the government-run oil and gas explorer is aiming to focus on its premium oil and gas fields, while simultaneously monetising the non-core ones.
Some of the leading developments in the oil and gas sector in 2018 were:
Energy is a key driver of economic growth and the Government of India’s focus has been to bring about transformational changes in the nation’s conventional energy landscape to fulfil the twin objectives of providing energy to all, while minimising the impact on climate. The Government has undertaken several reforms and accomplished major task with far-reaching impacts in the sectors of oil and gas exploration and production, transportation, refinery, marketing, natural gas as well as international collaborations. The Ministry of Petroleum and Natural Gas has endeavored to “reform, perform and transform’ the sector that is expected to boost investor confidence in India’s fast-growing energy market.