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PETROLEUM AND NATURAL GAS

Indian Minerals Yearbook 2013 (Part- III : Mineral Reviews)

52nd Edition


(FINAL RELEASE)

GOVERNMENT OF INDIA MINISTRY OF MINES

INDIAN BUREAU OF MINES

Indira Bhavan, Civil Lines, NAGPUR – 440 001

PHONE/FAX NO. (0712) 2565471

PBX : (0712) 2562649, 2560544, 2560648 E-MAIL : [email protected]

Website: www.ibm.gov.in

July, 2015

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39 Petroleum and Natural Gas

The domestic production of crude oil stood at37.9 million tonnes in 2012-13 which decreased

by 0.6% compared to the output in thecorresponding period of last year. Whereas, thenet production of natural gas (utilised) decreasedto 40,679 million cu metres in 2012-13 which is14.5% less as against the production in 2011-12.As on 01.04.2013, the refining capacity in thecountry was up by 2.0 million tonnes year-on-year(YoY) basis to touch 215.066 million tonnes. Withthis jump, India's share in total refinery capacityin the world has increased to 4.68 percent.

RESOURCESAs on 1.4.2013, total reserves of crude oil were

estimated at 758.27 million tonnes (331.43 milliontonnes in onshore and 426.84 million tonnes inoffshore areas). Those of natural gas are placedat 1,354.76 billion cu m (353.34 billion cu m inonshore and 1001.42 billion cu m in offshore areas)(Table - 1).

Table – 1 : Reserves of Crude Oil andNatural Gas in India as on 1.4.2013 (P)

(Crude oil in million tonnes;natural gas in billion cu m)

Area Crude oil Natural gas

Ind ia 758.27 1354 .76O n s h o r e 331.43 353.34

Andhra Pradesh 7 .42 48.21Assam* 178.07 181.77Gujarat 136 .73 77.53Tamil Nadu 9 .21 45.83

O f f s h o r e 426.84 1001 .42Western offshore @ 396.41 488.20Eastern offshore# 30.43 513.22

Source: Indian Petroleum and Natural Gas Stat is t ics ,2012-13, Ministry of Petroleum and Natural Gas,Govt. of India.

* Includes reserve in Arunachal Pradesh, Nagaland andTripura.

@ Includes Bombay High offshore, Rajasthan and JVCfor crude oil. Also includes Bombay High offshore,Rajasthan and Madhya Pradesh & Jharkhand (CoalBed Methane) in case of natural gas.

# Includes JVC/Private parties in case of crude oil andWest Bengal(Coal Bed Methane) in case of naturalgas .

EXPLORATION & DEVELOPMENTThe Oil and Natural Gas Corporation (ONGC)

and Oil India Limited (OIL), the two National OilCompanies (NOC) and a few private and jointventure companies were engaged in explorationand production activities of oil and natural gas,including Coal Bed Methane in the country. Ason 1.4.2013, there were in all 457 oil/gas fieldsunder these companies including offshore areas.

In public sector, ONGC's jurisdiction extendedto 384 fields – Cambay basin (Gujarat) – 88 oil/gas fields, Upper Assam – 36 fields and Assam &Assam Arakan – 7 fields, Jodhpur (Rajasthan) –7 fields, Krishna-Godavari basin (Andhra Pradesh)– 58 fields, Cauvery basin (Tamil Nadu) – 32 fields,Assam & Assam Arakan in Tripura - 11 fields andAssam & Assam Arakan in Nagaland – 3 fields,Mizoram - 1 field, Vindhyan basin (MadhyaPradesh) - 1 field, besides, 90 offshore fields inthe Mumbai offshore, six in Kachchh, three inCambay basin in West Coast and 41 offshore fieldsin Cauvery, Mahanadi, Andaman and Krishna-Godavari basins (shallow and deep) in East Coast.OIL, a public sector company was engaged in 19fields – Upper Assam basin in Assam (14 fields)and Arunachal Pradesh (1 field), Jaisalmer basin(Rajasthan) (3 fields) and Bikaner-Nagaur basin(Rajasthan) - 1 f ie ld. Pr ivate/Joint venturecompanies were engaged in 54 oil/gas fields -Cambay basin (Gujarat) at 28 fields, Kharsangbasin (Arunachal Pradesh) at 1 field, Amguri basin(Assam) at 1 field, Jharia & Bokaro (Jharkhand) at1 field (CBM) each, Sohagpur (Madhya Pradesh)at 2 field (CBM), Rajasthan at 7 fields and RaniganjEast basin (West Bengal) at 2 field in onshoreareas. In offshore areas, these companies covered2 fields in Cauvery basin and 4 fields in Krishna-Godavari basin on the East Coast and 3 fields inMumbai basin and 2 fields in Cambay basin onthe West Coast.

Highlights of exploration carried out byONGC and OIL during 2012-13 are furnishedbelow:

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During 2012-13, ONGC carried out seismicsurveys and acquired 140.97 GLKM of 2D and844.25 SKM of 3D seismic data in the onland area.A total of 74 exploratory wells with a meterage of225,912 and 323 development wells with a meterageof 680,722 have been drilled.

Exploratory efforts of ONGC during 2012-13resulted in 22 oil and gas discoveries (14 onlandand 8 offshore areas) in domestic fields. Out ofthese, 12 discoveries were made in the newprospects, whereas 10 were new pool discoveries.Nine discoveries were made in New ExplorationLicensing Pol icy blocks and thirteen in thenomination blocks. The new discoveries madeduring the year were: Phulani-1 in Assam & AssamArakan basin, Vadata l -5 in Cambay basin,Koravaka-1, Bantumilli South-1, Mukkamala-1 andVanadurru South-1 in onland Krishna-Godavaribasin, KGOSN041NASA-1 (Saveri#1) in KGOffshore, KGD051NAA-1 in KG deep-waterof fshore, Pandanal lur -8 , Madanam-3 andPandanal lur-7 in onland Cauvery basin andMBS051NBA-A in Western Offshore basin. Thenew pool discoveries made during the year were:Agartala Dome-37 in Assam & Assam-Arakan Foldbelt, Mandapeta West-12 in onland KG basin,KG-DWN-98/2-A-2 in KG deep-water offshore,C-39-14, BH-68, D1-D1 in Mumbai Offshore,Aliabet-4 in Gulf of Cambay & Anklav-9, Motera-36 and Mansa-36 in Western onland.

ONGC as a consortium has been awardedseven blocks (five on land and two shallow waterblocks) in the NELP-IX round and PSC was signedin March 2012. Out of 7 blocks, ONGC is theoperator in 5 blocks and OIL in 2 blocks.

The ultimate reserve accretion of oil and oilequivalent gas (O+OEG) in 2012-13 in domesticassets of ONGC was 60.50 million tonnes. Thetotal ultimate reserves of oil and oil equivalentgas (O+OEG) of ONGC as on 1.4.2013 was 2,691.64million tonnes.

During 2012-13, OIL covered, under onshoreseismic survey, 223.77 (GLKM) of 2D and 304.52(SQKM) of 3D in Assam & Arunachal Pradesh and1490.76 (SQKM) of 3D in Rajasthan. OIL carriedout exploratory and development onshore drillingof 126,408 m in 35 wells in Assam and 2,497 mdrilling in 2 wells in Rajasthan.

The details of discoveries of oil/gas made byOIL during 2012-13 are given below:

i) NHK-600: This well is located in an isolatedfault block in the eastern part of Zaloni structureof Hugrijan ML and was drilled to a depth of 3311mwithin Barail Arenaceous to probe the UpperTipam prospect as primary target and Barail Thirdsand prospect as secondary target. The well hasencountered a number of prospective sand rangeswithin Tipam and Girujan formations. On testing,the well produced gas from Tipam formation.

i i ) Moran-1 16: The wel l , located in theDimowkinar Structure within Moran ML wasdrilled down to a depth of 4280 m within Basementto probe the hydrocarbon prospects within Barailand Lakadong + Therria formations. The well hasencountered a few prospective sand ranges withinLakadong + Therria formation and is currentlyproducing oil from one of the tested sands.

iii) Balimara-2: This exploratory well lies in theBalimara structure and is located between Umataraand Jaipur structure within Borhat PEL. The wellwas drilled down to a depth of 4408 m within Barailformation to probe the hydrocarbon prospectswithin Tipam and Barail formations. The well hasencountered prospective sand ranges withinthese formations, producing oil from one of thetested Barail sand.

iv) East Khagorijan-1: The well, located in theEast Khagorijan structure within Tinsukia ML wasdrilled down to a depth of 3716 m within Basementto probe the hydrocarbon prospects within LowerEocene-Paleocene Formations. The well hasencountered a number of prospective sand rangeswi th in these Format ions and is cur rent lyproducing oil from one of the tested Lakadong +Therria sands.

v) NHK-531: The well is located in the Lohali-Deohal st ructure wi th in Hugr i jan ML. Thediscovery was made from the new/unappraisedBarail sand during workover operations producinggas while testing.

vi) Barekuri-12: This well, located in the easternfault block of the West Barekuri structure withinDumduma ML was drilled to a depth of 4027 mwithin Basement to probe the hydrocarbonprospects wi th in Lower Eocene-Paleocene

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formations. The well has encountered prospectivesand ranges within the Narpuh and Lakadong +Therria Formations, producing oil from the latteron testing.

vii) NHK-581: The well is located in the Dhuliajanarea within Hugrijan ML. The discovery was madefrom the new/unappraised Upper Tipam sandduring workover operations producing gas duringtesting.

viii) Singhibil-1: This well, located in the Singhibilstructure within Hugrijan ML was drilled to adepth of 4102 m within Basement to probe thehydrocarbon prospects within Tipam, Barail andLower Eocene-Paleocene Formations. The well hasencountered few prospective sand ranges withinBarai l and Lakadong + Therria Formations,producing gas during initial production testingfrom the latter.

ix) NHK-141: The well, located in the Naharkatiyaarea wi th in Naharkat iya extension ML hasdiscovered gas on testing the new/unappraisedUpper Tipam sand during workover operations.

x) Punam-1: The well, located in the PunamStructure in NELP VI Block RJ-ONN-2004/2 &Baghewala PML was drilled down to a depth of1297 m within Basement. The well has encounteredone heavy oil bearing sand within the Jodhpurformation, which has been tested, and anotherprospective sand range within the HEG sand.

xi) TVW -2: The well, located in the TavriwalaStructure of Baghewala PML was drilled down toa depth o f 1200 m wi th in Basement andencountered one heavy oil bearing sand within

the Jodhpur formation, which has been tested.

The ultimate reserve accretion of oil & oilequivalent gas (O+OEG) in 2012-13 by OIL was10.62 million tonnes. The total reserves of crudeoil and natural gas estimated by OIL at the end of2012-13 (as on 31.3.2013) were 240.69 milliontonnes and 187.90 billion cu m, respectively.

RIL ’s PerformanceThere are 4 b locks which are under

development and production including KG-D6 inKrishna Godavari offshore basin, Panna-Muktaand Tapti in Mumbai offshore basin and NEC-25in the Mahanadi basin.

KG-D6 Block: The KG-D6 fields produced336 BCF of natural gas and 3.31 million barrels(MMBBL) of crude oil and condensate in 2012-13,reduction of 41% in case of liquid portion and 39%in case of natural gas on a Y-o-Y basis. The averageproduction during the year was at 26 millionmetric standard cubic meter per day (MMSCMD) ofnatural gas and 9,225 barrels of oil per day (BOPD)of crude oil. The fall in production is mainly attributedto geological complexity, natural decline in thefields and higher than envisaged water ingress.

To augment production from the current fields(D1-D3 and MA), various Base Managementactions have been planned for maximising valuefrom these fields. These include work overs, sidet racks, compressor, enhancement o f waterhandling capacity and a new well in the MA fieldto be under taken in 2013-14. The f ie lddevelopment plan for R-Cluster, submitted inJanuary 2013, proposed to maximise infrastructureutilisation of existing D1 and D3 hub. Similarly,development of all satellite discoveries is beingplanned as part of an integrated concept.

Addi t iona l ly, potent ia l ups ide throughresource accret ion is be ing targeted byundertaking exploration drilling in the existingproduction area with the approval of Governmentof India. Currently, MJ1 exploratory well in D1-D3ML area is under drilling. The well is targeting theMesozoic synrift clastic petroleum system, similarto the MA oil and gas field.

Panna-Mukta and Tapti (PMT) Block: During2012-13, PMT JV achieved the s igni f icantmilestone of 500 million barrels of oil equivalent(MMBOE) of oil and gas production. Panna-Muktafields produced 8.2 MMBBL of crude oil and71 BCF (billion cubic feet) of natural gas in2012-13, a reduction of 19% in case of crude oiland maintained production in case of natural gason Y-o-Y basis. The decrease in oil was due tonatural decline, deferment of Panna-L wells andlower- than-expected o i l ga ins f rom wel linterventions. Tapti produced 0.54 MMBBL(million barrel) of condensate and 43.9 BCF ofnatural gas in 2012-13, a decline of 40% and 41%respectively, on Y-o-Y basis. The decrease wasdue to a natural decline in reserves and under-performance of a few wells.

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In PMT, the current level of production fromthese fields is 7.9 MMSCMD (million metricstandard cubic meter per day) of gas and 20,400BOPD of oil/condensate. To address the issue ofdeclining production, the projects includingdevelopment wells, infill wells, well interventionactivities, Tapti gas compression modification andPanna well-head gas lift facilit ies have beenplanned in the medium term. As part of theseinitiatives, PMT JV has already completed furtherinfill wells in Mid Tapti and one in South Tapti.Together, these are currently producing gas andoil at the rate of 0.80 MMSCMD. PMT JV has alsoidentified to complete further infill wells along withsix wells in Panna-L area in 2013-14.

Addit ional ly, Mukta-B development anddrilling of exploratory prospects in Greater MidTapti have also been planned for future. Mukta-Bdevelopment studies are being undertaken tocont inuously assess and def ine a potent ia ldevelopment plan.

Other Blocks (NEC-25): The Company hassubmitted an Integrated Block Development Plan(IBDP) for four discoveries (D-32, D-40, D-9 andD-10) propos ing for a phased mannerdevelopment. During the current year, the key pre-deve lopment act iv i ty such as conceptua lengineering was completed in order to facilitatethe finalisation of development plan. Further, RILhas submitted a proposal for drill stem testing(DST) in J-Series discovery to DGH.

Domestic Exploration BlocksApart from KG-D6, Panna-Mukta & Tapti and

NEC-25 blocks, RIL currently holds nine blocks inGujarat Saurashtra, Krishna Godavari, Cauvery,Cambay and Mahanadi basins. The explorationcampaign in the forthcoming year is likely to targetKrishna Godavari and Cauvery basin.

As part of the appraisal program for CY-D6block reviewed by the Management Committee,new 3D seismic was acquired and also oneappraisal well was drilled. The result of the sameis under evaluation.

Currently, conventional business portfolio ofRIL includes 13 Production Sharing Contracts(PSC) blocks in India of which nine are in the active

exploration/appraisal phase. There are four blockswhich are under development and productionincluding KG-D6 in Krishna Godavari offshorebasin, Panna-Mukta and Tapti in Mumbai offshorebasin and NEC-25 in the Mahanadi bas in.Incrementa l ly, there are 4 PSC b locks ininternational arena, which includes 2 blocks eachin Yemen and Peru.

Coal Bed Methane (CBM)Development activities are progressing in

RIL’s two CBM blocks (Sohagpur East and West)with first gas being targeted in 2014-15. Thedevelopment phase for these blocks has beenextended till December 2014 for Sohagpur East andOctober 2014 for Sohagpur West. RIL is awaitingapproval for its gas pricing formulae, submittedto Ministry of Petroleum & Natural Gas (MoPNG)in September 2011.

During 2012-13, Petroleum and Natural GasRegula tory Board had inv i ted b ids fordevelopment of Shahdol-Phulpur Natural GasPipeline which will connect the RIL’s SohagpurCBM blocks to the HVJ line at Phulpur and willenable RIL to market the CBM gas on the national

gas grid.

PRODUCTIONPetroleum (Crude)

Production of petroleum (crude) in thecountry stood at 37.9 million tonnes in 2012-13registering a decrease of 0.6% as compared to thatin the previous year. Bulk of the total production(69.3%) was shared by the publ ic sectorcompanies. Private sector companies accountedfor the remaining 30.7%.

Offshore areas continued to be the largestproducer of petroleum (crude) in 2012-13 with ashare of 48.7% of the country’s total output. Inthe onland area, the biggest contribution camefrom Rajasthan with 22.7% share, followed byGujarat with 14.1%, and Assam with 12.8%. Theremaining 1.7% production was reported byAndhra Pradesh, Tamil Nadu and ArunachalPradesh.

During 2012-13, the production of petroleum(crude) recorded increase in Rajasthan by 31.2%,

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and Arunachal Pradesh by 2.5%, whereas, therewas a decline in production in offshore areas by8.2%, Gujarat by 7.8%, Tamil Nadu (3.6%), AndhraPradesh (3.3%) and Assam (3.2%) as compared tothe previous year (Table - 2).

Natural Gas (Utilised)The production of natural gas (ut i l ised)

was recorded at 40,679 mill ion cu metres in2012-13 which was 14.5% less compared to the47,559 million cu metres registered in 2011-12.

Offshore areas continued to be the largestproducers of natural gas (utilised) with a share of78.2%. Assam/Nagaland were the leading producerin the onland area with 7.1% share, followed byGujarat 5%, Andhra Pradesh & Tamil Nadu (3%each), Rajasthan (1.7%), Tripura (1.6%). ArunachalPradesh & West Bengal accounted for theremaining 0.4% of the total production.

Statewise analysis revealed that West Bengal,Rajasthan, Assam/Nagaland, Tr ipura andArunachal Pradesh recorded an increase inproduction, whereas, offshore areas, Gujarat,Andhra Pradesh and Tami l Nadu recordeddecrease in production of natural gas in 2012-13as compared to the previous year.

The production of natural gas increased inWest Bengal by 27.4%, Rajasthan by 16.1%,Arunachal Pradesh by 2.5%, Tripura by 0.5%, andAssam/Nagaland by 0 .2%. The dec l ine inproduction was recorded in offshore areas by17.3%, Andhra Pradesh by 8.4%, Gujarat by 6.5%and Tamil Nadu by 6.1%.

As much as 64.4% share o f the to ta lproduction came from the public sector companies,whereas, the remaining 35.6% was accounted tothe private sector companies during the year2012-13 (Table - 3).

Domestic prices of petroleum (crude) in2010-11 to 2012-13 are furnished in Table-4.

INDUSTRYThe total refining capacity of 22 units in

operation in the country was about 215.066 milliontpy in April 2013, with a share of about 4.68% inthe est imated wor ld re f inery capac i ty o f

4,593.2 million tpy during year 2012. In 2012-13,re f inery crude throughput increased to219.21 million tonnes from 204.12 million tonnesin 2011-12 (Table-5).

In the next few years, about 30.0 milliontonnes of additional refining capacities in bothbrownfield and greenfield expansion are reportedlyexpected to come on stream. The new refineriesthat are under implementation and coming up inthe near future are Indian Oil Corporation Ltd,Paradeep, Odisha (15.0 million tonnes), NagarjunaOil Corporation Ltd, Cuddalore, Tamil Nadu(6.0 million tonnes), and Hindustan Petro ChemicalLtd, Barmer, Rajasthan (9.0 million tonnes).

During the 12th five year plan period, capacityaugmentation to the tune of 53.1 million tonnesare planned as per annual report of Ministry ofPetroleum & Natural Gas. Out of these, 32.1 milliontonne of capacity expansion is planned by PSUrefineries. The capacity expansion by JV andprivate refineries during the same period areplanned for three million tonnes and 18 milliontonnes, respect ively. The capacity of Essarrefinery, Vadinar, Gujarat is expected to rise by18 million tpy after brownfield expansion. Thecapacity augmentation at Bharat Oman RefineryLtd, Bina, M.P. plans to achieve 9.0 million tpy innear future.

Production of various petrochemicals fromthese refineries during 2010-11 to 2012-13 isgiven in Table-6.

CONSUMPTION Total consumption of petroleum products

(excluding Ref inery Boi ler Fuel) increasedto 156.529 mil l ion tonnes in 2012-13 from148.133 million tonnes in 2011-12.

Consumption of Petroleum Coke increased by62.1%, Naphtha + NGL by 10.0%, Motor Spirit by5%, HSDO by 6.8%, and LPG 1.7% during 2012-13as compared to that of during 2011-12, where asthe consumption of Kerosene declined by 8.8%,ATF by 4.80%, LDO by 3.8%, and Furnace Oil/LSHS by 17.4% during 2012-13.

The consumpt ion of var ious petro leumproducts from 2010-11 to 2012-13 is given inTable-7.

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Table – 2 : Production of Petroleum (Crude), 2010-11 to 2012-13(By States)

(Quantity in '000 tonnes; value in L'000)

2010-11 2011-12 2012-13(P)State

Quantity Value Quantity Value Quantity Value

India 37684 688041255 38090 695454076 37862 691291211

Public sector 28002 511265556 27563 503250215 26222 478765996

Private sector 9682 176775699 10527 192203861 11640 212525215

Andhra Pradesh 305 5568745 305 5568745 295 5386163

Arunachal Pradesh 116 2117949 118 2154465 121 2209240

Assam 4721 86196867 5025 91747355 4863 88789529

Gujarat 5905 107814553 5780 105532280 5331 97334357

Rajasthan 5149 94011369 6552 119627595 8593 156892541

Tamil Nadu 233 4254156 247 4509771 238 4345447

Offshore 21255 388077616 20063 366313865 18421 33633934

Table – 3 : Production of Natural Gas (Utilised), 2010-11 to 2012-13(By States)

(Quantity in million cu metres; value in L'000)

2010-11 2011-12 2012-13(P)State

Quantity Value Quantity Value Quantity Value

India 52219 334253819 47559 304425159 40679 260386279

Public sector 25445 162873445 25950 166105950 26188 167629388

Private sector 26774 171380374 21609 138319209 14491 92756891

Andhra Pradesh 1386 8871786 1363 8724563 1249 7994849

Arunachal Pradesh 44 281644 40 256040 41 262441

Assam/Nagaland 2680 17154680 2905 18594905 2910 18626910

Gujarat 2262 14479062 2173 13909373 2032 13006832

Rajasthan 432 2765232 590 3776590 685 4384685

Tamil Nadu 1119 7162719 1285 8225285 1206 7719606

Tripura 610 3904610 644 4122244 647 4141447

West Bengal# (CBM) 41 262441 84 537684 107 684907

Offshore 43645 279371645 38475 246278475 31802 203564602

# Includes Jharkhand and Madhya Pradesh.CBM: Coal Bed Methane Production.

Table – 4 : Prices of Petroleum (Crude), 2010-11 to 2012-13(In Lper tonne)

Grade Market 2010-11 2011-12 2012-13

Indigenous* Onshore 28829 41143 43656Indigenous* Offshore 31525 42902 46134Indigenous* Offshore & Onshore 30614 42293 45295Imported c.i.f. Indian Port (average) 27535 38444 42389* *

Source: Indian Petroleum & Natural Gas Statistics, 2012-13 for indigenous crude prices and DGCI&S,Kolkata foraverage imported crude prices.

* Relates to basic prices of petroleum crude is all inclusive Gross (pre-discount) price and linked to internationalcrude prices.

* * From M&MS Division, IBM.

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Table – 5 : Installed Capacity and Crude Thr oughput in Refineries(In '000 tonnes)

Refinery Crude throughput

Refinery Annual installed capacity

(as on 1.4.2013) 2010-11 2011-12(R) 2012-13(P)

Total 215066 196989 204121 219212

Public/Joint Sector 120066 115311 120895 120303

IOCL, Guwahati, Assam 1000 1118 1058 956

IOCL, Barauni, Bihar 6000 6207 5730 6344

IOCL, Koyali, Gujarat 13700 13561 14253 13155

IOCL, Haldia, West Bengal 7500 6878 8072 7490

IOCL, Mathura, Uttar Pradesh 8000 8880 8202 8561

IOCL, Bongaigaon, Assam 2350 2008 2188 2356

IOCL, Digboi, Assam 650 651 622 660

IOCL, Panipat, Haryana 15000 13660 15496 15126

BPCL, Mumbai, Maharashtra 12000 13020 13355 13077

BPCL (formerly KRL), Kochi, Kerala 9500 8699 9472 10105

HPCL, Mumbai, Maharashtra 6500 6638 7506 7748

HPCL, Visakh, Andhra Pradesh 8300 8200 8682 8028

CPCL, Manali, Tamil Nadu 10500 10104 9953 9105

CPCL, Narimanam, Tamil Nadu 1000 703 611 640

MRPL, Mangalore, Karnataka 15000 12662 12798 14415

NRL, Numaligarh, Assam 3000 2252 2825 2478

ONGC, Tatipaka, Andhra Pradesh 66 69 69 57

Joint Venture 15000 - 2048 10636

Bharat Oman Refineries Ltd, Bina@ 6000 - 2048 5732

HPCL, Bathinda# 9000 - - 4904

Private Sector 80000 81678 81179 88273

RIL, Jamnagar, Gujarat 33000 31198 32497 32613

RIL (SEZ), Jamnagar, Gujarat 27000 35607 35186 35892

Essar Oil Ltd,Vadinar, Gujarat 20000 14873 13496 19769

Figures rounded off.

Source: Indian Petroleum and Natural Gas Statistics, 2012-13, Ministry of Petroleum & Natural Gas, Government of India.

@ BORL is a joint venture company promoted by BPCL and Oman Oil Company Ltd (OOCL), Commissioned in May 2011.

# HPCL & Mittal Energy Investment Pvt. Ltd, a Joint venture, Bathinda commissioned in April 2012.

Note: 1. CPCL and BRPL are subsidiaries of IOCL; NRL of BPCL and MRPL of ONGC.

2. Excludes other inputs from RIL refineries crude throughput during 2010-11, 2011-12 & 2012-13 .

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Table – 6: Production of Petroleum Products from Refineries, 2010-11 to 2012-13(In '000 tonnes)

Product ionProduct

2010-11 2011-12(R) 2012-13(P)

A) FROM CRUDE OIL 190316 198561 213219(a) LPG 7 5 4 1 7 3 3 3 7 6 9 4(b) Mogas 26138 27186 30118(c) Naphtha 17535 17135 17354(d) Kerosene 7 7 0 2 7 7 8 9 7 8 6 8(e) ATF/RTF/Jet A-1 9 5 7 0 10051 10077(f) HSD 78040 82864 91085(g) LDO 590 502 400(h) Furnace oil 18659 16732 13690(i) LSHS/HHS/RFO 1 8 6 0 1 7 0 1 1 3 6 4(j) Fuel Oils* 20519 18433 15054(k) Lube oils 884 1 0 2 8 896(l) Bitumen 4 4 7 8 4 6 1 0 4 6 7 0(m) Petroleum coke 2 7 1 1 7 8 3 7 10943(n) Total Waxes 6 7 5 4 5 7(o) Others 14542 13740 17003

B) FROM NATURAL GAS LPG 2 1 6 8 2 2 1 4 2 1 3 0

Source: Indian Petroleum & Natural Gas Statistics, 2012-13, Ministry of Petroleum & Natural Gas, Government of India.Note: Include production of RIL SEZ in the year 2010-11, 2011-12 & 2012-13 which includes other inputs.* Fuel Oil figures not included in total.

Table – 7 : Consumption of Petroleum Products, 2010-11 to 2012-13( In ’000 tonnes)

Product 2010-11 2011-12 2012-13* (P)

1. L ight d is t i l la tesof wh ich 41443 43870 46351

(a) LPG 14331 15350 15605(b) Motor Spiri t 14194 14992 15744(c) Naphtha+NGL 10676 11222 12342(d) Others 2 2 4 2 2 3 0 6 2 6 6 0

2. Middle d is t i l la tesof which 75029 79415 82795

(a) SKO 8 9 2 8 8 2 2 9 7 5 0 2(b) ATF 5 0 7 8 5 5 3 6 5 2 7 0(c) HSDO 60071 64750 69174(d) LDO 455 415 399(e) Others 497 485 450

3. Heavy ends of 24568 24848 27383 which

(a) Furnace oil/LSHS 10789 9 3 0 7 7 6 8 3

(b) Lubes & greases 2 4 2 9 2 6 3 3 2 6 8 5(c) Bitumen 4 5 3 6 4 6 3 8 4 6 5 8(d) Petroleum coke 4 9 8 2 6 1 3 8 9 9 4 7(e) Others 1 8 3 2 2 1 3 2 2 4 1 0

Total (1+2+3) 141040 148133 156529

Source: Indian Petroleum & Natural Gas Statistics,2012-13, Ministry of Petroleum & Natural Gas, Government of India.* Excludes data in respect of RIL SEZ Refinery as it is presumed that all products have been exported and not consumed domestically.Notes: Consumption data includes private sales & private imports also.

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ALTERNATIVE SOURCESWith the ever-increasing dependence on

petroleum imports due to stagnant domesticproduction and spiralling growth in demand, theGovernment is encouraging the development ofalternative sources of hydrocarbons. To give afil l ip, the Government has initiated vigorousexploration & development for coal bed methane,

gas hydrates, hydrogen, bio-diesel and ethanol.

Coal Bed MethaneCoal bed Methane (CBM), is an eco-friendly

natural gas stored in coal seams, generated duringthe process of the coalification. The coal andlignite seams contain varying amounts of methanedepending on the rank of the carbonaceous matter,the depth of burial and the geotectonic setting ofbasins. CBM exploration and exploitation has animportant bearing on reducing the green houseeffect , and extract ion of the CBM throughdegassing of the coal seams prior to mining ofcoal is a cost effective means of boosting coalproduction and maintaining safe methane level inworking mines.

India has the fourth largest proven coalreserves in the wor ld and therefore, holdss ign i f icant prospects for exp lora t ion andexploitation of CBM. In order to harness CBMpotential in the country, the Government of Indiaformulated CBM policy in 1997 to provide levelplaying platform for exploration and commercialexploitation of CBM by national and internationalentrepreneurs.

CBM b locks were o f fered throughinternational competitive bidding for explorationand production of CBM in the country for the firsttime in May 2001. So far, under CBM policy, theGovernment has awarded 30 CBM blocks in fourrounds of bidding to National, Private & JointVenture Companies. In addition, 2 CBM blockswere awarded on nomination basis and one blockthrough Foreign Investment Promotion Board(FIPB) route. These CBM blocks are in the statesof Andhra Pradesh, Assam, Chhattisgarh, Gujarat,

Jharkhand, Madhya Pradesh, Maharasht ra ,Odisha, Rajasthan, Tamil Nadu and West Bengal.

The estimated CBM resources are of the orderof 2600 Billion Cubic Metres (BCM) or 91.8 Trillioncubic feet spread across 11 states in the country.Out of these, about 280.3 BCM (9.90 TCF) of CBMreserves have been established as recoverable bydifferent operators as on 01.01.2014.

Within the next few years, CBM is expectedto emerge as a new source o f natura l gasproduction in the country. India has emerged asthe fourth country in the wor ld capable ofproducing CBM on commercial scale with thecommencement of commercial production fromJuly 2007 in Raniganj (South) block in WestBengal operated by Great Eastern EnergyCorporation Limited (GEECL). Current productionin the block is about 0.32 MMSCMD (million metricstandard cubic meter per day). Additionally, twoblocks, Raniganj (East) block operated by EssarOil Limited is producing @ 0.14 MMSCMD andJharia operated by ONGC is producing @ 10,000standard cubic meter per day (SCMD). Some moreCBM blocks are expected to start commercialproduct ion in near future. The total CBMproduction is expected to be around 4MMSCMDby end of the 12th plan.

Gas HydratesGas hydrates are formed when gas and

water mixtures are subjected to high pressureand low temperature conditions in the sea, usuallyin water depths of more than 800 m, withinsediments just below the sea bottom. They arealso formed in some permafrost region of the world.Gas hydrates may be an important source ofhydrocarbon energy in the future. The gashydrates also act as a cap under which naturalgas can get accumulated.

World over gas hydrate production is inresearch & development stage. India is the thirdcountry after USA and Japan, where R&D workon gas hydrates has commenced. National GasHydrate Programme (NGHP), steered by theMin is t ry o f Pet ro leum & Natura l Gas and

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technically coordinated by Directorate General ofHydrocarbons (DGH), is in place and various R&Dstudies are in progress to develop vast resourcesof gas hydrates in western and eastern offshoreand Andaman offshore areas. It is a consortium ofNational E & P companies, namely ONGC, GAIL,OIL and national research institutions NIO, NIOTand NGRI.

There are numerous potent ia l o f fshoreareas of gas hydrates accumulat ion wi th inIndia's Exclusive Economic Zone. During theperiod 1998 to 2003, data of Krishna-GodavariBasin (offshore), Cauvery Basin (offshore), Gulfof Mannar and Western offshore were studied byONGC for assessing Gas Hydrate prospectivity.These studies provided technical support informulating NGHP Expedition-01 program, wherein21 sites were drilled/ cored in Indian offshore in2006 using the ship Joides Resolution underagreement between DGH and a US consortium ofcompanies.

The NGHP Expedition-01 established thepresence of gas hydrate in KG, Mahanadi andAndaman deep waters. Gas hydrate was foundoccurring in “combination reservoirs” consistingof horizontal or sub-horizontal coarse grainedpermeable sediments (sands for the most part) andapparent vertical to sub-vertical fractures thatprovide the conduits for gas migration. NGHP-01delineated and sampled one of the richest marinegas hydrate accumulations (in the KG basin). Italso discovered one of the thickest and deepest(612 m below sea floor) gas hydrate occurrencesyet known (in offshore region of the AndamanIslands).

Based on the findings of NGHP Expedition-01, the Krishna-Godavari deepwater basin and theMahanadi deep waters have been consideredpotential areas where large tracts of turbidity sandchannel systems can be expected in the deltasequence accumulations. The aim and objectivesof the NGHP Expedition-02 are to identify gashydrate bearing sands, identify the free gas belowthe gas hydrate stability zone and identify suitablelocation for carrying out pilot production testingin NGHP Expedi t ion-03. 3D se ismic data

interpretation is in progress to identify potentialsand channel systems. Based on the geophysicalstudies carried out so far, in over 5000 sq km inKr ishna-Godavar i and Mahanadi o f fshoredeepwater areas more than 50 sites have beenidentified for NGHP Expedition-02. These locationsare being prioritized in consultation with NGHPand US scientists. Geoscienti f ic studies arecontinuing to identify more locations in the area.

Earlier studies have prognosticated gas hydrateresources of 1894 TCM for India and 933 TCF(USDOE, Feb 2012) is the concentration of gashydrate in sands within the gas hydrate stabilityzone. The estimated presence of sand isapproximated based on gross geological depositionalmodels. NGHP is carrying out resource estimation ofthe gas hydrates in offshore areas of East Coast.

NGHP has MoU wi th USGS, USMMS,JOGMEC, GFZ-Potsdam and IFM-Geomar forcollaborative research in gas hydrates. USGSscientists are in close consultation for prioritizinglocations and R & D activities of NGHP.

NGHP has taken several initiatives for R & Din exploitation of methane from gas hydrates basedon the global trends in this direction. The NGHPtechnical committee is planning to locate an idealgas hydrate bearing sand in the channel-leveesystem by dri l l ing several of the identi f iedlocations in the areas KG & Mahanadi deepwater

areas during NGHP Expedition-02.

Shale Oil/Shale GasOi l Shales are usual ly f ine-gra ined

sedimentary rocks containing relatively largeamounts of organic matter from which significantquantities of shale oil and combustible gas canbe extracted by destructive distillation. An oilshale, which has a very high proportion of organicmatter in relation to mineral matter, is categorisedas a coal. Oil shales occur in many parts of theworld ranging from small occurrences of little orno economic value to those of enormous size thatoccupy thousands of square miles and containmany billion barrels of potentially extractableshale oil.

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With the continuing decline of petroleumsupplies accompanied by increasing costs ofpetroleum, oil shale presents opportunities forsupplying some of the fossil energy needs of theworld in the years ahead. North-East India isendowed with rich deposits of coal, found in theBarail Formation of Tertiary age. Carbonaceousshale occurs interbedded with the coal. Studieshave indicated that these coals and carbonaceousshale constitute the principal source rocks thathave generated the hydrocarbons produced fromthe region.

Shale Gas can emerge as an important newsource of energy in the country. India has severalShale formations which seem to hold Shale Gas.The Shale Gas formations are spread over severalsedimentary basins such as Cambay, Gondwana,Krishna-Godavari and Cauvery onland. Based onthe preliminary studies, it is inferred that CambayShale and Olpad Formation in Cambay Basin,Kommugudem and Raghavpuram Shales in KGBasin, and Andimadam Shales and SattapadiShales in Cauvery Basin appear highly prospectivefrom shale gas point of view.

A systematic approach has been initiated byDGH since 2010 to identify, characterise andpriori t ise the Indian sedimentary basins forfocussed shale oil /gas exploitation and also toassess and establ ish the potential of f ields.Memorandum of understanding (MoU) has beensigned between Department of State, USA andMinistry of Petroleum & Natural Gas (MoPNG),Government of India (GOI) on 06.11.2010 to co-operate in areas of assessment of Shale GasResources in India, Training, assistance inregulatory frameworks and Investment Promotion.

Based on the data available from conventionaloil/gas exploration, Six sedimentary basins viz.Cambay basin, Gondwana Basin, KG Basin,Cauvery Basin, Indo-Gangetic Basin and AssamArakan Basin prospective from Shale oil & gaspoint of view were identified.

MoPNG has const i tu ted a Mul t iOrganisational Team comprising DGH, ONGC, OIL,GAIL to analyse the existing data set and suggestmethodology for Shale Oil & Gas development in

India. Technical studies have been awarded toONGC & CMPDI to identify prospective areas inseveral Basins/sub basins.

As per DGH's repor t on hydrocarbonexploration and production activities 2012-13,different agencies have reported upon the shalegas resources in India. Energy InformationAdministration (EIA), USA (June 2013) hasreported a GIP concentration of 1278 TCF, riskedgas-in-place of the order of 584 TCF with 96 TCFas recoverable in 4 Indian basins (Cambay Onland,Damodar, Krishna-Godavari Onland & CauveryOnland) with shale oil/condensate in place of178.5 billion barrel (bbl), risked value of 87 billionbbl and technically recoverable as 3.8 billion bbl.USGS (Jan’12) has estimated 6.1 TCF as technicalrecoverable in 3 Indian basins (Cambay Onland,Krishna Godavari Onland & Cauvery Onland) andhas indicated that these basins have also potentialfor shale oil.

ONGC and Central Mine Planning and DesignInstitute (CMPDI) has also estimated 187.5 TCFof shale gas in 5 basins (Cambay Onland, GangaValley, Assam & Assam Arakan, Krishna- GodavariOnland & Cauvery Onland) and 45 TCF of shalegas in 6 sub basins (Jharia¸ Bokaro, NorthKaranpura, South Karanpura, Raniganj &

Sohagpur), respectively.

Further, the Policy Guidelines for Exploration andExploitation of Shale Gas and Oil by National OilCompanies under Nomination regime was issued on14th October, 2013. Under this Policy, the right toexploration and exploitation of Shale Gas & Oil willlie with the NOCs holding Petroleum ExplorationLicense (PEL)/Petroleum Mining Lease (PML)granted under the nomination regime. The permissionfor carrying out shale gas/oil exploration by private/Joint venture companies is envisaged underproposed Uniform Licensing Policy.

ONGC has commenced drilling of one well inCambay basin in Gujarat for shale gas/shale oilexploration. Data gathered from the drilled well is underanalysis. Additionally, 55 PEL (Petroleum ExplorationLease)/PML (Petroleum Mining Lease) undernomination regime have been identified by ONGCand Oil India Limited for shale oil & gas exploration.

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DGH has completed a project to identify andestimate oil shale resources and their syncrudepotential in the Assam Arakan basin in north eastparts of India. This project was carried out inassociation with BRGM, France and MECL, India.An estimate of syncrude resources has been madeby BRGM in the 3 blocks at 400 MMT (approx.) ofoil up to depth of 500 m.

ONGC has commenced drilling of one well inCambay basin in Gujarat for shale gas/shale oilexploration. Currently, there is no commercialproduction of shale gas in the country.

HydrogenHydrogen is receiving worldwide attention

as a clean fuel and efficient energy storage mediumfor automobi les . Hydrogen can rep lace orsupplement oi l used in road transportat ion.Hydrogen production technologies can be bothfossil fuel based and renewable resource based.However, substantial research and developmentis needed to establish use of hydrogen as analternative fuel in a cost-effective manner. Fordevelopment of hydrogen as a fuel, the Ministryof Petroleum & Natural Gas has set up a HydrogenCorpus Fund with contribution from five major OilCompanies and Oil Industry Development Board(OIDB). A road map has been set up by Indian OilCorp. (R&D), the nodal agency for the hydrogenresearch project , for hydrogen product ion,dispensing, storage and application. The projecton setting up of a Hydrogen Dispensing stationat Dwarka, New Delhi by IOC (R&D) wascompleted. MoUs for the following 4 projects,approved by the Steering Committee of HCF, weresigned and all the projects are in progress: (a)Des ign and const ruct ion o f meta l -organicframework materials with tuneable physicalproperties for storage of Hydrogen - HPCL/GitamUniversity (b) An integrated approach for Bio-hydrogen production through combined dark andphoto fermentative process - HPCL/TERI (c)Hybrid-Sorption enhanced steam reforming for theproduction of Hydrogen from Natural Gas - BPCL(d) Development of large scale photo-catalyctic

process using modular reactor for Hydrogenproduction by dissociation of water/H

2S utilising

solar energy - IOC (R&D)/IT-BHU.

A new project on Development of novel nano-composite Hydrogen storage materials by GAIL/I IT -Madras (Chennai) was approved by thesteering committee of HCF in its meeting held inDecember 2011.

Bio-dieselBio-diesel is a fatty acid having properties

similar to diesel derived from crude oi l bydistillation process which can be a substitute ofHigh Speed Diesel (HSD). The properties of bio-diesel are such that it can be mixed with any dieselfuel. It is extracted from the seeds of the trees likeMahua, Karanja, Kusum, Dhupa, Undi, Simarouba,Sal, Pilu, Jojoba, Tumba, Nahor, Kokum, Rubber-seed, Cheura, Wild-Apricot, Tung, Neem, Mango,Kernel and Jatropha. Of these, jatropha curcas hasbeen found most suitable for the purpose. It canbe planted on under-stocked forest lands, fieldboundaries to provide protective hedge, fallowlands, as agro forestry on farmlands along withagricultural crops, public lands along railwaytracks, highways, canals and community andgovernment lands in villages. The R&D studiesindicated that a bio-diesel/diesel blend resultsin a fuel that is non-toxic, biodegradable and non-f lammable wi th a very high f lash point . I tenhances the life of the engine and results in lesspollution.

To encourage production of bio-diesel in thecountry, the Ministry of Petroleum and NaturalGas announced a Bio-diesel Purchase Policy, inOctober 2005, which became effective from01.01.2006. Under this scheme, Oil MarketingCompanies (OMCs) are to purchase Bio-diesel,meeting the fuel quality standard prescribed byBIS for blending with High Speed Diesel to theextent of 5% at identified purchase centres acrossthe country. The Policy has identified 20 purchaseCentres of the public sector OMCs all over thecountry. The OMCs would purchase bio-diesel

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from those bio-diesel manufacturers who registerwi th them af ter sat is fy ing the technica lspecifications, at a specified delivered price.

Ministry of New and Renewable Energy,Government of India has promulgated the NationalPolicy on Bio-fuels, in December 2009. As per thepolicy, the responsibility of storage, distribution& marketing of Bio-fuels rests with OMCs. Theminimum purchase price for bio-diesel will bedetermined by the National Biofuel SteeringCommittee and decided by National Bio-fuelCoordination Committee taking into account theentire value chain comprising production of oilseeds, extract ion of b io-oi l , i ts processingblending, d is t r ibut ion and market ing. TheMinimum Purchase Price (MPP) for bio-diesel bythe OMCs will be linked to the prevailing retail

diesel price.

OMCs have reviewed the procurement priceof bio-diesel at the various purchase centresaccordingly and presently the declared price ofBio-diesel is 42.50 per litre w.e.f. 26.10.2013.However, the Bio-diesel manufacturers have notcome forward to sell their Bio-diesel produce toOMCs at this declared price.

EthanolTo reduce dependence on imported oil by way

of encouraging use of indigenous sources ofenergy, Ministry of Petroleum & Natural Gas(MoPNG) had notified on 20.9.2006, the schemeof 5% ethanol-blended petrol (EBP), in accordancewith BIS specifications, to be sold in notified areassubject to condition. The EBP has been applicableto the entire country (except NE States, Jammu &Kashmir, Andaman & Nicobar Is lands andLakshadweep) with effect from 1.11.2006. In aseries of steps aimed to boost the EBP Programme,the Government decided on 22.11.2012 that 5%mandatory ethanol blending with Petrol shouldbe implemented across the country. The 5%mandatory blending is to be reckoned for thecountry as a whole and was to be achieved by30.06.2013. Procurement price of ethanol was tobe decided between Oil Marketing Companies

(OMCs) and suppliers of ethanol and in case ofany shortfall in domestic supply, the OMCs andChemical Companies would be free to importethanol. Accordingly, a Gazette Notification wasissued by MoPNG on 02.01.2013 directing OMCsto implement the Government decis ions of22.11.2012.

Subsequent ly, Cabinet Commit tee onEconomic Af fairs decided on 03.07.2013 thatsugarcane or sugarcane juice may not be used forproduction of ethanol and it be produced onlyfrom molasses and that OMCs will procure ethanolonly f rom domest ic sources to achieve themandatory requirement of 5% ethanol blendingwith Petrol by October 2013 in areas/parts of thecountry where sufficient quantity of ethanol isavailable. In other parts of the country, blendingof ethanol may be increased progressivelydepending upon the availability of ethanol toreach the 5% mandatory level. OMCs and SugarIndustry Associations may interact with eachother on a regular basis to achieve the target.

Pursuant to the above mentioned decisions,OMCs are implementing the Programme in thenotified 20 States and 4 UTs as per the availabilityof Ethanol by procurement through a tenderprocess.

POLICIES AND CONTRACTSOne of the landmarks in Liberalisation Policy

in pet ro leum sector is encouragement topar t ic ipat ion o f fore ign and other Ind iancompanies in explorat ion and developmentact iv i t ies . S imi lar ly, the Government isencourag ing Nat iona l Oi l Companies toaggresively pursue oil and gas opportunitiesoverseas.

Taking into account the oil security concernsof India, the Government has also decided to builda Strategic Crude Oil Reserve of 5 million tonnesat three locat ions in the count ry v iz .Visakhapatnam, Andhra Pradesh (1.0 mill iontonnes), Mangalore, Karnataka (1.5 mil l iontonnes), and (iii) Padur, Karnataka (2.5 milliontonnes) through a special purpose vehicle (SPV)

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named Indian Strategic Petroleum Reserves Ltd(ISPRL), a subsidiary company of OIDB. Thecapacity of Visakhapatnam site was subsequentlyenhanced to 1.33 mmt (milion metric tonnes). Thus,storage capacity has been enhanced to 5.33 mmtThe construct ion works are in progress ata l l these pro ject . Commiss ion ing o f theVisakhapatnam facility is expected by September2014. Commissioning of Mangalore and Padurprojects is expected by October 2015.

The need for additional crude oil storage isbeing felt in the light of increasing requirementof crude oil in the country. ISPRL was entrustedwi th the respons ib i l i ty o f preparat ion o fDetailed Feasibility Reports (DFRs) for 12.5 mmtof Strategic Storage of Crude oil in Phase-II infour States, namely, Rajasthan, Odisha, Gujaratand Karnataka. The DFRs have been prepared byEIL with capacities proposed as Chandikhol3.75 mmt, Rajkot 2.5 mmt, Bikaner 3.75 mmt andPadur 2.5 mmt.

The New Exploration Licensing Policy (NELP)for exploration & production (E & P) of oil &natural gas (excluding Coal Bed Methane), andthe Coal Bed Methane (CBM) Pol icy were

Table - 8 : Details of exploration block awarded

Round Month/year No. of Awarded Present* award of block blocks Area Area or PSC signed awarded (sq km) (sq km)

NELP- I Apr, 2000 2 4 229827 47774

NELP- I I July, 2001 2 3 267883 10400

NELP-I I I Feb, 2003 2 3 204588 88570

NELP-IV Feb, 2004 2 0 192810 68285

NELP-V Dec, 2005 2 0 115180 51254

NELP-VI Mar, 2007 5 2 306389 250484

NELP-VII Dec, 2008 4 1 112955 98147

NELP-VII I Jun, 2010 3 2 52603 52573

NELP- IX Mar, 2012 1 4 26428 26428

* Status of area as on 01.04.2013.Source:Hydrocarbon exploration and production activities India 2012-13.

formulated by the Government of India, withDirectorate General of Hydrocarbons (DGH) as thenodal agency, during 1997-98 to provide a levelplaying field to both the Public and Private sectorcompanies in exploration and production ofhydrocarbons. NELP has steered steadily towardsa healthy spirit of competition between National

Oil Companies and private companies.

The Government had initiated bids under theNew Exploration Licensing Policy in February 1999to accelerate and expand exploration of oil andgas in the country. Under NELP, acreages areoffered to the participating companies through theprocess of open international competitive bidding.The first round of offer of blocks was launched in1999 and most of the ninth round awards wereconcluded in 2012. A total of 360 explorationblocks have been offered so far and 254 blockshave been awarded for which PSC signed undervarious rounds of NELP, spanning from 1999 to2012. As on 01.04.2013, total 166 blocks areactive and 74 have already been relinquished.

The details of the exploration blocks awardedin NELP rounds are given in Table - 8.

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In order to explore and produce new sourcesof natural gas from coal-bearing areas, theGovernment had formulated a CBM Policy in 1997and implemented in 2000 providing attractive fiscaland contractual framework for exploration andproduction of CBM which is an environmentfriendly clean gas fuel similar to conventionalnatural gas.

The Government of India (GoI) has awardedtotal 33 CBM blocks, in Jharkhand (7), MadhyaPradesh (7), Chhattisgarh (3), Rajasthan (4), WestBengal (4), Andhra Pradesh (2), Odisha (2), Assam(1), Gujarat (1), Maharashtra (1) and Tamil Nadu(1) in different coalfields of India under CBM-Ito IV. Out of these, three CBM blocks have alreadybeen relinquished in Gujarat, Madhya Pradesh andMaharashtra (one in each). Exploration activitieshave established significant finds in eastern andcentral India. Commercial CBM production hasstarted since July 2007 in Raniganj (South) blockin West Bengal which cont r ibutes about0.32 MMSCMD (million metric standard cubicmeter per day) of CBM production. Additionally,two blocks, Raniganj (East) block operated byEssar Oil Limited is producing @ 0.14 MMSCMDand Jharia operated by ONGC is producing @10,000 SCMD. Some more CBM blocks are expectedto start commercial production in near future.

The energy demand is on rise with social andeconomic development in the country. Currenthydrocarbon demand is much more than thedomestic crude oil and natural gas production. Inorder to bridge the gap between energy supplyand demand, it is imperative to accelerate theexploration and production (E&P) activities in thecountry. Therefore, GoI has adopted mult i -pronged s t ra tegy for g iv ing momentum toexploration and production in the country. Themajor steps taken in this regard includes offeringof exploration blocks in Indian sedimentary basinsthrough NELP, development of alternate sourcesof hydrocarbon such as CBM and Shale Gas,Research & Development for new sources suchas Gas Hydrate, and carrying out E & P operationsin safe and environment friendly manner.

The GoI has been reviewing the policies fromtime to time for encouraging exploration activityand investments. At present, oil & gas and CBMare under two different contract regimes. Thesetwo contractual regimes for allocation of acreagesfor E&P operat ions o f hydrocarbons have

di f ferent f isca l terms and condi t ions. Thecont racts under the New Explorat ion andLicensing Policy (NELP) for oil and gas are basedon production sharing contract (PSC) whereGovernment stake depends on biddable sharingof prof i t petroleum after a l lowing for costrecovery, while the contracts under CBM Policyprovide for biddable revenue sharing based onproduction linked payment (PLP).

Considering the constraints experienced in thepresent PSC format and differences in fiscal andcontractual regime for oil & gas and CBM, it isnow proposed that the award of acreages forhydrocarbon exploration & production in futurewill be under a uniform licensing policy coveringall types of hydrocarbons, with new fiscal termsensuring ease of operation for E & P companies.

Under the revised policy, total 46 blocks(17 onland, 15 shallow water and 14 deep waterblocks) are being offered under tenth round ofNew Exploration Licensing Policy (NELP-X) in 13prospective sedimentary basins of India forexploration of oil and natural gas, covering an areaof 166,053 sq km. These 46 blocks are falling inbasin of Gujarat-Kachchh, Gujarat-Saurashtra,Mumbai, Kerala-Konkan, Cauvery, Krishna-Godavari, Mahanadi-NEC, Andaman, Bengal,Punjab plain, Rajasthan, Cambay & DeccanSynclise.

The Ministry of Petroleum & Natural Gas hasannounced a Bio-diesel Purchase Policy effectivefrom 1.1.2006. Under this scheme, Oil-marketingcompanies would purchase Bio-diesel for blendingwith High Speed Diesel to the extent of 5% at 20purchase centres identified across the country.However, no suppliers had come forward to offerBio-diesel at these designated centres at thedeclared prices. Later, Ministry of New andRenewable Energy, GoI has also promulgated theNational Policy on Bio-fuels, in December 2009.As per the said policy, the responsibil i ty ofstorage, distribution & marketing of Bio-fuelsrests with OMCs. The minimum purchase price forbio-diesel will be determined by the NationalBio-fuel Steering Committee and decided byNational Bio-fuel Coordination Committee.

Ministry of Petroleum & Natural Gas hadnotified on 20.9.2006, the scheme of 5% ethanol-blended petrol (EBP), in accordance with BISspecifications, to be sold in notified areas subject

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Table – 9 : World Proved Reserves of Crude Oil*(By Principal Countries)

(In bil l ion tonnes)

Country Reserves

World: Total 235.8Brazil 2 .2China 2 .4Canada 28 .0I ran 21 .6Iraq 20 .2Kazakhstan 3 .9Kuwait 14 .0Libya 6 .3Nigeria 5 .0Qatar 2 .5Russian Federation 11 .9Saudi Arabia 36 .5UAE 13 .0USA 4.2Venezuela 46 .5Other countries 17 .6

Source: BP Statistical Review of World Energy, 2013.* At 2012 end.

Table – 10 : World Proved Reserves of Natural Gas*(By Principal Countries)

(In trill ion cu m)

Country Reserves

World: Total 187.3Algeria 4 .5Australia 3 .8Canada 2.0China 3 .1Egypt 2 .0India 1 .3Indonesia 2 .9I ran 33 .6Iraq 3 .6Kazakhstan 1 .3Kuwait 1 .8Libya 1 .5Malaysia 1 .3Netherlands 1 .0Nigeria 5 .2Norway 2 .1Qatar 25 .1Russian Federation 32 .9Saudi Arabia 8 .2Turkmenistan 17 .5UAE 6.1USA 8.5Uzbekistan 1 .1Venezuela 5 .6Other countries 11 .3

Source: BP Statistical Review of World Energy, 2013.* At 2012 end.

to condition. In a series of steps to give boost tothe EBP Programme, the Government decided on22.11.2012 that 5% mandatory ethanol blendingwith Petrol should be implemented across thecountry.

The Government has issued “Pol icyGuidelines for Exploration and Exploitation ofShale Gas and Oil on 14th October, 2013. Underthis Policy, the right to exploration and exploitationof Shale Gas & Oil will lie with the National OilCompanies (NOCs) holding Petroleum ExplorationLicense (PEL)/Petroleum Mining Lease (PML)granted under the nomination regime.

WORLD REVIEWThe world proved reserves of crude oi l

and natural gas at the end of 2012 were estimatedat 235.8 billion tonnes and 187.3 trillion cu m,respectively (Tables - 9 and 10). The largestshare of reserves of world crude oil is available inMiddle East (46.4%) fo l lowed by South &Central America (21.6%), Europe & Eurasia(8.1.%), Africa (7.3%), North America (14.3%) andAsia Pacific (2.3%).

Of the total world reserves of natural gas,Middle East possesses the largest share (43.0%)followed by Europe & Eurasia (31.2%), Asia Pacific(8.3%), Africa (7.7%), North America (5.8%) andSouth & Central America (4.0%).

The world crude oi l production in 2012increased to 4008 million tonnes from 3985 milliontonnes in 2011. OPEC countries, namely, Algeria,Angola, Ecuador, Gabon, Indonesia, Iran, Iraq,Kazakhstan, Kuwait, Libya, Nigeria, Saudi Arabia,UAE and Venezuela had a share of about 43.6% inthe world crude oil production in 2012. SaudiArabia (14%), Russia (13%), USA (8%), China(5%), Canada, Iran, Iraq, Kuwait, Mexico, & UAE(4% each) and Brazil, Nigeria, & Venezuela (3%each) were the principal producers of crudepetroleum.

The wor ld product ion o f natura l gasalso marginally increased to 3.44 trillion cu m in2012 from 3.38 trillion cu m in 2011. OPEC countrieshad a share o f 14% in the wor ld natura lgas production in 2012. USA (20%), Russia (19%),Iran & Qatar (5% each), Canada (4%), andChina, Norway & Saudi Arabia (3% each) werethe major producers of natural gas in 2012(Tables- 11 and 12).

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Table – 11 : World Pr oduction of Crude Petroleum(By Principal Countries)

(In mil l ion tonnes)

Country 2 0 1 0 2 0 1 1 2 0 1 2

World: Total 3 9 3 1 3 9 8 5 4 0 0 8Algeria 7 5 7 4 7 3Angola 9 0 8 4 8 7Brazil 111 113 111Canada 140 149 159China

#203 204 207

I ran 207 206 175Iraq 120 137 152Kazakhstan 80 80 7 9Kuwait

@122 140 152

Libya 7 8 2 2 7 1Mexico 153 152 151Nigeria 117 117 116Norway 105 100 9 4Qatar 6 6 7 8 8 3Russia 505 509 517Saudi Arabia

@467 526 547

UAE 131 151 154U K 6 4 5 3 4 5USA 346 360 324Venezuela

e142 140 140

Other countries 609 590 571

Source: World Mineral Production, 2008-2012.@ Including shares of production from the Neutral Zone.# Including oil from shale and coal.

Table – 12 : World Pr oduction of Natural Gas(By Principal Countries)

(In '000 million cu m)

Country 2 0 1 0 2 0 1 1 2 0 1 2

World: Total 3 2 9 8 3 3 8 4 3 4 3 9Algeria 8 0 7 8 8 1Argent ina 4 7 4 5 4 4Australia 5 2 5 4 6 0Canada 151 145 141China 9 5 102 107Egypt 6 1 6 1 6 1India 5 2 4 6 4 0Indonesia 8 6 8 2 7 1I ran 146 152 160Malaysia 6 1 6 1 6 2Mexico 5 8 5 8 5 8Netherlands 8 4 7 6 7 6Norway 108 102 115Pakistan 4 2 4 2 4 4Qatar 117 145 157Russia 649 669 653Saudi Arabia 8 8 9 9 103Turkmenistan 4 2 5 9 6 4UAE 6 0 5 2 5 2U K 6 0 4 8 4 1USA # 604 648 681Uzbekistan 6 0 4 9 4 8Other countries 495 511 520

Source: World Mineral Production, 2008-2012.# Dry gas.

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The world consumption of oil in 2012 was estimatedas 4,130.5 million tonnes, while that of natural gas was2,987.1 million tonnes oil equivalent. Consumptionof oil and natural gas in India in the same period was171.6 million tonnes (with 4.15% share) and 49.1 milliontonnes oil equivalent (with 1.64% share), respectively.

FOREIGN TRADEExports

Exports of crude petroleum was negligibleduring 2012-13 which decreased sharply from21 thousand tonnes in 2011-12. Exports of natural gasincreased considerably in 2012-13 to 27,736 tonnesagainst 22,218 tonnes in 2011-12. Exports of naturalgas were mainly to Nepal (Tables- 13 and 14).

Exports of petroleum products (total- including lightdistillates, middle distillates and heavy ends) increasedby 4.23% to 63.41 million tonnes in 2012-13 ascompared to 60.84 million tonnes in the preceding year.

Table – 13 : Export of Petroleum (Crude)(By Countries)

2011-12 2012-13Country

Q ty Value Qty Value( '000 t) (L ’000) ( '000 t) (L ’000)

Al l Count r ies 2 1 722969 ++ 1 2

Japan - - ++ 1 2

Other countries 2 1 722969 - -

Table – 14 : Export of Natural Gas(By Countries)

2011-12 2012-13Country

Q ty Value Qty Value( t ) (L ’000) ( t ) (L ’000)

Al l Count r ies 22218 1384874 27736 1617704

Nepal 21572 1350389 27413 1601071

Bhutan 110 4 0 4 0 200 10300

Pakistan - - 3 0 610

Egypt 3 3 833 6 610

Unspecified 2 0 915 8 7 5 1 1 3

Other countries 483 28697 - -

ImportsImpor ts o f c rude pet ro leum increased

considerably to 192.24 million tonnes in 2012-13as compared to 165.71 million tonnes in 2011-12.Imports were mainly from Saudi Arabia (19%),Iraq (13%), Venezuela (11% ), Kuwait (10%),Nigeria & UAE (8% each) and Iran (7%). Importsof natural gas decreased marginally to 13.14 milliontonnes in 2012-13 from 13.20 million tonnes in2011-12. Main suppliers were Qatar (78%),Nigeria (9%), Egypt (4%), Algeria & YemenRepublic ( 3% each) (Tables- 15 and 16).

Impor ts o f pet ro leum products ( to ta l )at15.77 mill ion tonnes in 2012-13 decreasedby 0.51% as compared to 15.85 million tonnesin the preceding year. Besides, 9.53 mil l iontonnes Liquefied Natural Gas (LNG) was importedin 2012-13 as against 9.70 mill ion tonnes in

2011-12.

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Table – 15 : Imports of Petroleum (Crude)(By Countries)

2011-12 2012-13Country

Q ty Value Qty Value( '000 t) (L ’000) ( '000 t) (L ’000)

Al l Count r ies 165712 6436885431 192237 8148673568

Saudi Arabia 31415 1248931356 35704 1573854687

Iraq 23778 901922110 25389 1089731196

Kuwait 17918 687731836 18744 785298071

Venezuela 9 4 1 6 319877764 20729 767455790

Nigeria 15386 650115715 14964 701833440

UAE 14364 577637449 15547 681738814

I ran 14689 551088907 13228 521278461

Angola 7 9 7 6 314863396 10092 444763448

Qatar 6 1 3 6 247494684 8 1 6 7 360690430

Mexico 2 3 6 5 82573764 4 5 9 6 176355383

Other countries 22269 854648450 25077 1045673848

Table – 16 : Import of Natural Gas(By Countries)

2011-12 2012-13Country

Q ty Value Qty Value( t ) (L ’000) ( t ) (L ’000)

Al l Count r ies 13199608 328736293 13135869 411417374

Qatar 10000000 234002076 10302368 311963866

Nigeria 1356008 40468512 1159479 39042735

Egypt 522343 17125849 574076 20330486

Algeria 188814 6375849 396947 16277155

Yemen Republic 179526 3506142 396466 13466031

Spain - - 128743 3974880

Niger - - 116750 3861871

France - - 61040 2500348

Other countries 952917 27257865 ++ 2

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FUTURE OUTLOOKThe country is deficient in oil resources and most

of the domestic requirements are met through importsand this trend is likely to continue in future. Severalmeasures are being taken by the Government tointensify exploration and enhance hydrocarbonreserves. These include development of new as wellas existing fields, implementation of Enhanced OilRecovery Schemes, recourse to specialised technology,enlisting the services of international experts andencouraging participation of private and joint-venturecompanies in the exploration programme.

Some of the recommendations of the WorkingGroup on Petroleum & Natural Gas Sector for the12th Five Year Plan (2012-17) are as follows:

Exploration & Production Sectori. ONGC is to develop marginal fields located in

west coast and other gas discoveries in east coastarea during 12th Plan period. This will result inincrease in natural gas production of ONGC byabout 28 MMSCMD in 2016-17.

ii. A National Data Repository (NDR) will compriseof reliable exploration and production data forIndia, with provisions for seamless access.Online data management would be drawn upwhich would be an essential part of an OpenAcreage Licensing Policy (OALP).

iii. Crude oil production is expected to increaseby about 22% over the production in 11thFive Year Plan period. Natural gas productionis expected to increase by about 57% during12th Five Year Plan period.

iv. OALP is expected to give further momentumto oil and gas exploration activities in theIndian sedimentary basins. An estimatedarea of about 3.96 lakh sq km is to be offeredunder NELP/OALP during 12th Plan.

Acquisitions of Assets Abr oad i. During the 12th Plan period, four oil PSUs

together target to produce about 67 milliontonnes of oil equivalent of oil and gas fromoverseas projects with an anticipatedinvestment to the tune of L 114,760 crore.

Natural Gasi. With a targeted GDP growth rate of over 9%,

India’s energy demand is expected to grow at 5.2%.

ii. GoI has adopted a multi-pronged strategy toenhance availability of natural gas in thecountry through (a) intensification of domesticE&P activities through NELP, (b) Coal BedMethane Exploration & Production activities,(c) Developing underground Coal Gasificationand (d) Target Unconventional sources likeShale Gas, Gas Hydrates, etc.

iii. Price sensitivity is a major issue which is limitingLNG imports, and hence, it is imperative tolaunch progressive reforms across the gas valuechain. LNG imports into the country anddevelopment of downstream markets to ensureoff take will remain at the core of the naturalgas sector in the days to come.

Refiningi. Transformation in the Indian Refining Sector

to continue. Refinery capacity is expectedto increase from 232.3 million tpy in 2011-12 to310.9 million tpy by the end of 12th Plan.

ii. Refinery configurations to undergo furtherchange. Hydrogen production and management,sulphur removal and recovery, changinghydrocarbon species in product pool will continueto drive these changes. The emphasis on greentechnologies will add to these changes.

iii. Refinery-Petrochemicals integration is anessential driver to economic growth as well ascorporate profitability. Significant opportunityexists for refinery-petrochemical integration.

iv. Dependence on crude oil imports is likely to go upfrom around 80% in 2011-12 to 86.7% in 2016-17.

v. Exist ing port- infrastructure needs to bestrengthened to handle additional Crude andPOL imports/exports.

vi. In order to ensure energy security in case ofany emergency, strategic storage facilities areunder const ruct ion a t V isakhapatnam,Mangalore and Padur. A scheme for fillingcrude oil in the caverns has been proposed.

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