Directorate General of Hydrocarbons

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Indian Upstream Offshore Sector Opportunities
Challenges
S.K. Srivastava Deputy Director General
Directorate General of Hydrocarbons New Delhi,
India
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PRESENTATION OUTLINE

• Sedimentary Basins
• Offshore Operation
• Opportunities
• Challenges
• Conclusion

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SEDIMENTARY BASINS
26 sedimentary basins
Total area 3.14 million Sq.km
SHALLOW WATER 0.4 Million Sq Km
ONLAND 1.39 Million Sq Km
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44
42
DEEP WATER 1.35 Million Sq Km
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RESOURCE BASE

• Sedimentary Area 3.14 Million Sq. Km.
  ( 4 of the worlds sedimentary area)
• Sedimentary Basins 26 ( Exploration
  initiated in 15 )
• Prognosticated Resources 205 Billion Barrel
  (OOEG) (For 15 Basins
  only under re-evaluation)
• Established in place reserves 67 Billion
  Barrel
• (OOEG) (As on 01.04.2008)
• Yet to Find 138 Billion Barrel
  

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EXPLORATION STATUS
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NEW EXPLORATION LICENSING POLICY

• Effective since 1999
• Award of licenses through international
  competitive bidding
• Fast track approval mechanism
• Directorate General of Hydrocarbon (DGH) as
  single window
• No State participation or any carried interest
• International pricing for Crude oil market
  driven prices for Natural gas

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FISCAL HIGHLIGHTS - NELP

• No Oil Industry Development cess
• No signature, discovery or production bonus
• No custom duty on imports for Petroleum Operation
  
• Income Tax holiday of 7 years for Mineral Oil
• No ring fencing of expenditures and incomes for
  income tax purposes
• Cost recovery biddable- Up to 100
• Sharing of Profit Petroleum with Govt. on
  biddable pre-tax investment multiple

Contd..
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FISCAL HIGHLIGHTS - NELP

• Fiscal stability as part of the contract
• Low to moderate royalty rates between 5 to 12.5
• Special concessions for deepwater blocks
• Full repatriation of profits
• Liberal set off of losses and carry forward
  provisions for income tax purposes
• Tax Incentives for Site Restoration Fund Scheme
  (SRFS)

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BLOCKS CONTRACTED
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INCREASING PARTICIPATION
BIDDING COMPANIES
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AREA AWARDED
AREA awarded 2.15 Million Sq Km (68)
Total area 3.14 Million Sq Km
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Offshore Operation - India
Indian Coast line Main land 5423 Km AN
1962 Km Lakshadweep 132 Km Total
7517 Km
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OFFSHORE OPERATION
Area in Sq.Km as on 1.4.2008
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OFFSHORE BLOCKS UNDER OPERATION

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COMPANIES IN OFFSHORE OPERATION
Including nomination blocks (as on 01.04.2008)
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OFFSHORE AREA WISE DISTRIBUTION
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BLOCKS UNDER OPERATION
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FRONTIER DEEP WATER AREA
Total sedimentary Area 3,140,000 sq km
Non Frontier Basins 1,260,500 sq km
Frontier Basins 1,879,500 sq km (60)
On land Shallow water 529,500 sq km
Deep Water 1,350,000 sq km (72)
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First Deepwater Project in India
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OPPORTUNITIES
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OPPORTUNITY - GEOPHYSICAL WORK
Volume of Work Committed (next 5 years)

• Seismic data acquisition
• Data Processing
• Data Interpretation
• Visualization Center
• Data Repository

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OPPORTUNITY DRILLING AND WORK OVER JOBS

• Rigs Onshore and Offshore
• Cementing Services
• Mud Logging Services, Well Logging
• Mud Engineering Services
• Testing Labs
• Work Over Rigs
• Supply Boat, Helicopter services
• supply of Tubular, drilling bits, Mud
  Chemicals etc.

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OPPORTUNITIES - FIELD DEVELOPMENT

• Design Engineering
• Engineering Consultancy
• Fabrication
• Pipeline Work
• Testing Labs
• Supply Vessels, Chopper
• Flow lines, Production Platforms, FPSO etc.
• Equipments for sub Sea developments

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EXPECTED FUTURE DISCOVERIES
2009-10
LEGEND
2009-2010
2010-2011
2011-2012
2008
2009
2012-2013
2010
2011
2012
2013
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EP BLOCKS ON OFFER NELP VIII
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BLOCKS ON OFFER - CBM-IV
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CHALLENGES

• Logistics
• Infrastructure
• Environment
• Indeterminate HC potential
• High Risk

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CHALLENGES - DEEPWATER ENVIRONMENT

• Remoteness
• Distance from Shore
• Distance from Infrastructure
• Depth (potentially beyond 400 meters)
• Hydrostatic Pressures
• Extreme Low Sea Water Temperatures

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CHALLENGES -DEEPWATER ENVIRONMENT

• Met- ocean Conditions
• Severe Surface Conditions (wind, wave,
  current
• Deep Ocean Currents (often poorly understood,
  sparse data)
• Flow Assurance Issues
• Formation of Hydrates, Paraffin, Waxes
  Asphaltenes etc

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FLOW ASSURANCE CHALLENGES
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RESOURCE CRUNCH

• Lack of infrastructure
• Non Responsive Service industry
• Outsourcing Geological services
• Deep water Rigs Non-availability
• No / less Manufacturing industry
• No response for development of indigenous
  services even after the biggest gas discovery in
  2002

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WAY FORWARD

• Strategies to bridge
• Resource gap
• Technology gap
• Knowledge gap
• Industry oriented R D
• Focused approach between Policy makers
  Industry - Academia

Tec Knowledge gap
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Conclusion

• Indian sedimentary basins are under explored
• Huge opportunities exist in offshore /
  Deep-waters
• Service Industry to response the demand
• Resource availability is a big challenge
• Offshore Safety and Security is a matter of
  concern
• Cohesive approach between Industry Academia
  Policy Makers

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Thank You
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