HYDROCARBON EXPLORATION AND PRODUCTION ACTIVITIES INDIA 2011-12 DGH DIRECTORATE GENERAL OF HYDROCARBONS Under Ministry of Petroleum & Natural Gas, Govt. of India ea=kh isVªksfy;e ,oa izkÑfrd xSl ubZ fnYyh&110 001 ,l- t;iky jsM~Mh MINISTER S. JAIPAL REDDY PETROLEUM & NatURAL GAS GOVERNMENT OF INDIA NEW DELHI-110 001 MESSAGE With the ever increasing gap between the demand and supply in the Hydrocarbon sector, the scenario is a challenge for a country. The growing economy is bound to increase the demand for energy further and a good portion of this demand will have to be met by hydrocarbons. Despite increased exploration and production activities in the country by both national oil companies and private players, India depends on imported crude to meet 75% of its domestic demand. In line with the Hydrocarbon Vision 2025, the main thrust of the activities for the upstream sector would be to focus on oil security, through intensification of exploration efforts and achievement of 100% coverage of unexplored sedimentary basins, in a time bound manner. The hydrocarbon sector is open and there is free and fair competition, between public sector enterprises, private companies and other international players. All acreages are awarded through International Competitive Bidding with no mandatory state participation. To bridge the ever increasing supply and demand gap it is imperative to focus our attention also to the economic exploitation and commercialization of the unconventional Resources as well. The Directorate General of Hydrocarbons (DGH) plays a pivotal role in the country’s upstream hydrocarbon sector. Its role in attracting foreign investments in the E&P sector along with the effective monitoring of the activities of exploration and production deserves to be acknowledged and applauded. This report on the “Hydrocarbon Exploration and Production Activities 2011-12” encapsulates the gist of the activities in this vital sector and highlights the performance of all the players involved in the quest for hydrocarbons in the country. I congratulate the DGH for intricately carrying out its duties and complement its staff for responsibly implementing the mandate given to them by the Government of India. (S. Jaipal Reddy) jkT; ea=kh isVªksfy;e ,oa izkÑfrd xSl vkj-ih-,u- flag ubZ fnYyh&110001 R.P.N. SINGH MINISTER OF STATE FOR PETROLEUM & NatURAL GAS GOVERNMENT OF INDIA NEW DELHI-110 001 MESSAGE Increasing gap between demand and supply of oil & gas provides ample investment opportunities in the Indian hydrocarbon industry but is a growing concern for the Government of India. The launch of New Exploration Licensing Policy (NELP), with an aim of encouraging private sector participation in the oil and gas sector, was effective in providing healthy professional competitiveness, with an influx of new technology and new ideas. The National Oil Companies along with the Private Companies / Joint Ventures have been successful in discovering hydrocarbons over the last decade. The NELP has so far facilitated Nine International Competitive bidding rounds inviting wider participation form major oil and gas companies. I look forward for aggressive exploitation of reserves, faster field developments from new discoveries and exploration through forthcoming NELP rounds for conventional resources, to meet future challenges of energy demand. The report entitled “Hydrocarbon Exploration and Production Activities 2011-12” is a well detailed document to keep us abreast of the latest in the upstream hydrocarbon sector, particularly fields and exploratory blocks under Production Sharing Contracts (PSC) and Coal Bed Methane (CBM) fields. It acts as a ready referral for those keen to contribute in India’s endeavours for its energy security. I compliment Directorate General of Hydrocarbons (DGH) on this compilation and appreciate their efforts for the effective implementation of Government policies and efficient management of the country’s vital resources. (R.P.N. Singh) Hkkjr ljdkj isVªksfy;e ,oa izkd`frd xSl ea=ky; 'kk=h Hkou] ubZ fnYYkh & 110001 miHkksDrk fiu dksM & 110115 Government of India Ministry of Petroleum & Natural Gas G.C. Chaturvedi, IAS Shastri Bhawan, New Delhi-110 001 Secretary Customer Pin Code - 110115 MESSAGE Efficient, reliable and competitively priced energy supplies are prerequisites for accelerating economic growth. Affordable energy directly contributes to reducing poverty, increasing productivity and improving quality of life. For a developing country like ours, the strategy for energy development is an integral part of the overall economic strategy. Efficient use of resources and long-term sustainability remains core objective of economic planning. Hydrocarbons have been a major chunk of the energy basket globally, India being no exception. High oil and gas prices have prompted increased in level of investments in the exploration and production (E&P) sector, posing new challenges for the sector in the form of increased cost of operations due to high service costs, exposure to logistically difficult terrain and shortage of technical manpower. The Government is committed to mitigating these challenges and has, in fact, launched accelerated domestic exploration through its New Exploration Licensing Policy (NELP) policy initiative. Some of the world class oil discoveries have recently been reported from blocks offered under the NELP regime In years to come it is indicated that the share of gas in the energy basket would increase. Alternate Resources like Coal Bed Methane, Shale gas are also expected to contribute to the supply chain. The role of the Directorate General of Hydrocarbons therefore is extremely vital and productive. As the technical arm of the Ministry, critical inputs from DGH have been much appreciated and helped the Government take timely decisions to accelerate the exploration activities in the country. The team DGH has been consciously and efficiently playing the pivotal role in the hydrocarbon sector fulfilling the mandate given to them through the Cabinet Resolution of 1993. “Hydrocarbon Exploration and Production Activities 2011-12” is a well documented script which is eagerly awaited by all concerned. I am pleased to pen my thoughts for the readers of this useful document and wish DGH all the very best for this an all its future endeavours. (G C Chaturvedi) FROM THE DIRECTOR GENERAL ’S DESK Exploration activity, prior to New Exploration and Licensing Policy (NELP), was dominated by public sector firms such as Oil and Natural Gas Corporation Ltd. (ONGC) and Oil India Ltd. (OIL). The discovery of massive Mumbai High fields in 1974 gave a major boost to the sector as these fields still continue to be the mainstay of India’s indigenous production. Realizing that these fields would gradually deplete over time and no major discoveries were being brought into production, the Government introduced the NELP, with the objective of encouraging private sector participation in the oil and gas sector. Increasing gap between demand and supply of oil & gas provides ample investment opportunities in the Indian hydrocarbon industry. In line with the Hydrocarbon Vision 2025, in brief, the main thrust of the activities for the upstream sector would be:- a) Focus on oil security through intensification of, exploration efforts and achievement of 100% coverage of unexplored basins in a time bound manner to enhance domestic availability of oil and gas. b) Secure acreages in identified countries having high attractiveness for ensuring sustainable long term supplies. c) Open up the hydrocarbon market so that there is free and fair competition, between public sector enterprises, private companies and other international players. The Directorate General of Hydrocarbons has been instrumental in achieving a lot during the 19 years of its existence in promoting exploration and sound management of the petroleum & natural gas resources as also non-conventional hydrocarbon energy resources, having regard for the environment, safety, technological and economic aspects. The organisation has lived up to its vision statement “To be an upstream advisory & technical regulatory body of international repute, creating value for society through proliferation & dissemination of E&P knowledge optimal hydrocarbon resources management & environment friendly practices.” The team of highly skilled technical staff has not only carried out to the mandate given by the Government of India, but has contributed immensely in attracting foreign investment in the Exploration & Production sector through the attractive fiscal benefits provided through the New Exploration Licensing Policy (NELP) launched in 1999 and the Coal Bed Methane(CBM) policy in 2001. The award of 249 Blocks under the Nine rounds of NELP and the 33 Blocks awarded under Four round of CBM has been upto 31.03.2012 instrumental in not only accelerating the exploration activities, but also in bringing ‘state of the art’ technology and a healthy competitive atmosphere in this sector. It is this platform that DGH could use to bring the number of E&P players up from the two National Oil Companies, viz. Oil India Limited and Oil & Natural Gas Corporation Ltd to 84 E&P players, comprising of 45 operators and 39 non operators, currently working in India. The Government Policies have yielded desired results which can be seen in the form of 11 discoveries made under NELP in the year 2011-12 and the commercial production of 0.3 MMSCMD of CBM. Today, the country can boast of having E&P operations spread over 19 sedimentary