Global Opportunities for Energy Security

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Global Opportunities for Energy Security

• Presentation
• By
• R S Butola
• MD ONGC Videsh Limited

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Energy Security
The Umbrella Term
Source CERA
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Dimensions of the Energy Security

• 1970s -Arab Embargo and the Iranian Revolution
• 1990s -Environmental problem Climate change
• -Liberal Democracy and Market Capitalism
• 2000 .. -Nationalist fervor / Extremist threat
• emerging Parallelly
• -Unparallel demand growth
• -Sustainable Development
• - Alternate fuels/resources are in embryonic
  stage
• Energy enters domain of Geo-politics
• Security becomes the concern

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Energy Issue Map
Source World Economic Forum 2006
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The Impact
Oil Price Spikes Global Economic Growth
Source IMF CERA
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The Opportunity
Oil Intensity of Global Economy
Source IMF CERA
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The case of energy World primary energy demand
by fuel
7000
6000
35 27 21 11 5 2
5000
4000
34 22 10 7 3
Mtoe
3000
2000
1000
0
1970
1980
1990
2000
2010
2020
2030
(source IEA)
Coal
Oil
Gas
Nuclear
Hydro
Other
Fossil Fuels Coal, Oil Gas to remain the
main sources of Energy Share of Gas would
increase in the future
Source IEA
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The Changes

• Demand Centre
• Supply Centre
• Geo-Politics
• Resource as a Tool
• The New Engagements

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Refined Products Demand
Changes by region 2005-2015
Source CERA
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The World Population
From 6.53 billion in 2006 to 8.0
billion in 2030
Source EXXON
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Structural Changes
In million barrels per day
Oil Production Capacities Increases 15 Countries
dominate long term Oil Supply Growth
Source CERA
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Supply Corridors (Mostly West wards)
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International LNG Trade Connecting Markets
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Surplus Capacities are Decreasing
Source IMF BP
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India Oil Consumption
Future Oil Consumption
Past Oil Consumption
CAGR 2001-2025 4.1
CAGR 1995-2004 6.1
BP Stats data for past oil consumption EIA,
International Energy Outlook 2003
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Widening Oil Demand in India
(MMT)
Year Ending March 31 Production Consumption Gap Self S.
1998 33.86 90 56.7 37.4
1999 32.72 97.1 64.3 33.7
2000 31.95 100 68.1 31.9
2001 32.43 100.4 67.6 32.4
2002 32.03 104.1 71.9 30.7
2003 33.04 108.1 75.1 30.6
2005 34.00 119 85.0 29.0
2007 173.00
2012 240.00
2025 364.00
Consumption
Widening Gap
Production
Source PPAC IHV 2025
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HOW BIG COULD BE AN INDIAN PIE (Opportunities)
INTERNATIONAL PETROLEUM INDUSTRY ENVIRONMENT
INTERNATIONAL INDUSTRY PLAYERS
Possible Indian Pie
Troubled Middle East
Geo-Politics
Unexplored /Frontier Areas
North South America
South East Asia
Market Structure Dynamics
Cartels Trade Blocks
Russia FSU
Africa
Unapproachable Middle East
Areas not Available for Business
Imbalances
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Our International Presence
OVL has 24 Projects (36 Blocks) in 14 Countries
By 27th July OVL has contracted 21 Projects (32
Blocks)
Qatar 1
Russia 1
Egypt 1
Syria 11
Libya 3
Iraq 1
Iran 1
Cuba 2
Nigeria 2
Operator Iran, Farsi Iraq, Bl 8 Qatar, Na
Nj Vietnam 127 Vietnam 128 Cuba 34 Cuba 35 Libya
81-1
Brazil
Nigeria 1 in JDZ
Myanmar 2
Vietnam 3
Sudan 3
Joint Operator Sudan GNOP Egypt Bl. 6
Producing Assets Development
Exploration
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The Issues

• Energy Security and its Forms
• Government - Role Influence
• Compete or Collaborate
• Harnessing Interdependencies
• Cris-cross Investments
• Buyer-Seller Engagements
• Technology Alliances
• NOC and IOC
• Up-gradation
• Securing the flow of Energy
• Collaborative Energy Corridors
• Alternate Energy Sources
• Market - The ultimate Arbiter
• Promoting Investments

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The Approach

• Pursue an Integrated Energy Policy
• Harness vast Coal, Hydel resources to generate
  power
• Realize Nuclear power potential
• Accept the reality that despite growth of
  alternate fuels, oil would continue to be main
  transportation fuel
• Access to hydrocarbon resources is a key
  ingredient of Energy Security
• Promote investments by Indian Companies
• Proactive role of Government
• Empowerment and enabling framework for companies
• Explore and Develop Interdependencies
• Economic Packaging
• Leveraging Market Access
• Strengthen the flow Pipelines - Infrastructure

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Thank You