INDIA 2015

ww

w.t

heoi

land

gasy

ear.c

om

9781783021024

ISBN 978-1-78302-102-4

Set the frameworkDharmendra PRADHANMinister of State for Petroleum and Natural Gas

Clear way forwardN.K. VERMAManaging DirectorONGC VIDESH

Refineries redefinedB. ASHOKChairman and Managing DirectorINDIAN OIL CORPORATION

ARTICLES | INTERVIEWS | VIEWPOINTS | MARKET ANALYSIS | RESOURCES | PROJECTS | MAPS | INVESTOR SPOTLIGHTS

THE OIL & GAS YEAR The Who’s Who of the Global Energy Industry

10 THE YEAR IN REVIEW

11 INTERVIEW: Dharmendra Pradhan, Minister of State for Petroleum and Natural Gas

14 THE YEAR’S AWARDS15 INDIA AT A GLANCE16 THE INVESTORS INDEX17 RESOURCE: Public sector undertakings18 THE YEAR IN ENERGY

20 DIPLOMACY & POLITICS

21 ARTICLE: Foreign engagement. Securing India’s energy supply through international partnerships

21 IN IMPORTS: Cost of India's oil and petroleum product imports and dependency, 2013-2015

22 IN SUPPLY: India’s crude oil imports by source, 2013/14 23 MAP: Indian public companies’ overseas upstream investments24 INTERVIEW: Narendra Taneja, Bharatiya Janata Party 25 TIMELINE: India’s international energy co-operation26 ARTICLE: Energetic relationships. India strives to meet rapid increases in

domestic energy demand with North American imports26 IN IMPORTS: India’s gas import options, 201427 VIEWPOINT: Modi’s time to act on energy is nigh. Charles Ebinger,

Brookings Institution28 MAP: India’s regional energy co-operation 29 VIEWPOINT: Monitor, analyse and implement. Hirak Dutta, The Oil

Industry Safety Directorate

30 EXPLORATION & PRODUCTION

31 ARTICLE: India’s hydrocarbons reformation. The government attempts to bring the country’s upstream sector back to life

31 IN EXPLORATION: Type of exploration conducted in India by state-ownedcompanies, private companies and joint ventures, 2012 -2017

32 IN EXPLORATION: Status of Oil and Natural Gas Corporation exploration activities, December 2014

FOLDOUT RESOURCE: Oil and gas industry legal and fiscal background34 PROJECT HIGHLIGHT: Mangala enhanced oil recovery project34 RESOURCE: Alkaline-surfactant-polymer injection35 INTERVIEW: N.K. Verma, ONGC Videsh36 COMPANY PROFILE: Oil and Natural Gas Corporation37 PULLOUT MAP: Pre-NELP and NELP exploration blocks38 ILLUSTRATION: Mumbai High field development39 MAP: Sedimentary basins40 INTERVIEW: Ashu Sagar, Association of Oil & Gas Operators41 GEOLOGY REPORT: Ancient foundations41 MAP: Geological regions of India42 INTERVIEW: Sashi Mukundan, BP Group of Companies in India 43 COMPANY PROFILE: Oil India44 COMPANY PROFILE: Jay Madhok Group44 IN BIDDING: Results of India's New Exploration Licensing Policy bidding

rounds (2005-2012)

45 PROJECT HIGHLIGHT: Kharsang oilfield development46 INTERVIEW: M.K. Surana, Prize Petroleum47 COMPANY PROFILE: ONGC Videsh

48 THE GAS YEAR

49 ARTICLE: In short supply. India is playing catch up to supply its power plants with sufficient gas feedstock

49 IN CONSUMPTION: India is preparing for more gas imports to meet rising domestic demand

51 INTERVIEW: Shaleen Sharma, BG India52 COMPANY PROFILE: Shell Companies in India53 INTERVIEW: A.K. Balyan, Petronet LNG54 COMPANY PROFILE: Petronet LNG55 COMPANY PROFILE: GAIL55 MAP: Haldia-Jagdishpur natural gas pipeline56 INTERVIEW: H.R. Wate, Hindustan Petroleum Corporation57 COMPANY PROFILE: Andhra Pradesh Gas Distribution Corporation57 MAP: Andhra Pradesh state pipeline and CNG network58 VIEWPOINT: Let them use gas. Ajay Arora, EY59 COMPANY PROFILE: H-Energy 60 VIEWPOINT: Infrastructure power. Deepak Mahurkar, PwC61 ARTICLE: Shale awaits. Recent policy advances suggest India is banking on

its shale reserves to satisfy growing demand for natural gas61 MAP: India’s shale gas basins62 MAP: Coal bed methane bidding rounds63 COMPANY PROFILE: Essar Oil64 INTERVIEW: Prashant Modi, Great Eastern Energy Corporation64 IN TIME: Comparison of production trends in coal bed methane and

conventional gas wells65 MAP: Global coal gasification projects

FOLDOUT MAP: India’s gas pipelines and LNG terminals

66 BANKING, FINANCE & LEGAL

67 ARTICLE: Stop and go. The slump in oil prices is providing breathing room 67 IN SUBSIDIES: Indian government’s food and fuel subsidy bill68 INTERVIEW: Supratim Sarkar, SBI Capital Markets69 INTERVIEW: Rahul P. Dave, Dua Associates69 IN PARLIAMENT: Composition of Indian Parliament’s lower house by

party, 1996-2014 70 VIEWPOINT: Time to fix. Ajay Ray, GeoEnpro Petroleum71 COMPANY PROFILE: Wayne Burt Capital

72 THE YEAR’S FOCUS: Make in India

73 ARTICLE: The revival of Indian manufacturing. Prime Minister Narendra Modi’s drive to revitalise the country’s manufacturing sector will benefit the oil and gas industry

74 INTERVIEW: Deepak Bagla, Invest India74 IN THE BANK: Foreign direct investment into India, 2010/11-2014/15 75 INTERVIEW: Sanjay C. Kirloskar, Kirloskar Brothers76 INTERVIEW: Shyam Warialani, Baumer Technologies India

CON

TEN

TSIN

DIA

201

5

7

INDIA 2015

The Who’s Who of the Global Energy Industry THE OIL & GAS YEAR | INDIA 2015

In partnership with:

Content partner:

Logistics partner:

20Diplomacy and PoliticsSince his 2014 victory, a series of reforms topromote oil and gas industry growth havebeen enacted by newly elected Prime MinisterNarendra Modi. These reforms addressed In-dia’s antiquated oil subsidy programme andthe nation’s gas deregulation and were imple-mented following the global oil price drop.The new administration has also promoted in-ternational hydrocarbons asset development.

30Exploration and Production Following 10 years of steady decline, India hastaken proactive steps to revitalise its explo-ration and production sector, increasing theprice of domestically produced gas. The Min-istry of Petroleum and Natural Gas created con-tracting mechanisms in order to lure oil andgasfield operators to its extensive hydrocar-bons reserves. India has also cut much of thered tape involved in its oil and gas contractingprocess, allowing stalled projects to proceed.

The Who’s Who of the Global Energy Industry

THE OIL & GAS YEAR

www.theoilandgasyear.com

77 INVESTOR SPOTLIGHTS: Jee Pumps, Fluid Tech Systems, Oswal Industries78 COMPANY PROFILE: Tema India79 MAP: Mundra Special Economic Zone

FOLDOUT MAP: Dahej Special Economic Zone80 INTERVIEW: Nayan B. Pandya, Cryogas Industries81 INVESTOR SPOTLIGHTS: ABJ Engineering, Filter Concept, BGR Energy

Systems 82 MAP: Mangalore Special Economic Zone83 INVESTOR SPOTLIGHTS: Technocraft Industries India, Welspun

Corporation, Eaton Corporation, Bharat Heavy Electricals

84 OILFIELD SERVICES

85 ARTICLE: Explore and enhance. The renewed attention India’s sedimentary basins are receiving will be a boon for the oilfield services sector

85 IN SERVICES: Distribution of ONGC’s hired services86 INTERVIEW: Raghav Jindal, Jindal Drilling & Industries87 IN DISCUSSION: Ashwin Raikar, Nauvata Engineering, Ravi Sheth,

Greatship (India)88 COMPANY PROFILE: Dynamic Drilling and Services89 COMMENT: Indian companies must now stand on their own two feet. Local

suppliers say goodbye to their 10-percent price preference 90 INTERVIEW: Rajeev Grover, HLS Asia91 ARTICLE: Up in the air. The advantages of airborne geophysical surveying.

Feroze Neterwala, Neterwala Group91 IN AREA: Area awarded in New Exploration Licensing Policy rounds92 VIEWPOINT: India’s deepwater boom: prices, timing and technology.

Ashish Bhandari, GE Oil & Gas92 IN OPERATION: Projected number of subsea installations in Asia by

operator, 2014-201893 INVESTOR SPOTLIGHTS: Bilfinger Water Technologies, Yennai

Hydrocarbon Services, The Greatship Group, Gol Offshore95 INTERVIEW: C.M. Venkateswaran, Aker Powergas Subsea95 IN THE WATER: Expected number of subsea installations in Asia

96 ENGINEERING & CONSTRUCTION

97 ARTICLE: Homecoming match. After years of honing their skills in the Middle East, Indian engineering, procurement and construction firms areready to return home as India’s economy is set for a comeback

97 IN INFRASTRUCTURE: ONGC offshore engineering services projects99 VIEWPOINT: The balance of power. K. Venkataramanan, Larsen & Toubro

100 COMPANY PROFILE: Tecnimont ICB100 IN COMPARISON: India’s olefins production capacity and output101 COMMENT: Move in for the skill. Human resources development is a critical

aspect of the push to develop India’s manufacturing sector102 INTERVIEW: Atul Punj, Punj Lloyd103 COMPANY PROFILE: TKIS-India104 INTERVIEW: Shaleen Vaid, OHCS Projects105 COMMENT: No country for marine growth. As India turns its attention

offshore, technologies to keep subsea structures clean come to the fore106 COMPANY PROFILE: Afcons Infrastructure106 IN THE WORKS: India’s planned infrastructure investment

107 COMPANY PROFILE: Technip108 INVESTOR SPOTLIGHTS: Fluor Daniel India, Petron Engineering

Construction, Wood Group Kenny India, Leighton India Contractors109 COMPANY PROFILE: Toyo Engineering India110 INVESTOR SPOTLIGHTS: Nauvata Engineering, Projects and

Development India, Magnus Global Tech, Swiber Offshore India111 VIEWPOINT: Firm foundation. Vivek Venkatachalam, IOT Infrastructure

and Energy Services

112 MARINE, SHIPPING & LOGISTICS

113 ARTICLE: Mixed signals. As India’s maritime sector gears up for expansion, concerns remain over the strength of India’s shipbuilding industry

113 IN THE WATER: ONGC’s logistics resources as of December 2014115 INTERVIEW: Arun Kumar Gupta, Shipping Corporation of India116 INTERVIEW: Dhruv Kotak, J.M. Baxi Group116 IN CARGO: Projected cargo throughput capacity at Indian ports117 INTERVIEW: Sunil Dhulekar, Arya Offshore Services118 COMPANY PROFILE: Mumbai Port Trust 119 COMMENT: There can only be one. Logistics companies anticipate a boost

from the proposed Goods and Services Tax that will simplify India’s byzantine commercial tax codes system

120 INTERVIEW: K.M. Sheth, Great Eastern Shipping,121 ILLUSTRATION: The rise of LNG fuel bunkering122 INVESTOR SPOTLIGHTS: Bertling Logistics India, Samson Maritime,

Rhenus Logistics India, Supreme Transport Organisation123 VIEWPOINT: Services in ship shape. Anand V. Sharma, Mantrana

Maritime Advisory123 IN CONTRACT: Chartering patterns of vessels by India’s operators124 INTERVIEW: Saifuddin Hajee, SHM Shipcare125 INTERVIEW: Ajay Reshamwala, Reshamwala Shipbrokers126 MAP: Bulk handling facilities at major ports127 IN TRAFFIC: Indian port traffic projections, fiscal year 2016/17127 IN THE FUTURE: Indian port traffic projections128 COMPANY PROFILE: Dolphin Offshore Enterprises (India)129 INTERVIEW: Pavithran Kallada, BDP International130 MARKET ANALYSIS: Any port in a storm. Percy Avari, Aramex India

132 DOWNSTREAM & RETAIL

133 ARTICLE: Refined taste. Steps towards liberalisation aid India’s downstream133 IN SUPPLY AND DEMAND: India's total refining capacity and domestic

demand for petroleum products135 INTERVIEW: B. Ashok, Indian Oil Corporation136 COMPANY PROFILE: Hindustan Petroleum Corporation137 VIEWPOINT: Plant advance. S. Varadarajan, Bharat Petroleum

Corporation138 INTERVIEW: Lalit Gupta, Essar Oil139 PROJECT HIGHLIGHT: Paradip Refinery140 MAP: Refineries and expansions142 COMPANY PROFILE: Numaligarh Refinery143 COMPANY PROFILE: Mangalore Refinery and Chemicals143 IN CAPACITY: Mangalore refinery and petrochemicals units’ capacity

CON

TENTS

IND

IA 2015

8

INDIA 2015

The Who’s Who of the Global Energy IndustryTHE OIL & GAS YEAR | INDIA 2015 www.theoilandgasyear.com

The Oil & Gas Year is audited by BPA Worldwide

72The Year’s Focus: Make in IndiaTo help bolster India’s economy, Prime Minis-ter Narendra Modi has launched the Make inIndia initiative. The goal of the programme isto revive the country’s neglected manufac-turing sector by facilitating investment, pro-moting innovation and modernising infra-structure. The availability of cheaper goodslocally will benefit the oil and gas industry.

96Engineering & ConstructionIn recent years, Indian engineering, procure-ment and construction companies have trav-elled far beyond the borders of their homecountry, a result of waning domestic demand.Indian enterprises have thrived abroad, winninglandmark contracts in countries such as Kuwaitand Saudi Arabia. With a number of lucrativeprojects being announced in India, these com-panies are using their experience to competewith international players on their home turf.

48The Gas YearIndia’s growing population has impacted nat-ural gas demand in both the domestic andcommercial sectors, and power plants are oftenshort of feedstock. To bridge the gap betweensupply and demand, the government has en-acted a series of natural gas pricing reforms toincentivise domestic exploration. India has alsodiversified its LNG import partnerships, lookingto countries such as the US, Australia, Qatarand Russia to meet the market’s rising needs.

144 VIEWPOINT: Refining technology. Steven Gimre, UOP India145 INTERVIEW: Jean-Paul Margotin, Axens India146 VIEWPOINT: India’s diesel liberalisation. Amrita Sen, Energy Aspects147 ARTICLE: Deregulation transformation. The Indian government finally

sheds a heavy subsidy burden 148 MAP: India’s proposed Bharat stage fuel transition149 INTERVIEW: Ravi Shinde, Consortium of Indian Petroleum Dealers150 INVESTOR SPOTLIGHTS: Adani Gas, Mahangar Gas151 INTERVIEW: Narendra Kumar, Indraprastha Gas152 VIEWPOINT: LPG playing field. Ajay Kumar, SHV India

154 PETROCHEMICALS & FERITLISERS

155 ARTICLE: Fertile sector. India is the biggest petrochemicals market in Asia155 IN EXPORT: India’s petrochemicals exports, 2013/14156 MAP: Petroleum, chemicals and petrochemicals investment158 MARKET ANALYSIS: Scarcity is the mother of invention. S.K. Nanda,

Gujarat State Fertilizers & Chemicals159 COMMENT: Need for feedstock. Securing urea supply is essential to feeding

India’s large population160 INTERVIEW: Neeru Abrol, National Fertilizers160 IN PRODUCTION: National Fertilizers’ urea production by plantFOLDOUT MAP: India’s urea scenario161 COMPANY PROFILE: Rashtriya Chemicals and Fertilizers163 INVESTOR SPOTLIGHTS: Haldor Topsoe India, KBR India,

JBF Industries164 PROJECT HIGHLIGHT: Talcher Complex164 RESOURCE: Coal gasification165 ARTICLE: Petrochemicals potential. Demand for polymers is rising165 IN POLYMERS: India's polymer demand and supply scenario 166 PROJECT HIGHLIGHT: Dahej Integrated Petrochemicals Complex167 COMPANY PROFILE: ONGC Petro Additions168 COMPANY PROFILE: BASF India

170 POWER GENERATION

171 ARTICLE: Fuel for thought. Gas-based electricity production plays an important role in India’s quest for consistent power supply

171 IN DEMAND: Projected power generation sector gas feedstock demand172 INTERVIEW: Rathin Basu, Alstom India & South Asia172 IN COST: Cost of generating electrical power from different fuel sources173 RESOURCE: India’s power generation capacity 174 INTERVIEW: Prabhat Saxena, Schneider Electric India175 ILLUSTRATION: The ONGC Tripura Power Plant176 VIEWPOINT: In the energy mix. Nandkumar Pai, Wärtsilä India

178 ASSOCIATED SERVICES

179 ARTICLE: Develop and verify. Technology and research and development will have to advance to bolster India’s energy industry

179 IN RESEARCH: Indian oil and gas companies’ research and development expenditure

180 IN THE REGION: Services sector growth181 INTERVIEW: Paul House, SGS India182 COMMENT: Clouds ahead. The government’s Digital India strategy183 INVESTOR SPOTLIGHTS: VCS Quality Services, Bureau Veritas India,

KBC Advanced Technologies, FLIR Systems India184 INTERVIEW: Eduard Van Dam, Global Vectra184 IN THE AIR: ONGC’s helicopter fleet and planned expansion185 INVESTOR SPOTLIGHTS: Emerson Process Management India, DNV GL

186 EXECUTIVE GUIDE

187 ACCOMMODATION191 EVENTS194 ACKNOWLEDGEMENTS | ADVERTISERS INDEX196 IN BRIEF

Publisher: Emmanuelle Berthemet Editor-in-Chief: Gilles Valentin COO: Aslı Konyalı Regional Director: Eric Gay Country Director: Mickael Vogel Country Co-ordinator:Brindusa Negrea Managing Editor: Simon Johns Production Manager: Alex Mazonowicz Chief Sub-Editor: Amanda Towle Deputy Chief Sub-Editor: Suzanne Carlson Web Editor: Angus Foggie Sub-Editors: Leyla Amur, Jessica-Elise Turner Austin, Jessenia Chapman, John Houghton-Brown, James Kiger, Laura Moth, Daniel Salinas, JordanSchultz, Matthew Vance Editorial Intern: Dilara Gülekçi Contributors: Ian Ackerman, Dan Brookes, George Dyson, Tomás Engle, Max Harwood, Joseph Logan, Cristina OlgaMihu, Christina St. John, Oliver Tree, Jasmine Whiting, Sjoerd ten Wolde Creative Director: Begüm Alpay Co-ordinating Art Director: Javier González Art Directors: Hasanİlkan Cebeci, Ahmet Sağır, Didem Tereyağoğlu, Melis Tüzün Circulation & Communication Director: Laura Carr HR: Ece Özmen, Begüm Yurttaş Head of Finance: HasanMeriç Printing: APA Uniprint Production: The Oil & Gas Year, Ltd. ISBN 978-1-78302-102-4 E-mail info@theoilandgasyear.com Visit www.theoilandgasyear.com Cover:photograph courtesy of IOT Infrastructure & Energy Services

The Oil & Gas Year is a trading name of The Oil & Gas Year Ltd. Copyright The Oil & Gas Year Ltd. 2015. All rights reserved. No part of this publication may be reproduced, stored

in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopied, facsimiled, recorded or otherwise, without the prior permission of The

Oil & Gas Year Ltd. The Oil & Gas Year Ltd. has made every effort to ensure that the content of this publication is accurate at the time of printing. However, The Oil & Gas Year

Ltd. makes no warranty, representation or undertaking, whether expressed or implied, nor does it assume any legal liability, direct or indirect, or responsibility for the accuracy,

completeness or usefulness of any information contained in this publication.

Exploring knowledgeExtracting intelligenceRefining communicationINTERNATIONAL

CON

TEN

TSIN

DIA

201

5

9

INDIA 2015The Who’s Who of the Global Energy Industry

THE OIL & GAS YEAR

The Who’s Who of the Global Energy Industry THE OIL & GAS YEAR | INDIA 2015www.theoilandgasyear.com

xx112Marine, Shipping & LogisticsThe growth of India’s offshore oil and gas in-dustry has highlighted the need for develop-ment in the country’s maritime sector. The gov-ernment has made moves to revitalise thesector a priority with the publication of theMaritime Agenda 2020, which outlined a planto double India’s existing major port capacity.The country is also set to build its first floatingLNG terminal as its energy imports increase.

170Power GenerationIndia’s feedstock deficits have impacted thecountry’s ability to generate electricity. Severalmodernisation efforts have fallen by the way-side as a direct result of the country’s inabilityto supply gas. The 2012 blackouts, which leftmillions without electricity, also highlight thelimits of India’s power infrastructure. The coun-try needs to address its ability to supply elec-tricity both domestically and commercially.

154Petrochemicals & FertilisersIndia has committed to the expansion of itspetrochemicals sector, already the largest inAsia, as well as the revitalisation of its fer-tilisers production. Demand for both petro-chemicals and fertilisers is growing, but thesesectors face natural gas feedstock deficits.To address this issue, the Indian governmenthas implemented a gas-pooling scheme, inaddition to investing in the Talcher complex,an innovative coal-to-gas conversion plant.

11 Set the frameworkDharmendra PRADHANMinister of State for Petroleum and Natural GasMINISTRY OF PETROLEUM AND NATURAL GAS

14 The Year’s Awards

16 Investors Index

THE YEAR IN REVIEW

What parts of India’s oil and gas supply chainhave opportunities for investment?India’s oil and gas industry is expected to growwith the country’s economy and the accompa-nying demand for energy. Immediate investmentopportunities exist in the upstream, midstreamand downstream sectors.

Potential investment areas include the ex-ploration and production of conventional andunconventional oil and gas, such as coal bed

methane, shale gas and underground coal gasi-fication. The government will soon invite bidsfor a fresh round of exploration and productionwith a world-class policy framework.

India needs substantial investments in itsgas industry. Prime Minister Narendra Modi hasmade the formation of a national gas grid a toppriority through the addition of 15,000 kilometresof gas pipelines. The expansion of the gas gridwill also provide the necessary infrastructure forfurther investments in enhanced production ofdomestic gas and a higher volume of LNGimports. Investment opportunities are also presentin LNG import and liquefaction facilities.

How is the new Indian government addressingoil and gas investors’ concerns?Despite the government’s policy of allowing100-percent foreign direct investment in thecountry’s hydrocarbons industry, internationalinvestors have been reluctant to invest in India.Major hindrances have included a policy blockadeand a lack of clarity on major regulations suchas production-sharing contracts, the pricing ofcommodities and subsidy mechanisms. Prime

Minister Narendra Modi’s government is com-mitted to implementing an operational frameworkthat will incentivise domestic exploration andproduction through appropriate fiscal policiesand incentives, a transparent and stable regulatoryregime, a reliable monitoring mechanism and afacilitating business environment.

The Ministry of Petroleum and Natural Gasis taking measures to advance along those fronts.In October 2014, the government deregulateddiesel and announced a revised formula forpricing domestically produced gas.

The issues of fuel subsidies and remunerativepricing for domestic gas had been on the tablefor a long time, and both of these steps will addnew potential to the Indian oil and gas industry.Domestic hydrocarbons production is on a muchsurer footing after resolving these issues.

How does the government plan to encouragemore exploration of India’s sedimentary basins?India’s 26 sedimentary basins have not been ex-ploited to optimum levels, and we plan to en-courage their exploration through several meas-ures, including the improvement of infrastructure,logistics, technology, data, security and workforceskills. We are also taking in-principle statutoryclearances from the Ministry of Defence, Ministryof Home Affairs and Ministry of Environment,Forests and Climate Change for all of the blocksidentified for offer in the next round of bidding.

Exploration is essential for enhancing do-mestic production in India. Geo-scientific dataon nearly 48 percent of the more than 3 millionsquare kilometres of Indian sedimentary basinsis either scarce or unavailable.

To assist in the identification of new andunexplored areas with hydrocarbons prospectivity,a project to survey nearly 1.4 million square kilo-metres in the next five years has been approved.In addition, a project has begun to reassess ourhydrocarbons resources based on geo-scientificdata generated over the past few decades. Anational data repository will soon be functional.

We are also implementing a multi-clientspeculative survey policy under which servicesproviders have applied to survey Indian offshoreareas. This geo-scientific information will definitelyhelp incentivise upstream companies to investin the country and explore its sedimentary basins.

India’s 26sedimentary basins have not been exploitedto optimum levels, andwe plan to encouragetheir exploration.

IN FIGURES

India’s estimated coal bed methane reserves

2.6 tcmIndia’s estimated shale gas reserves

8.5 tcm-59.5 tcmTargeted yearly regasified LNG import capacity by 2017

32.5 milliontonnes

The Who’s Who of the Global Energy Industry THE OIL & GAS YEAR | INDIA 2015

THE

YEA

R IN

REV

IEW

11

INTE

RVIE

W

INTERVIEW

Minister of State for Petroleum and Natural Gas Dharmendra Pradhan talks toTOGY about India’s hydrocarbons potential and the ministry’s efforts to attractfurther investments to the domestic industry. While the country is the fourth-largest energy consumer internationally, its sedimentary basins remainunderexplored and its oil and gas production has been relatively stagnant.

Set the framework

Dharmendra PRADHANMinister of State for Petroleum and Natural Gas

THE YEA

R IN REVIEW

INTERVIEW

12

INTERVIEW

The Who’s Who of the Global Energy IndustryTHE OIL & GAS YEAR | INDIA 2015

How important are unconventional resources?The Directorate General of Hydrocarbons hasestimated the country has coal bed methaneresources to the tune of 92 tcf (2.61 tcm). Wehave to tap and monetise every possible sourceof energy in unconventional hydrocarbons.

India’s shale gas reserves could be anywherebetween 300 tcf (8.5 tcm) and 2,100 tcf (59.5tcm). While coal bed methane production is un-derway, under the current agreement, explorationof shale gas is being carried out by the Oil andNatural Gas Corporation (ONGC) alongside OilIndia. The first shale well was drilled by ONGC inJambusar (Cambay Basin) in November 2013.

A new uniform licensing policy is in theworks. It will allow unconventional oil and gas ina block to be harnessed along with conventionalresources. The National Gas Hydrate programmephase two has been launched to collect moredata on hydrates to encourage exploitation.

How is the gas supply deficit being addressed?The government has adopted a two-prongedapproach to address the gas supply deficit. Onone side, India’s gas production will be increased.ONGC will raise its gas output by more than 80percent by the year 2019.

Infrastructure to import greater volumes ofLNG will also be built. This includes setting upnew LNG terminals, raising existing terminal ca-pacity and expanding the gas grid.

India’s LNG regasification capacity is at 22million tonnes per year. The targeted yearly ca-pacity from 2015 to 2016 is 25 million tonnesand 32.5 million tonnes from 2016 to 2017. LNGterminals have been proposed on both the eastand west coasts of India, and some of theseprojects, such as Kakinada and Ennore, havereached advanced stages of the planning phase.

How will domestic production be increased?Besides exploration, we need to fully monetiseour discoveries and bring them on stream. Atthe same time, we need to carry out a capital-and technology-intensive drive to improve re-covery at existing and maturing fields.

Extra focus will be given to small and marginalfields. In 2015, we are planning to auction 69small and marginal oil and gasfields to privatecompanies with a new revenue-sharing model.

How can the new natural gas pricing formulaincentivise upstream investments?The rationalisation of gas prices in line with in-ternational practices has been a major initiativeof the government. Gas is the fuel of the future.In the global energy basket, gas has a 24-percentshare, whereas in India, this figure is only 8percent. Locating, producing, sourcing and usinggas is imperative to meet growing energy needs.

The issue of remunerative pricing for domesticgas finds has long been pending. With the an-nouncement of a new gas pricing formula, thedomestic oil and gas industry is on a much surerfooting to monetise gas discoveries. The gov-ernment is also working on a suitable formulafor giving a premium on gas to be producedfrom deepwater and ultra-deepwater, as well ashigh-pressure and high-temperature fields.

What is the best way to address under-recoveriesmade by oil marketing companies?Public sector oil marketing firms incur losses onthe sales of subsidised domestic liquefied pe-troleum, gas and kerosene sold through thepublic distribution system.

The government has taken several steps toaddress these losses. Effective since October 18,2014, the price of diesel at the retail- and refin-ery-gate level is determined by the market. The

government also decided to relaunch the mod-ified direct benefit transfer of the LPG consumersubsidies on November 15, 2014 in 54 districts,and in the entire country by January 1, 2015.

While public oil marketing companies hada gross under-recovery on sales of controlledpetroleum products during fiscal year 2013/14(April-March) amounting to Rs1.4 trillion ($23billion), this gross under-recovery is expected tocome down substantially to around Rs720 billion($11.5 billion) during 2014/15.

What role can the private sector play in theministry’s strategic goals?Our government endeavours to ensure maximumexploitation and utilisation of our natural resources,especially in the field of energy. For this, we willtake all necessary measures, including encour-aging private players, to achieve our targets.

We welcome global majors to participate inall sectors of the industry. Outside investment isone of the 25 major thrust areas of the Make InIndia initiative of the new government aimed atbringing back international investors to manu-facture, research and set up their facilities here.

We need to carryout a capital- and

technology-intensivedrive to improve

recovery at existing and maturing fields.

IN FIGURES

Number of small and marginalfields to be auctioned in 2015

69Area to be surveyed in the next five years

1.4 million squarekilometresTargeted LNG regasificationcapacity by 2017

32.5 milliontonnes per year

Prime Minister Modi is committed to incentivising domestic exploration and production

THE YEA

R IN REVIEW

THE YEA

R’S AWA

RDS – IN

DIA

2015

14

THE YEAR’S AWARDS – INDIA 2015

The Who’s Who of the Global Energy IndustryTHE OIL & GAS YEAR | INDIA 2015

ONGC Videsh has become India’s flagship exploration and production entity overseas. Thecompany’s Perspective Plan 2030 has set a goal to increase its production to 20 million tonnesof oil equivalent and 60 million tonnes of oil equivalent by fiscal year 2018/19 (April-March)and 2029/30, respectively. As of March 2015, ONGC Videsh had 36 oil and gas assets in 17countries and was producing about 12 percent of India’s hydrocarbons output. In late 2014, thecompany was awarded exploration block 14TAR-R1 by the government of New Zealand.

Essar Oil is at the forefront of India’s efforts to develop unconventional natural gas reservessuch as coal bed methane (CBM) and shale gas. The company possesses the country’s largestCBM acreage, which covers more than 2,700 square kilometres. At Essar Oil’s Raniganj CBMasset, the company has deployed a fleet of drilling rigs and four hydrofracturing units. In April2015, the production of natural gas at the Raniganj asset surpassed 500,000 cubic metres (17.7mcf) per day, placing Essar Oil in the position of the largest CBM producer in the country.

In March 2015, the Indian Oil Corporation opened the crude line from its Paradip refinery’scrude pump house to atmospheric and vacuum unit, marking the start of the refinery’s com-missioning. The Paradip refinery will be India's most modern, with a complexity index of 12.2,a capacity of 15 million tonnes per year and more than 20 processing units. The complex isdesigned to process high-sulphur crude oil and the cheaper heavy high-sulphur Maya, Ratawiand Kuwait Export Crude oils, the latter of which has a crude blend of around 27 degrees API.

On October 31, 2014, Cairn India started its polymer injection project at the Mangala field inits onshore Rajasthan block. Among the largest polymer flood enhanced oil recovery programmesin the world, the project is part of the company’s $2.4-billion development of the Mangalafield, which produces 150,000 barrels of oil per day. Cairn India plans to drill 141 new wells:117 injectors and 24 producers. The company used a chemical flooding process in the Bhagyamand Aishwariya fields, which are located near Mangala, in the second phase of the project.

French engineering, procurement and construction firm Technip has operated in India since1998. Over the past four years, the conglomerate has merged its five arms into a single Indiaunit. In 2014/15, Technip was awarded a contract to provide project management andengineering, procurement and construction services to Air Products & Chemicals for the newindustrial gas complex in Cochin. The company also secured a €100-million contract fromONGC to build a 6 mcm (211.8 mcf) terminal at Odalarevu in Andhra Pradesh state in 2015.

MAN OF THE YEAR

DHARMENDRA PRADHAN

An active member of the Bharatiya Janata Party, DharmendraPradhan was appointed India’s minister of state for petroleum andnatural gas in May 2014. In his new role, Pradhan brought change toan oil and gas industry plagued by policy uncertainty and depletingproduction. Over the past year, Pradhan has overseen landmarkreforms that have transformed India’s hydrocarbons industry, such asthe increase of gas prices to $5.61 per million British thermal unitsand the deregulation of diesel in October 2014. Pradhan supports theGive it Up movement, which encourages people to donate theirsubsidy LPG cylinders in order to provide LPG to rural populations.

UNCONVENTIONAL DEVELOPMENT PROJECT OF THE YEAR

ENERGY SECURITY COMPANY OF THE YEAR

DOWNSTREAM PROJECT OF THE YEAR

ENHANCED OIL RECOVERY PROJECT OF THE YEAR

INTERNATIONAL EPC COMPANY OF THE YEAR

THE

YEA

R IN

REV

IEW

IND

IA A

T A

GLA

NC

E

15

INDIA AT A GLANCE

The Who’s Who of the Global Energy Industry THE OIL & GAS YEAR | INDIA 2015

POLITICSOfficial name: Republic of India

Political system: Federal republic

Head of state: President Pranab Mukherjee

Head of government: Prime Minister Narendra Modi

Capital city: New Delhi

DEMOGRAPHICSPopulation: 1,236,344,631 (2014 estimate)

Population growth rate: 1.25 percent (2014 estimate)

Major languages: Hindi, English (subsidiary official language), Bengali,

Telegu, Marathi, Tamil, Urdu, Gujarati, Malayalam, Kannada, Oriya, Punjabi,

Assamese, Kashmiri, Sindhi, Sanskrit

ECONOMYCurrency: Rupee (Rs1:$0.0159)

GDP: $2.05 trillion (2014)

Labour force: 502 million (2014 estimate)

Inflation rate: 8 percent (2014 estimate)

Natural resources: Coal (fourth-largest reserves in the world), metals,

minerals, rare earth elements, natural gas

Main industries: Textiles, chemicals, food processing, steel, transport

equipment, cement, mining, hydrocarbons, machinery, software

Exports: $343 billion (2014 estimate)

Imports: $508 billion (2014 estimate)

Export destinations: UAE (12.0 percent), US (12.0 percent), Singapore (4.5

percent), China (4.4 percent), Hong Kong (4 percent) (2013)

Import origins: China (11 percent), UAE (7.8 percent), Saudi Arabia (6.9

percent), Switzerland (6 percent), US (4.9 percent)

GEOGRAPHYArea: 3,287,263 square kilometres

Coastline: 7,000 kilometres

ENERGY2015 proven oil reserves: 5.7 billion barrels

2014 oil production: 895,000 barrels of oil per day

2015 proven gas reserves: 1.33 tcm (47 tcf)

2013/14 gas production: 3.54 bcm

Sources: CIA World Factbook, International Monetary Fund, World Bank, X-rates,

Indian Ministry of Commerce & Industry, US Energy Information Administration

CHINACHINA

PAKISTANPAKISTAN

NEPALNEPAL

INDIAINDIA

BHUTANBHUTAN

BANGLADESHBANGLADESH

SRILANKA

SRILANKA

AFGHANISTANAFGHANISTAN

MYANMARMYANMAR

Jaipur

Amritsar

Kolkata

Guwahati

Ahmedabad

HyderabadKakinada

Cochin

Thiruvananthapuram

Pune

Mumbai

Panaji

ChennaiBangalore

Uttar Pradesh

Kerala

Chhattisgarh

WestBengal

Tamil Nadu

KarnatakaGoa

AndhraPradesh

Maharastra

Madhya Pradesh

Gujarat

Odisha

Jharkhand

Tripura

Manipur

Mizoram

Meghalaya

ArunachalPradesh

Nagaland

Assam

Sikkim

Bihar

Haryana

UttarakhandPunjab

HimachalPradesh

Jammu and Kashmir

Rajasthan

Telengana

NEW DELHI

International boundary

State boundaryCity

National capital

International airport

Kilometres

0 400200 800

ARABIAN SEA

BAY OF BENGAL

Andaman and NicobarIslands

© 2015 The Oil & Gas Year Ltd., The Oil & Gas Year India 2015. All rights reserved.