India Event –Showcasing E&P Opportunities

November 15, 2017

A Preview into India Policy & E&P Opportunities -

Open Acreage Licensing Blocks, Bidding Process

and DSF

Ranajit Banerjee

Head (HELP), Directorate General of Hydrocarbon

DGH

Contents

India’s Energy Outlook 1

Investments in mature fields 6

Discovered Small Field Bid Round 4

Anticipated Investments in the sector 7

Open Acreage Licensing Programme 5

India’s Hydrocarbon Potential 2

HELP 3

NDR, EOI and Bidding Portal Manual 8

0

2000

2016 2035

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TOE

Renewables (including biofuels)Hydro

India Outlook

Historic Oil and Gas Demand Supply Balance Future Energy Demand Outlook

India imports ~80% of its oil and ~50% of its gas requirement

By 2035, India is likely to be among the fastest growing oil markets, with demand almost doubling to ~10

million barrels per day and gas demand is expected to more than triple over the same period

Hon’ble Prime Minister has set a goal of 10% reduction in oil & gas imports by 2022

Source: BP Statistical Review 2017, BP Energy Outlook, Country and Regional Insights -

India

724 1603 +121% Total

0

100

200

300

40019

70

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

2015

MM

TOE

Total Consumption (O+OEG)

Rising Import dependence for meeting oil and gas demand – huge opportunity

India’s Hydrocarbon Potential

Category II:

Identified

Prospectivity

Category I: Proven

Commercial

Productivity

Category III:

Prospective

Basins

Category

IV:

Potentially

Prospectiv

e

Deepwater

Areas

Pre-Cambrian

Basement-

Tectonised

Sediments Source: DGH, study is under finalization, HC estimates indicated are subject to approval

3.14 Million Sq. Km. of area spread across 26 sedimentary

basin

Latest Study indicates hydrocarbon prognosticated

resources of 41,872 MMTOE for 26 sedimentary basins

and Offshore areas

Discovered HC resources: 12,076 MMTOE

Undiscovered HC resources estimate: 29,796 MMTOE

About 49.1 % Increase in HC Resources estimates as

compared to the earlier study undertaken in

1995-96

HELP – A growth catalyst for E&P sector

New revenue sharing contract,

reduced regulatory burden and

other fiscal incentives under HELP

Improved Market Access - Full

Marketing and Pricing Freedom

under HELP / DSF

Plans for Indian Gas Trading Hub

Policy for reducing

regulatory burden &

contractual inflexibility in

PSC regime

Operationalization of National

Data Repository (NDR) – ‘One

Stop Shop’ for Indian E&P Data

Discovered Small Field

Bid Rounds – Round I

concluded with 30

contracts awarded

Open Acreage Licensing (OAL)

Programme - opened up 90% of

sedimentary basinal area (2.8

Million Sq. Km.) to global investors

Aims to Create

Investor Friendly

Ecosystem

In order to meet PM Modi’s vision of reducing India’s oil dependence by 10% by 2022, GoI has

introduced a slew of policy reforms across O&G value chain

Opportunity under Discovered Small Fields Rounds

DSF-I bid round has been a huge success with total 30 contract areas awarded

Proposed Fields

Offered

60 Fields

Initial in-

place

volumes

Over 195

MMTOE

23 Onland

37 Offshore

Adjoining Facilities of

ONGC and OIL

Bidders can access well head

equipment, surface and

nearby facilities on chargeable

basis

These fields may be clubbed

for the selection of contract

areas to be offered

The exact fields and related data shall be provided in Round II Bid Document expected to

be notified by Q4’ 2017 and is subject to approval)

Assam:

08 (7.1

MMT)

Mumbai Offshore: 22

(97.6 MMT)

Kutch Offshore:

01 (0.1 MMT) Cambay Onland:

05 (10.1 MMT)

KG Onland:

08 (1.1 MMT)

KG Offshore:

07 (55.3 MMT)

Rajasthan:

02 (1.9 MMT)

Cambay Offshore:

01 (5.0 MMT)

Offshore: 37

Onshore: 23

NEC

Offshore: 06

(16.5 MMT)

DSF- II Round

Areas Offered under OAL

Bidders can carve out their own blocks (min 10’ by

10’ Grid, ~336 Sq. Km)

2.84 million sq. km. Area is offered across 26

Sedimentary Basin under OALP

Petroleum Operations Contract (All

zones)

Reconnaissance Contract (only in

Zone II & III)

Zone I: Sufficient data for 0.7 million sq. km.

Zone II & III: Moderate to Sparse Data for 2.14

million sq. km.

* Area offered includes 7 producing areas

Two types of Investment Opportunities available under OAL

Note – Min. 1’X1’ Grid allowed for adjoining areas to existing

blocks and areas where it is not possible to carve 10’X10’ Grid

• 1.75 million LKM of 2D seismic data

• 0.64 million SKM of 3D seismic data

• 13,650 well log data

Data available on NDR

Open Acreage Licensing

Investor studies G&G data

available on NDR

Carve out blocks for

Reconnaissance or Petroleum

Operations

Submission of EOI by

Originator round the year

Award of the Contract Bid Submission and

Evaluation

Finalization of Block & Issue of

Notice Inviting Offer

1 2 3

6 5 4

• Exploration activities including seismic surveys and drilling of wells

• Contract Period: (2+1) years

• Right to lease data for period of 12 years

• Reconnaissance Contracts are exclusive but contractor can allow other parties to conduct

survey on its discretion

• Blocks carved out on the basis of various EOIs received

• Exploration Period of 8 & 10 years for onland/shallow water and deepwater/ frontier

blocks respectively

• Development Period of (20+5+5) years

• Marketing and Pricing Freedom

• Defined timelines for exploration, appraisal and development

Reconnaissance

Contract

Petroleum Operations

Contract

Key OAL Timelines for Investors

1st Jan 31st Mar 15th May 7th Jun

Timeline (Closing Dates)

31st Dec 15th Nov

Last Date of EOI

Submission

1st July 30th Sep 15th

Nov

7th Dec 30th June 15th May

Window 1

Window 2

Finalization and

Review of EOI

Bid

Submission

Deadline

Bid Evaluation and

Award (on or before)

Contract

Signing (on or

before)

Key

Milestones

1

2

3

4

5

6

DGH to Evaluate EOIs and Issue Bid within 1.5

months

Timing is critical to avail originators incentive – Investors have two

windows for submission of EOIs

Carved out contract areas available

for bidding to all parties (2 months)

Contract

signing and

post-award

facilitation by

DGH

First EOI cycle to be closed by

November 15, 2017

As of now, around 51 blocks likely

to be offered for competitive

bidding by 31 December 2017

To submit EOIs, investors can

access– Link:

http://dghindia.gov.in/oalp

Issue of Bid

Document

Upcoming Investment Opportunities under OAL EOIs received so far under 1st Cycle

EOI Received for Onland Basin: 45 • Rajasthan: 09 • Krishna Godavari: 03 • Cambay: 12 • Cauvery: 01 • Assam-Arakan: 19 • Kutch: 01 • Ganga: 01 • Himalayan Foreland: 01

EOI Received for Shallow Water Basin: 07 • Kutch: 01 • Saurashtra: 02 • Cauvery: 01 • Mumbai Offshore: 02 • Krishna Godavari: 01

EOI Received for Deepwater Basin: 01 • Krishna Godavari: 01

Note: For the EOIs received, the bids shall be invited starting January and the bid closing date

shall be March 31, 2018 thereby providing adequate time to participate

55 EOIs submitted for Area of ~64000 Sq. Kms.

78%

20%

2%

OnlandShallow Water

Bid Parameters

50% 45% 5%

For Reconnaissance Contract, 70 marks is for biddable work program (2D, 3D,

exploratory wells), 25 marks for Data Price and 5 marks for Originator Incentive

Bidders to quote government share at

both Low Revenue Point (LRP) and

High Revenue Point (HRP) –

percentage share to be linearly

interpolated between the two points

Biddable Work Program

Bidders to quote for 2D seismic, 3D

seismic, Exploratory wells, core

analysis.

Originator Incentive

Originators to be assigned

incentive marks on a First

Come First Served Basis

Petroleum Operations Contract

Revenue Share

Stabilisation period of two, three and five years is provisioned for onland, shallow water and deepwater blocks

respectively wherein Revenue share will be fixed at LRP regardless of Daily Revenue

Upcoming Investment Opportunities other than OAL and DSF

Some of the declining fields require infusion of

technology, capital and best-in class management

practices to unlock significant discovered HC potential

Government working on a policy for Nominations fields

The purpose is to maximize production by encouraging

private and foreign investments and best-in class

technologies

Currently, an area of 61,851 Sq. Kms. is under

nomination regime

Current annual production (from Nomination fields) 25.6

MMT of oil and 24 BCM of gas (@ 69% of total

Indigenous crude oil and 75% of total domestic gas

production)

Induction of

Technology for

mature fields

Investment anticipated in E&P Sector

A cumulative investments of ~USD 40 billion is expected in Indian E&P Sector in near term (4-5 years). Considering a

D/E ratio of 70:30, the total debt and equity requirement would be of the order of USD 28 billion and USD 12 billion

respectively

PSC

Regime

DSF-II OALP

DSF - I

Total Investment requirement of USD

25.2 billion under PSC regime

Of this, FDPs worth USD 13.6 billion

are already approved and investment

worth USD 11.6 billion have

declaration of commerciality

Estimated Investment of USD 100

Million for development of 30 contract

areas awarded under Round 1 of DSF

Estimated Investment of USD 300

million for development of 61 fields

under Round 2 of DSF

Under OALP, USD 5-6 billion in

exploration activities and another USD

20-30 billion for development activities

is expected in the near term.

Accessing Geoscientific Data from NDR

Register at NDR site https://www.ndrdgh.gov.in 1

Login with your NDR credentials and the Landing Page will be as given below: 2

Exploring NDR Database 3

EoI Submission Portal

Register at HELP EoI

Submission Portal

www.dghindia.gov.in/help

1 An automated email on your

registered email will be provided

with your login credentials

2 After Login, applicant will land up on

the below page and can submit

Expression of Interest (EOI)

3

List of EoIs submitted by applicant

List of EoIs submitted by other applicants other applicant

Search Box

E-Bidding Portal for RC and POC

Registration and Login

Credentials Generation

Areas on Offer for

Bidding

Bids submitted for various

offered areas

Home Page (E-Bidding Portal)

Requirement for bidding through E-Bidding Portal

Class 3 Digital Signature – Bids are signed and encrypted using Class 3 Digital Signature. 1

Requisite Documents as per NIO – Pre-qualification, Technical Details and other Documents

(including Operatorship Experience, Acreage Holding and average annual production, Net Worth

Certificate, Incorporation Certificate, Audited Financial Statements and Other Relevant Documents)

need to be submitted online and in hard copy.

2

Bid Components – Bid components (CWP & revenue share) to be furnished online. 3

Tender Fee – Tender Fee shall be paid through online payment gateway. 4

Bank Guarantee – Scanned copy of Bank Guarantee of requisite amount needs to be submitted

online and in hard copy. 5

Flow Chart for submitting bid on E-Portal

Register and Login as

Individual Company and form

Consortium

Show Interest in Blocks of

Specific Tender with

prioritization matrix

Online PQC Check

(Initial check for Technical &

Financial criteria based on

mandatory requirement)

Bid Submission Financial/Net Worth Check as per the committed

work programme of the bidders

1 2 3

4 5

Bid Evaluation

Technical Pre-Qualification 6

Financial Evaluation

CWP and Fiscal Package

Award of Contract

7 Block Allocation as per the

available Net Worth and

submitted priority matrix

Thank You

DGH India

@DGHIndia

DGH India

Directorate General of Hydrocarbons

(Under Ministry of Petroleum & Natural Gas)

Phone: +91-120-2472000, Fax: +91-120-2472049

Email: dg@dghindia.gov.in

Website: dghindia.gov.in

Thank You