A GLIMPSE OF MARGINAL FIELDS & THEIR STATUS OF DEVELOPMENT Dr. M. K. Chakrabarti

A GLIMPSE OF MARGINAL FIELDS & THEIR STATUS OF

DEVELOPMENT

Dr. M. K. Chakrabarti

Oil & Natural Gas Corporation Ltd.

MUMBAI, May 23, 2013

Presentation overview

3

2 Status of Marginal fields

3 Status of In house Development

4 Status of Western Offshore fields

5 Conceptualized new Schemes

6Status of Eastern Offshore Marginal fields

7 Status of Onshore fields

8 Development through Service Contract

#2 E&P Company in the world

Status of next phase of Outsourcing9

10 Issues/ Concerns

Introduction1

4Most valuable Indian PSU

INTRODUCTION

Marginal Field, a field that may not produce enough net income to make it worth developing at a given time; should technical or economic conditions change, such a field may become commercial. i.e, Sub-economic at current cost

A field may be categorized as marginal under following considerations:

Reservoir size (small volume) Lack of infrastructure / technology Inaccessibility to the area- remoteness Fiscal policy Market for gas Cost of development

MARGINAL FIELD – Definition

Status of Marginal Fields


Status of Marginal FieldsTotal Marginal Fields : 165 Western Offshore : 58 Eastern Offshore : 21 Onshore : 86

Sl. No CategoryNumber of

fields

% In-place

Reserves

% UltimateReserves

1 Fields on production 62 40.09 45.15

2 FR approved/ Under implementation 23 19.51 24.96

3 FR under preparation 2 0.25 0.46

4 Under Service contracts 9 0.30 0.60

5 Under monetization/ Linked to projects 8 0.78 1.40

6 Identified for outsourcing 26 5.93 4.36

7 Under exploration / delineation 21 17.51 4.10

8 Hub Development 13 15.62 18.94

9 Surrendered 1

Total 165 100.00 100.00

7#2 E&P Company in the world

Category wise distribution of In-place Volume (%)

40.09

19.510.25

0.30

0.78

5.93

17.51

15.62

Fields on production

FR approved/ Under implemen-tation

FR under preparation

Under Service contracts

Under monetization/ Linked to projects

Identified for outsourcing

Under exploration/ delineation

Hub Development


Category wise Distribution of Ultimate Volume (%)

45.15

24.96

0.46

0.60

1.40

4.36

4.10

18.94Fields on production

FR approved/ Under implementa-tion






Hub Development

DEVELOPMENT STRATEGIES


In house development

Clustering

Utilization of nearby in house facility

Sharing infrastructure of JV

Converting old rigs to MOPU

CAPEX & OPEX Optimization

Hiring of FPSO

Batch drilling

Concurrent exploration Development through Service Contract

Status of In-house Development


Status of Offshore Marginal Fields

Western Offshore

Total fields : 58Scheme made : 37On production : 15

84.01 % of in-place is accounted for monetisation

Eastern Offshore

Total fields : 21Scheme made : 2On production : 3

10.84 % of in-place is accounted for monetisation

12

Categorization of Offshore Marginal Fields

ONGC a Wealth Creator

Mon

etized

Under

mon

etizat

ion

Iden

tified

for S

ervice

con

tract

Under

Hub

dev

elop

men

t

Under

del

inea

tion

PEL su

rren

dere

d0

5

10

15

20

25

15

22

13

0

7

13

1 0

13

4

0

18

23

13 1311

1WesternEasternTotal


Fields/Clusters Under Monetisation

Field/Cluster No ofFields HC type

Peak Oil+Cond Peak gas ∑Oil+Cond ∑Gas Life

(bopd) (MMm3/d) (MMt) (BCM) (Years)

Vasai East 1 Oil 11890 1.93 4.66 6.22 15

SB-11 1 Oil 3000 0,07 0.47 0.17 5

B-134 1 Oil + Gas 1600 0.25 0.31 0.24 8

C-Series Phase I 3 Gas 4516 3.19 1.89 10.40 15

G-1 & GS-15 2 Oil 9300 2.62 0.98 5.92 15

B-22 cluster 4 Oil + Gas 14900 4.52 3.59 6.50 10

North Tapti 1 Gas - 1.98 - 4.12 10

D-1 Additional Dev. 1 Oil 27252 1.37 13.96 0.54 20

B-46 cluster 4 Gas 2887 1.63 1.30 5.27 13

Cluster 7 2 Oil + Gas 24024 1.61 9.73 4.52 16

WO cluster 4 Oil + Gas 18178 2.36 2.83 8.58 12

BHE 1 Oil 2500 0.10 0.45 8

B-193 Cluster 8 Oil + Gas 30000 1.52 6.32 5.12 15

B-127Cluster 3 Oil + Gas 11700 0.954 1.835 2.049 10

SB-14 Prospect Oil + Gas 1205 0.95 0.14 1.64 12

C-Series Phase III 3 Gas 837 0.95 0.27 2.06 8

Total Fields 39 48.74 63.35

14A FORTUNE Global 500 Company

Strategy for Remaining Fields (Western Offshore)

Status No. of fields Fields

Development through Service Contract

13 SD-4, SD-14, B-51, B-174,

D-12, D-31, D-18, D-33, CD, CA, B-37, B-80, KD

Will be integrated with adjacent cluster

3 B-45, SD-1, B-147

Under delineation 3 C-37, NMT, B-9

Small Volume/isolated 1 B-15

Total fields: 20

15# 21 Energy Company in the World

Conceptualised new schemes

C-24 additional development

Dahanu Development

Development of GK-28 & 42 new discoveries


Strategy for Eastern Offshore Fields Development• ERD wells are planned for monetization of some ultra shallow water MF

• Being evaluated for cluster development of remaining MF and ND of shallow Water

Projects under implementation G-1 & GS-15: GS-15 put on production

G-1 wells are under completion

Projects under appraisalVasishtha & S-1 : Appraisal completed in Vasishtha

: Appraisal wells under drilling in S-1 KG-DWN-98/2 : 7 structures of DWN-98/2, along with GS-29-5 and G-4 are being planned for hub development.

Under Appraisal presently MANIK : GS-29-1 area & G-4-6

Status of Onshore Fields

18

Basin-wise status of Onshore Fields

Category A&AAWestern On land

KG Cauvery Total

Under Production 17 12 10 5 44

Under monetisation 3 - 2 3 8

Under Service Contract - 3 6 - 9

Identified for outsourcing - 7 6 - 13

Feasibility study in progress 1 1 - - 2

Under delineation 7 - 2 1 10

Total 28 23 26 9 86

A FORTUNE Global 500 Company

Total fields: 86


Status of Onshore Marginal Fields

Western Onland

Total fields : 23On production : 12

94.03 % of in-place Is accounted for monetization

Eastern Onland

Total fields : 63On production : 32

90.38 % of in-place isaccounted for monetization

Total fields : 86


Category-wise distribution of In-place Volume (%)

84.29

1.64

1.94 5.02

1.03 6.08 Fields on production






21

Fields being developed In-house (9 nos)

Field BasinStrategy

Sonamura A&AAGas supply @ 0.50 MMSCMD likely to start July 13 to Monarchak Power Plant of NEEPCO

Gojalia A&AA Gas supply @ 0.35 MMSCMD. Creation of GCS and Pipe line.

Tichna A&AA Gas supply @ 0.48 MMSCMD by 2017-18

Neyveli Cauveri Under e tendering for gas marketing

Vadatheru Cauveri Low potential. Gas marketing

Attikadai Cauveri Gas allocation order placed. Gas supply will start soon

Turputallu KG Onland Gas marketing

Achanta KG Onland Gas marketing

Chinnewala Tibba Rajasthan FR under approval

ONGC a Wealth Creator

Fields Under Delineation (10 nos)


Field Area Status

BARSILLA A&AA Geological model reviewed.

BIHUBAR A&AA Geological model reviewed.

LAXMIJAN A&AA Geological model reviewed. Alternate well planned

CHARAIDEO A&AAGeological model reviewed. Alternate well planned PEL Expired on 31.12.11.

HILARA A&AA Low volume.

TYNYPHE A&AA Nagaland area

TIPHUK A&AA Geological model reviewed. Alternate well planned

GOKARNAPURAM KG Under delineation to establish upside potential

NARSAPUR KG Delineation drilling

KARAIKAL Cauveri One alternate location is planned

22

Development throughService Contract

An approach paper was put up at 84th Board meeting, in Nov 2001

2nd strategy meet at Sariska in February 2002 deliberated marginal fields development

3rd strategic meet in July 2002 – following strategic options were discussed In-house development Alliance with profit sharing with other E&P

companies Through service contract

230th meeting held on 17th September 2002, EC decided that the fields be offered to the private companies in phases

In the Project and Planning committee meeting held on 22nd October 2002 at New Delhi, it was decided to first offer 19 onshore marginal fields24

Background


Status of Development through Service Contract

Phase Area Fields Offered

Fields awarde

d

Year Status

I

Onshore 18 6 2004 5 terminated

1 monetized

Onshore 2, Nomination

2 2006 2 terminated

I Offshore 19 3 2006 3 terminated

II Onshore 18 14 2007 4 terminated

9 under extended assessment period

1 monetized

3 rounds of bidding took place (Offshore 1, Onshore 2) Awarded 25 fields

14 are terminated 11 are under Service contract at present

Two fields are on production


Being Developed through Service Contract

Basin/ Asset

No. of

Fields

Field Name Issues

Western Onshore

1 Hirapur, M/s Prize Petroleum Current production : 15 m3 / day ( Anticipated potential :125 m3/day from additional development wells Ceiling on oil price : 26 USD/ barrel M/s PPCL requested for removing the price ceiling for accelerating development for optimum production

3 Ghotaru, Bankia, Kharatar

M/s Deep Industries Ltd Assessment period extended up to 09.07.12 Work over completed in 6 wells (GT#1,#2,#4,#7,#9 & kt-4) Potential : 25,000-30,000 m3/d

KG Onshore

5 Magatapalli, Mulkipalli,SirikattapalliMedapadu,, Chintalapalli,

M/s KEI-RSOS Petroleum Energy Ltd. Assessment period extended up tol 27.09.13 Work Over Job completed in first three fields Potential : 80,000 m3/d Anticipated potential with additional wells : 2,00,000 m3/d

1 Bantumilli M/s HRD (BGS,GTV) Assessment period extended up to 29.12.12 Wells under drilling

1 Manepalli M/s BG Shirke Assessment period extended up to 17.09.13 Done 2D inplace of IPDS & to drill 2 wells Potential will be assessed based on drilling results


Issues for Development through Service Contract

Cap on Crude Price ($ 18-35)

Gas Utilization & Marketing (Power Generation or CNG)

Gas Pricing

PML Grant

Essentiality Certificate

Extension of Assessment Period

Status of Next Phase of Outsourcing

29

Background

# 21 Energy Company in the World29

In the first QPR of ONGC held on 09.08.2007 with DGH for development of Marginal fields, DGH was asked to suggest a mechanism to ONGC for outsourcing of marginal fields through bidding process in a more lucrative way.

In the 6th Business Strategy meet of ONGC held at Agra on 25-26 August 2007 the Ministry desired that marginal fields to be identified by both ONGC and DGH and based on comprehensive analyses a suitable business model could be developed for optimum usage.

DGH visited Mumbai from 5-7th September 2008 and data of 18 fields were examined

DGH presented the brief strategy for development of Marginal Fields to Additional Secretary, MoP&NG on 20th September 2007 wherein it was decided that a draft Marginal Field Policy (MFP) covering all aspects of Marginal Fields of NOCs be proposed.

During 3-5th October DGH team again visited Mumbai and data of another 81 fields were examined jointly.

30

Background (Contd.)


DGH / ONGC made presentations on 18.10.2007 and 11.12.2007 in meetings chaired by Additional Secretary, MoP&NG and it was desired that MFP may be evolved with the following salient features Production Sharing contract Freedom to market/ utilize gas International Crude Price Gas Price at arm’s length Royalty- To be borne by contractor or ONGC Cess – Whether to be exempted Exemption of Customs Duty- modalities and relative merit

On the basis of deliberations in the meeting held on 21st February, 2008 a draft Marginal Field Policy was prepared by the committee

The MFP was deliberated in the meeting held on 08.05.2008, chaired by Additional Secretary, MoP&NG. It was decided that:

Adopt single rate of production sharing With effect from 01.05.2008 if production does not commence within 5

years for onshore blocks and 7 years for offshore blocks, they would be considered for offer under MFP

No recovery of past cost incurred by NOCs.

31

Background (Contd.)


In the meeting dated 22.01.2009 chaired by Joint Secretary, MoP&NG, a committee was formed to prepare a model contract by 15.02.2009 after which new policy would be put up for approval.

Draft Model Contract was prepared and submitted to MoP&NG

Initially 22 Marginal Fields were identified with the option of offering other marginal fields as and when they are available. Subsequently it was decided to develop two fields in-house, while another six fields are included making the number 26 fields

In response to a letter of ONGCs, Ministry informed on 10th October 2010 that the proposal for development of marginal fields through service contract with a more realistic cap on crude prices and also the proposal to increase the cap on crude prices for existing contracts need to be examined by the Board of ONGC in the context of the existing guidelines/framework

Board has approved outsourcing of marginal fields with improvements/ changes of the existing service contracts in the 224th meeting held on 4th November 2011

Basin/ Asset

No. of Fields

Field Name

KG Onshore 6 Lankapalem, Palakollu, Bhimanapalli,

Mummidivaram, Kaza & Pendurru

Western Onshore 7 Elao, Bhakri-Tibba, Khambel,

West Bechraji, South Patan,

Kamboi & Sadewala

Western Offshore 13 KD, B-51, B-174, D-12, D-31, SD-4,

SD-14, CA, CD, B-80, B-37, D-18, D-33

Total 26

Next Phase of Outsourcing: 26 Fields


Basin/ Asset

Area(Km2)

Name of PEL

Date of expiry

Marginal Fields lying in PEL area

Remarks

KG Basin

2774

KG-1B 12.01.2013 BHIMANAPALLI Limited-period PML grantedKG-1B 12.01.2013 PALAKOLLU

KG-1B 12.01.2013 LANKAPALEM

KG-1B 12.01.2013 MUMMIDIVARAM

2158KG-1A 27.12.2012 PENDURU

KG-1A 27.12.2012 KAZA

Western Offshore

13455 BOFF-123 13.11.2012 SD-4, SD-14, CA, CD, B-174

Limited-period PML granted

Western Onshore 2.357 Khambel 26.12.2007 Kamboi

Applied for ML

PEL Status (12 fields)

ONGC a Wealth Creator33

Basin/ Asset

Name of PML Area Date of expiry

Marginal Fields lying in PML/PEL

area

Remarkskm2

Mehsana

Bechraji Extn-I 3.06 28-3-2024 West Bechraji

Chandrora 1.39 15-2-2024 Khambel

South Patan 6.99 15-6-2017 South Patan

Ankleshwar Elav10.37 29.03.2010 Elao

Applied for

extension

Western Onshore

Ghotaru Ext-1 564.6 09.01.2021 Sadewala

Bakriwala 1.00 09.01.2021 Bhakri Tibba

North of Heera 82 03.12.2025 B-37

D-33 133 08.06.2019 D-33

D-18 194 01.01.2025 D-18

West Bassein 901.1 31.03.2026 B-80

Western Offshore

KD 46 31.03.2026 KD

S & E of Bassein 1447.3 31.03.2026 B-51

Mumbai High SW1064.2

31.03.2026 D-12

31.03.2026 D-31

ML Status (14 fields)

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Issues for marginal fields development


Fiscal Incentive for marginal field development

PML Grant for remaining marginal fields

Environment Clearance for Disangmukh and Tichna Field of Assam and Tripura respectively

Freedom to market gas of isolated fields

Approval of DoC for KG deep-water discoveries

Approval of DoC for Mahanadi deep-water discoveries

35

Thank You

Documents

A GLIMPSE OF MARGINAL FIELDS & THEIR STATUS OF DEVELOPMENT Dr. M. K. Chakrabarti