India’s Hydrocarbon Outlook 2024 1 A Report on Exploration & Production Activities
India’s Hydrocarbon Outlook 2024 2 A Report on Exploration & Production Activities Directorate General of Hydrocarbons was formed through a Government of India resolution dated 08.04.1993 under the administrative control of Ministry of Petroleum & Natural Gas. To promote sound management of the oil and natural gas resources while having a balanced regard for environment, safety, technological and economic aspects of the petroleum activity. Creation Objective Disclaimer Facts and figures given in the report are provisional / indicative and may not be used for any commercial or legal purpose. All rights are reserved. No part of this report may be reproduced or transmitted in any form or by any means without the written permission from Directorate General of Hydrocarbons, Noida, Uttar Pradesh India. The statistics given in the report are collated from different E&P Companies operating in India and available sources in public domain. The correctness of information given herein, is therefore, subjective to that extent. Maps are schematic, if not shown with scale.
India’s Hydrocarbon Outlook 2024 3 A Report on Exploration & Production Activities 2023-24 2023-24
India’s Hydrocarbon Outlook 2024 4 A Report on Exploration & Production Activities Key Highlights of 2023-24 (PROVISIONAL) 29.36 MMT Crude Oil Production 36.44 BCM Natural Gas Production 14.2 MMT Accretion of Oil Reserves 35.6 BCM Accretion of Natural Gas Reserves 67 Active PSCs 188 Active RSCs & 15 Active CBM Blocks RSC: 133 in HELP & 55 in DSF 358 Active Nomination Acreages 351 PML & 7 PEL Acreages 2376 LKM 2D Seismic Data Acquired under Nomination & Contract Regime 15000 SKM 3D Seismic Data Acquired under Nomination & Contract Regime 741 Wells Drilled 132 Exploratory/Appraisal & 609 Development Wells INR 5162 Crore* Profit Petroleum Contribution to Exchequer INR 9775 Crore* Royalty Contribution to Central Exchequer * Provisional MMT- Million Metric Tonnes BCM-Billion Cubic Meter
India’s Hydrocarbon Outlook 2024 5 A Report on Exploration & Production Activities CONTENT 1. A Pioneering Journey: The Story of Oil Exploration in India . ........................................ 12 2. India’s Petroliferous Basins: Prospectivity Insights..........................................................32 3. Exploration and Production Activities .............................................................................102 4. Data Driven Strategies for Indian E&P . .............................................................................112 5. Hydrocarbon Reserves & Resources..................................................................................130 6. New Investment Opportunities in E&P Sector ................................................................142 7. Unconventional Petroleum Resources . ............................................................................ 172 8. Ease of Doing Business - Expediting Clearances for E&P Operations. ........................ 188 9. Hydrocarbon Efficiency & New Energy ........................................................................... 202 Annexures ..................................................................................................................................209
India’s Hydrocarbon Outlook 2024 6 A Report on Exploration & Production Activities
India’s Hydrocarbon Outlook 2024 7 A Report on Exploration & Production Activities
India’s Hydrocarbon Outlook 2024 8 A Report on Exploration & Production Activities
India’s Hydrocarbon Outlook 2024 9 A Report on Exploration & Production Activities
India’s Hydrocarbon Outlook 2024 10 A Report on Exploration & Production Activities
India’s Hydrocarbon Outlook 2024 11 A Report on Exploration & Production Activities
India’s Hydrocarbon Outlook 2024 12 A Report on Exploration & Production Activities A Pioneering Journey: The Story of Oil Exploration in India 1 Early Discoveries and Attempts (1828-1889) The story of India’s oil exploration journey began in the 19th century, specifically in the northeastern corner of the country. Members of the Geological Survey of India (GSI), C.A. Bruce (1828) and H.B. Medicott (1865), stumbled upon oil seepages while searching for coal in Upper Assam. Inspired by Edwin L. Drake’s drilling of the world’s first oil well in Pennsylvania, USA (1859), attempts at oil exploration began in Assam. The initial hand-dug well by Stewart & Company in 1866 near Jeypore proved unsuccessful. However, the following year, Assam’s first mechanically drilled well struck oil at just 118 feet, marking a significant milestone in oil exploration in India. Shifting Landscape and New Players (18891937) The Assam Railways and Trading Company (AR&T Co. Ltd.) took a crucial step in 1889 by digging a well at the Digboi field. This well yielded commercially viable oil The story of India’s oil exploration journey began in the 19th century, specifically in the northeastern corner of the country.
India’s Hydrocarbon Outlook 2024 13 A Report on Exploration & Production Activities production, leading AR&T to acquire petroleum rights in the Makum area. Subsequently, AR&T established the Assam Oil Company (AOC) in 1899 to manage these newfound resources. AOC’s efforts included settingup a small refinery at Margherita. Later in 1901, Asia’s first Oil Refinery was set up at Digboi which continues to operate today, holding the distinction of being the world’s oldest continuously operating refinery. The early 20th century saw the arrival of the UK-based Burma Oil Company (BOC) in Upper Assam (1911). BOC gradually acquired oil business interests in the region, eventually taking over AOC’s holdings by 1921. Meanwhile, the Tata Engineering Company of India also made its mark by drilling wells in Gujarat during the 1930s, leading to small-scale gas production. A pivotal moment arrived in 1937 when BOC, along with British Petroleum and Shell, proposed a geophysical survey of key Indian plains. This proposal was accepted, paving the way for a new approach to oil exploration. The successful seismic survey conducted in Naharkatiya during 1937-39 marked a turning point. This innovative method not only yielded positive results in the form of well NHK-1 but it also fueled renewed enthusiasm for oil exploration across India, leading to future discoveries in Assam and other basins. Dawn of Independence & New Era: Recognizing Oil’s Importance, Building Expertise and Establishing Institutions and Taking Charge (1947-1955) With India’s independence in 1947, the nation’s leadership understood the crucial role oil played in rapid industrialization and national security. The colonial-era policies designed to serve the British Empire’s raw material needs were revamped. The development of a robust domestic petroleum industry became a top priority during the formulation of the 1948 Industrial Policy. By 1948, the Geological Survey of India (GSI) embarked on a geophysical survey in the Cambay area. This period also saw the first oil discovery in independent India, achieved by the Assam Oil Company (AOC) in Naharkatiya (1953) and Moran (1956), both located in Upper Assam. However, foreign companies, primarily BOC, continued to dominate the oil industry for a considerable period after independence. Recognizing the need for domestic expertise, a delegation led by Mr. K.D. Malviya, the Minister of Natural Resources, visited European countries in 1955-56. This visit aimed to study their oil industries and facilitate training for Indian professionals. Additionally, foreign experts were invited to share their knowledge. The erstwhile USSR played a significant role by assisting in the creation of a detailed plan for geological, geophysical surveys, and drilling projects within India’s Second Five-Year Plan (1956-1961). The Birth of ONGC and Early Discoveries (1955-1969) With the aim of intensifying exploration efforts across the country, the Oil and Natural Gas Directorate was established in 1955 as a subordinate office under the Ministry of Natural Resources and Scientific Research. Staffed primarily by geoscientists from the GSI, it soon became evident that a more empowered entity was needed. In early 1956, the Directorate’s status was upgraded to a Commission. The Oil and Natural Gas Commission (ONGC) was further strengthened by an Act of Parliament in October 1959, granting it statutory body status and broader powers while remaining under the Ministry’s purview. ONGC’s mandate was clearly defined: to plan, organize, and execute programs for petroleum resource development, production, and sale of petroleum products. Additionally, it could undertake any other function assigned by the central government. Following a systematic approach, ONGC initiated geophysical surveys in prospective areas identified through global comparisons.
India’s Hydrocarbon Outlook 2024 14 A Report on Exploration & Production Activities Priority was given to regions like the Himalayan foothills and adjoining Ganga plains, Gujarat’s alluvial tracts, Upper Assam, and Bengal’s basins. While exploratory drilling in the Himalayan foothills during 1957 proved unsuccessful, ONGC achieved a significant breakthrough within a year of its formation by discovering oil at Cambay. Subsequent years witnessed a string of discoveries under ONGC’s leadership: Ankleshwar (1960) and Kalol (1961) in Gujarat, Lakwa (1964) and Geleki (1968) in Assam, and a gas discovery (Manhera Tibba) in Rajasthan (1969). Oil India Limited: A Strategic Partnership (1959) In February 1959, Oil India Limited (OIL) was incorporated as a rupee company to expedite exploration and development activities in Assam’s Naharkatiya and Moran fields. Established to take over BOC’s Assam operations, OIL was initially a joint venture with a two-thirds ownership by AOC/BOC and one-third by the Government of India. This partnership evolved into an equal partnership by 1961, marking a significant step towards greater Indian control over its oil resources. Consolidation and Expanding Horizons (1960s-Onwards) India’s quest for offshore oil and gas began in 1962 with a pioneering effort by ONGC. Their initial foray involved an experimental seismic survey in the Gulf of Cambay, a crucial first step in unlocking the potential beneath the ocean floor. This exploration spirit continued in the western offshore region, where detailed seismic surveys led to a significant discovery in 1972-73: a large structure in the Bombay Offshore. Subsequent drilling confirmed the find, resulting in India’s biggest commercial oil discovery – the Bombay High field. The success of Bombay High spurred a wave of exploration activity. Determined to replicate this achievement, both ONGC and OIL expanded their efforts to other offshore areas. This extended not only along the western coast but also to the east, encompassing regions with promising geological formations. These initiatives yielded significant discoveries, including the Bassein and Neelam fields in the western offshore and the PY-3 and Ravva fields in the eastern offshore. While ONGC was initially focused on the western offshore, OIL, traditionally active in Assam, ventured beyond its base in 1978. They embarked on exploration activities in the Orissa offshore and onshore regions, demonstrating a strategic shift towards a broader national exploration strategy. OIL’s ambition further expanded with forays into the Andaman offshore (1979-89) and Rajasthan onshore. By the end of the 1980s, this collective effort by ONGC and OIL had resulted in the drilling of nearly 3,100 wells, a testament to their unwavering commitment to India’s energy security. Beyond oil exploration, ONGC also undertook extensive geoscientific surveys across various Indian states. Their investigations spanned Uttar Pradesh, Bihar, Tamil Nadu, Rajasthan, Jammu & Kashmir, Kutch and Andhra Pradesh. These meticulous surveys, coupled with advanced exploration techniques, bore fruit by the mid1980s. ONGC successfully identified promising prospects in the Cauvery and Krishna Godavari (KG) basins, laying the groundwork for future discoveries. A significant emphasis on offshore exploration was also placed on identifying natural gas reserves as well. This resulted in the discovery of several major gas fields. In 1976, OIL discovered the Kharsang oilfield, which also contained valuable gas reserves. That same year, ONGC made a landmark discovery with the Bassein field off Mumbai’s coast, one of India’s biggest gas finds. This success story continued with further discoveries by ONGC, including the MidTapti, South Tapti, and B-55 gas fields. Despite the impressive discoveries, the late 1970s also exposed limitations in India’s exploration capabilities. The country primarily relied on its National Oil Companies (NOCs)
India’s Hydrocarbon Outlook 2024 15 A Report on Exploration & Production Activities – ONGC and OIL – for exploration activities. However, these companies faced constraints in terms of technology, expertise, and investment capital needed for deeper offshore exploration. Recognizing these limitations, the government took a strategic initiative in 1979. To attract foreign investment, technology and expertise, Government of India, offered 32 exploration blocks (a mix of offshore and onshore) through a bidding process. These bidding rounds, known as Pre-NELP exploration rounds, aimed to foster collaboration between Indian NOCs and international players. While the initial three rounds held between 1980-1986 witnessed limited success, they marked a shift in India’s approach to exploration, paving the way for future collaborations. Government Takeover and Continued Exploration: The government further consolidated its role in the oil and gas sector by taking over Oil India Private Limited in 1981, transforming it into a full-fledged public sector undertaking (PSU). This move aimed to streamline operations and strengthen India’s domestic exploration efforts. Exploration activities continued throughout the 1980s, with both ONGC and OIL making significant discoveries. In 1982, ONGC made a major gas discovery in Gandhar, Cambay basin, Gujarat. By 1986, the KG basin emerged as a major player with several significant discoveries. This period also saw the third round of international bidding for exploration blocks in 1986. While foreign participation remained limited, the government offered participating companies a 40% back-in right during the development phase, incentivizing future collaborations. New Strategies and a Brighter Future for India’s Oil and Gas Exploration Opening Doors for Private Participation (1990s) In a bid to revitalize the petroleum sector, the Government of India (GoI) introduced more attractive investment opportunities in 1994. However, this period also saw disagreements regarding Production Sharing Contracts (PSCs). Undeterred, ONGC ventured into Coal Bed Methane (CBM) exploration in the Damodar Valley and explored Enhanced Oil Recovery (EOR) options in North Gujarat’s heavy oil belt. By 1996, the GoI had conducted five bidding rounds, offering 126 exploration blocks ranging from 1 sq. km. to a massive 50,000 sq. km. This shift towards a more openmarket attracted not only National Oil Companies (NOCs) and Indian private companies but also major international players like Shell, Enron, Aramco, and Occidental. Contracts for exploration activities were awarded to these companies, with Hindustan Oil Exploration Company (HOEC), established in 1991, being one of the first domestic private players to enter the fray. The Birth of DGH and the New Exploration Licensing Policy (NELP) Recognizing the need for an independent regulatory body in the liberalized oil and gas sector, the GoI established the Directorate General of Hydrocarbons (DGH) in 1993. The DGH’s primary responsibility was to oversee oilfield development programs and ensure sound reservoir management practices aligned with national interests. Following the nomination era (pre-1980s), the pre-NELP exploration era (1980-1995), and pre-NELP field rounds (1993-1994), the GoI formulated the New Exploration Licensing Policy (NELP) in 1997. This policy aimed to attract significant investments, cuttingedge technologies and best practices from both domestic and foreign companies. The ultimate goal was to enhance India’s geological understanding of its sedimentary basins and effectively explore its oil and gas resources to meet the nation’s growing energy demands. Implemented in 1999, NELP introduced a competitive bidding system for exploration licenses. NOCs were required to compete with Indian and foreign companies on an equal footing to secure Petroleum Exploration Licenses (PELs). Nine rounds of bidding were
India’s Hydrocarbon Outlook 2024 16 A Report on Exploration & Production Activities conducted under NELP, resulting in the signing of production sharing contracts for 254 exploration blocks. This period also witnessed the commercial opening of two major basins: Rajasthan and Krishna-Godavari. A Shift Towards Revenue Sharing and Renewed Global Interest NELP successfully opened the Indian E&P sector to private and foreign players. However, ongoing investor interactions highlighted the need for further policy reforms, particularly regarding Production Sharing Contracts. Recognizing these concerns, the government made a significant shift towards Revenue Sharing Contracts with the introduction of the Discovered Small Field Policy (DSF, 2015) and the Hydrocarbon Exploration and Licensing Policy (HELP, 2016). Recent policy interventions and project facilitation efforts have generated renewed global interest in the Indian oil and gas industry. The participation of foreign companies in the already held DSF and Open Acreage Licensing Programme (OALP) bidding rounds is a testament to this positive development. The Road Ahead: Big Discoveries and Unveiling Subsurface Potential With a vast scope of activities and the government’s continued focus on development, the Indian oil and gas sector holds immense promise for future discoveries. Recent resource reassessment studies and expert opinions on new plays and deepwater exploration suggest a definitive push towards revealing previously unknown subsurface resources and creating a more realistic picture of India’s hydrocarbon potential. The Indian E&P sector stands poised for a significant leap forward in the years to come. 1.1 Formation of Directorate General of Hydrocarbons (DGH) During early nineties, Ministry of Petroleum and Natural Gas, Government of India had under consideration, the need to have an appropriate agency to regulate and oversee the upstream activities in the petroleum and natural gas sector and advise the Government in these areas. The Dasgupta committee, which had reviewed the management of the Bombay High reservoir, had recommended the creation of an autonomous conservation board to oversee and review that oilfield development which conforms to sound reservoir engineering practices in line with national interests. Subsequently, the Kaul committee, which examined ONGC’s organizational structure, also recommended for establishment of an independent regulatory body called the Directorate General of Hydrocarbons. Moreover, the upstream petroleum sector was largely a monopoly of public sector companies till then and sector at that time was being increasingly opened to new operating companies in the private and joint sectors. Thus, a need was felt to establish an agency that could effectively supervise the activities of all these companies in the national interest. Taking all the above into consideration, Government of India, decided to set up a Directorate General of Hydrocarbons (DGH) under the administrative control of the Ministry of Petroleum and Natural Gas. DGH was set up through a Government Resolution No. O-20013/2/92/ONG-III dated 8th April 1993. DGH-Objective To promote sound management of the Indian Petroleum and Natural Gas resources having a balanced regard for the environment, safety, technological and economic aspects of the petroleum activity.
India’s Hydrocarbon Outlook 2024 17 A Report on Exploration & Production Activities DGH has been entrusted with multifaceted functions and responsibilities which include: a) Providing technical expertise and advice to the Ministry of Petroleum and Natural Gas onpertinent issues relatedtotheexploration and optimal exploitation of hydrocarbons in India and abroad by national oil companies. b) Scrutinizing and assessing the exploration programs of companies holding Petroleum Exploration Licenses (PELs) under the oilfields (Regulation and Development) Act, 1948 and the Petroleum and Natural Gas Rules, 1959, with a view to advising the government on the adequacy of these programs. c) Re-evaluatingtheestimatedanddiscovered hydrocarbon reserves in coordination with the operating companies. d) Advising the government on the allocation of exploration acreages to companies and matters concerning the relinquishment of such acreages. e) Reviewing the development plans proposed by operating companies for commercial discoveries of hydrocarbon reserves, assessing the feasibility of these plans and the proposed exploitation rates, and making recommendations to the government. f) Concurrently reviewing and monitoring the management of petroleum reservoirs by operating companies and advising on any corrective actions required to ensure optimal exploitation of reserves and conservation of petroleum resources. Monitor Monitor Exploration & Development operations/ activities of companies holding acreages Promote Promote investments in Indian E&P sector Regulate Regulate, preserve, upkeep of geological data of the country Advise Advise Government on offering of acreages, exploration strategies and production g) Regulating the storage, maintenance, and preservation of data and samples related to petroleum exploration, drilling, and production, and preparing data packages for the allocation of exploration acreages to companies. h) Undertaking other incidental functions and any other responsibilities as assigned by the government from time to time. 1.2 Governance Advisory Council The Directorate General of Hydrocarbons has an Advisory Council that is appointed by the Government and consists of a Chairman and members who are distinguished individuals in the field of hydrocarbon exploration and production. The Directorate provides support to the Advisory Council and is headed by the Director General, who also serves as the Member Secretary to the Council. Administrative Council The Government of India established an Administrative Council on February 2nd, 2001, through Office Memorandum No. O-32012/1/95- ONG-III dated 2.2.2001, to provide guidance and oversee all administrative aspects of the DGH’s operations. The Administrative Council is responsible for making decisions related to establishment, budgeting, and conducting periodic reviews of the DGH’s functioning. It is chaired by the Secretary (P&NG) and comprises the following members:
India’s Hydrocarbon Outlook 2024 18 A Report on Exploration & Production Activities Name Designation Secretary, MoP&NG Chairman Additional Secretary, MoP&NG Member AS&FA, MoP&NG Member Joint Secretary (Exploration), MoP&NG Member Secretary, OIDB Member Director General, DGH Member-Convener Table 1.1: DGH Administrative Council
India’s Hydrocarbon Outlook 2024 19 A Report on Exploration & Production Activities 1947 2014 1947 2024 1980 1997 2015 Nomination Era Pre-NELP PSCs CBM Contracts/NELP PSCs DSF/HELP RSCs Beginning of de-regulation of producing fields and 28 exploratory blocks o ered to players including private New Domes tic Gas Pricing Guidelines Further liberalization of the sect or • Hydrocarbon Explor ation & Lic ensing Polic y • Discovered Small Field Bid R ound 2016 • Operationalization of NDR • Open Acr eage Lic ensing • Revenue Sharing Model • Pricing Guidelines for di cult gas fields • Single Lic ense for all type of Hydrocarbons • Reassessment of HC R esources, 2017 • NDR launched State Monopoly Public sect or upstream companies • Liberalization of E&P Sect or (1997- 2012) • 9 NELP and 4 CBM rounds. • 254 exploratory and 30 CBM Blocks thr ough competitive bidding and 3 Nomination CBM Blocks Discovered Small Field Polic y • OALP Bid R ound - I, 55 blocks a warded • Discovered Small Field Bid R ound-II • Policy permitting exploration & exploitation of unconventional hydrocarbons • Policy to promote & incentivise enhanced recovery • OALP Bid R ound IV • • • Launch of OALP Bid round-VIII Lanch of OALP Bid round-IX Launch of SCBM-2022 & V • Policy reforms such as exemption from seeking En vironment Clearance for exploratory drilling and no restriction on early monetization of Hydrocarbons Natural Gas marketing reforms - to move towards Gas based economy • OALP Bid Round II & III • Reforms in Exploration Policy • Launch of OALP Bid Round VI & VII • DSF-III Bid Launch of Round • SCB -20 21 Launch of M 2018 1980 -1995 2016-17 19972012 2019 2015 2020-21 2021-22 2022-24
India’s Hydrocarbon Outlook 2024 20 A Report on Exploration & Production Activities 1.3. Acreages under various Regimes PetroleumExploration Licenses (PEL) for domestic exploration & production of crude oil and natural gas were/are being granted under various regimes. 1.3.1 Nomination Basis Till the end of 1970s, Indian E&P industry was dominated by the two National Oil Companies (NOCs) ONGC and OIL to whom PELs were granted on nomination basis. Exploration was primarily confined to onland and shallow offshore areas. 1.3.2 Production Sharing Contracts a. Pre-NELP Exploration Blocks 28 Exploration blocks were awarded to private companies between 1980 and prior to implementation of NELP where ONGC and OIL had the rights for participation in the blocks after hydrocarbon discoveries. Pre-NELP Exploration Blocks Bidding Rounds (28 Blocks) Pre-NELP Discovered Field Rounds (28 Blocks) New Exploration Licensing Policy (NELP) Bidding Rounds (254 Blocks) NOMINATION BASIS PRODUCTION SHARING CONTRACTS REVENUE SHARING CONTRACTS 1947-1990 1990-2010 2016onwards
India’s Hydrocarbon Outlook 2024 21 A Report on Exploration & Production Activities In 1993, GoI offered blocks for geophysical and other surveys to update the information on hydrocarbon potential of India’s unexplored sedimentary basins. Once the surveys on these blocks were completed, they were to be offered in subsequent rounds of exploration. The second speculative survey round was launched in 1994 and the third round in 1995. The third round was called as Joint Venture Speculative Survey Round (JVSSR) with a provision of risk participation/ cost sharing by DGH upto 50%. Government of India has signed 28 contracts for blocks offered under Pre-NELP Exploration regime. b. Pre-NELP Discovered Field or Development Rounds Government offered Petroleum Mining Lease (PML) of small/ medium sized discovered fields (proven reserves were discovered by ONGC and OIL) to the private sector in August 1992. Production Sharing Contracts (PSCs) awarded during 1991-1993 had the distinctive feature of operators as private companies with ONGC/ OIL as having participating interest. These rounds received overwhelming response from various private E&P operators. Government of India has signed 28 contracts (One PSC for Panna Mukta–PM) for 29 discovered fields under PreNELP Discovered (Small and Medium size fields) regime. Table 1.2: Pre-NELP Exploration Blocks Table 1.3: Pre-NELP Discovered Field or Development Rounds Year Exploration Rounds Contracts Signed Description Offshore Onshore Total 1980 First Round PSC Signed with Chevron, USA and 3 wells were drilled without success. Block area was relinquished in 1985 1 - 1 1982 Second Round No PSC signed - - - 1986 Third Round - - - - 1991 Fourth Round 5 PSC signed 2 3 5 1992 First development round - - 1993 Fifth Round Second development round 4 2 6 1993 Sixth Round First speculative survey round 2 3 5 1994 Seventh Round - 2 3 5 1994 Eighth Round Second speculative survey round 1 3 4 1995 Ninth Round JV Exploration program 1 1 2 Total 13 15 28 Month/Year of Award Round Blocks offered in Medium sized Field Round Blocks offered in Small sized Field Round Contracts signed Offshore Onshore Offshore Onshore August, 1992 1 6 6 10 21 18 October, 1993 2 2 6 4 29 10 Total Contracts signed 28
India’s Hydrocarbon Outlook 2024 22 A Report on Exploration & Production Activities c. New Exploration Licensing Policy (NELP) In a bid to revitalize India’s oil and gas exploration, the government implemented the New Exploration & Licensing Policy (NELP) in 1999. This policy introduced a game-changer competitive bidding for exploration blocks. Previously dominated by state-owned National Oil Companies (NOCs) like ONGC and OIL, NELP opened the doors for private and foreign companies to participate. This created a level playing field, fostering healthy competition and public participation in the sector. The impact was far-reaching. NELP not only accelerated the exploration efforts but also attracted a wave of new players. From a mere 35 companies (including PSUs, private and foreign) before NELP, the number ballooned to a whopping 117 after nine rounds of bidding. This surge included a significant rise in private and foreign participation, bringing with them cuttingedge technology and efficient management practices. NELP’s influence extended beyond just numbers. It paved the way for deep-water exploration, previously considered a significant hurdle. These discoveries proved to be a boon for the industry, accelerating exploration, enabling deep-water oil and gas production, and infusing the E&P sector with muchneeded technology and investment. In total, a staggering 1.5 million square kilometers were awarded through bidding, with Production Sharing Contracts (PSCs) signed for a massive 254 exploration blocks across various terrains, including onland, shallow water, and deepwater areas. Round wise details are as follows: So, in summary a total of 310 Production Sharing Contracts were signed, out of which 67 Contracts are operational as on 31st March, 2024. Details of Operational blocks can be found at Annexure. 1.3.3 Revenue Sharing Contracts In recent years, the domestic upstream sector has witnessed substantial policy reforms and progressive decisions. As part of a major Table 1.4: NELP Bid Rounds Round Launch Year Signing Year PSC Signed NELP-I 1999 2000 24 NELP-II 2000 2001 23 NELP-III 2002 2003 23 NELP-IV 2003 2004 20 NELP-V 2005 2005 20 NELP-VI 2006 2007 52 NELP-VII 2007 2008 41 NELP-VIII 2009 2010 32 NELP-IX 2010 2012 19 initiative to boost the upstream hydrocarbon sector, E&P industry has transitioned from Production Sharing Contracts (PSCs) to Revenue Sharing Contracts (RSCs). This strategic shift aims to achieve greater transparency, operational flexibility, risk-sharing, and increased investor appeal. RSCs simplify revenue sharing, reduce bureaucratic complexities, and create a conducive environment for oil and gas
India’s Hydrocarbon Outlook 2024 23 A Report on Exploration & Production Activities b. Hydrocarbon Exploration and Licensing Policy (HELP) In a landmark move to revitalize India’s oil and gas exploration sector, the government introduced the Hydrocarbon Exploration Licensing Policy (HELP) on March 30th, 2016. This policy marked a significant shift, transitioning from a Production Sharing mechanism to a Revenue Sharing model. This streamlined approach reduces government intervention in day-to-day operations, fostering a more business-friendly environment (Ease of Table 1.5: DSF Round wise Award Round Launch Year Signing Year No. of Contract Areas Awarded DSF-I 2016 2017 30 DSF-II 2018 2019 24 DSF-III 2021 2022 31 exploration. The objective is to enhance efficiency, attract investment, and foster a competitive landscape within India’s energy industry. Accordingly, two major policies formulated to implement the Revenue Sharing Mechanism are : a. Discovered Small Field Policy (DSF) In 2015, the Indian government introduced a significant policy shift for the oil and gas sector with the Discovered Small Field (DSF) policy. This policy aims to unlock the potential of previously discovered, but undeveloped, small hydrocarbon reserves. DSF offers attractive fiscal terms to investors and companies, including the elimination of oil cess on crude oil production, reduced royalty rates, and freedom in pricing and marketing of oil and gas. Additionally, there’s no upfront signature bonus or carried interest for National Oil Companies (NOCs). This translates to a more streamlined and commercially viable development process for these fields. The DSF policy operates under a revenue-sharing mechanism, granting contractors greater autonomy with minimal government oversight. Three successful bidding rounds have been conducted so far, awarding a total of 85 Contract Areas. As on 31st March, 2024, 55 Contract Areas are active. Introduction of DSF has demonstrably revitalized the sector by attracting over new E&P players, bringing fresh investment and expertise to Indian exploration and production (E&P) activities. Contract Areas awarded round wise are as below: Further details about DSF can be found at Chapter-6. Doing Business). A key component of HELP is the Open Acreage Licensing (OAL) mechanism. This empowers exploration companies to select their own blocks, eliminating the need to wait for government-led bidding rounds. The first bid round under OAL was launched in January 2018, and since then, eight successful rounds have been conducted within a six-year period. These eight rounds have resulted in the awarding of a staggering 144 exploration blocks, encompassing a vast area of 2,42,057 sq. km., providing a significant boost to E&P activities in India.
India’s Hydrocarbon Outlook 2024 24 A Report on Exploration & Production Activities OALP Bid Round Launch Year Blocks Awarded OALP-I 19-01-2018 55 OALP-II 07-01-2019 14 OALP-III 10-02-2019 18 OALP-IV 27-08-2019 7 OALP-V 14-01-2020 11 OALP-VI 06-08-2021 21 OALP-VII 16-12-2021 8 OALP-VIII 07-07-2022 10 Total - 144 Further details about HELP can be found in Chapter-6. Investment made under contract Regime (PSC & RSC) in USD Million (As of 31-03-2024) India, a country with a booming economy and ever-increasing energy needs, prioritizes investment in hydrocarbon Exploration and Development (E&P). These investments are vital for guaranteeing the nation’s energy security and fulfilling its future fuel demands. The government has introduced policy reforms The domestic crude oil/gas production in the country consists of oil/gas production from Nomination Blocks/ Fields under ONGC and OIL The discovered fields and producing Pre-NELP, NELP blocks under the Production Sharing Contract (PSC) regime The contract areas (CAs) Awarded under DSF (Revenue sharing contracts) to attract investments and make the sector more appealing. This includes opening up vast unexplored sedimentary basins and offering globally competitive terms to investors. As a result, E&P companies are participating in exploration and development activities, infusing much-needed capital into the sector. The investment made under Contract Regime (PSC+RSC) is as below: Table 1.6: OALP Bid Round details
India’s Hydrocarbon Outlook 2024 25 A Report on Exploration & Production Activities Bidding Round Contract Signing Year Committed Investment Actual Investment upto 2023-24* Type Value Exploration Development Total Pre-NELP Blocks 1985-1995 Exploration NA 2522 8251 10773 Pre-NELP Fields 1992-1993 Development NA 596 5884 6481 Pre-NELP Total NA 3118 14135 17253 NELP-I 2000 Exploration 1082 5189 16327 21516 NELP-II 2001 Exploration 775 910 34 944 NELP-III 2003 Exploration 978 3401 2094 5495 NELP-IV 2004 Exploration 1135 2100 37 2137 NELP-V 2005 Exploration 3570 1029 111 1140 NELP-VI 2007 Exploration 1505 2842 30 2872 NELP-VII 2008 Exploration 1102 993 4 997 NELP-VIII 2010 Exploration 734 849 0 849 NELP-IX 2012 Exploration 847 286 2 288 NELP Total 11728 17600 18638 36238 DSF-I 2017 Development 3000 37 114 151 DSF-II 2019 Development 33 49 81 DSF-III 2022 Development - 29 29 DSF Total* 3000 69 192 261 OALP - I 2018 Exploration 815 444 444 OALP -II 2019 Exploration 452 139 139 OALP - III 2019 Exploration 709 370 370 OALP - IV 2020 Exploration 341 95 95 OALP - V 2020 Exploration 62 150 150 OALP-VI 2022 Exploration 600 154 154 OALP-VII 2022 Exploration 158 16 16 OALP-VIII 2024 Exploration 233 0.19 0.19 OALP Total 3370 1369 0 1369 Grand Total 22156 32965 55122 Table 1.7: Cumulative Investment made in Contract Regime in USD Million (As of 31st March, 2024) Note 1: Actual Investment upto 2023-24 is a provisional and are subject to examination and adoption of Audited Accounts. Note 2: DSF Committed Investment is based on Submitted FDP Note 3: Summay not match because of round-off
India’s Hydrocarbon Outlook 2024 26 A Report on Exploration & Production Activities Initiatives for Ease of Doing Business The Government has prioritized the ease of doing business in the Exploration and Production (E&P) sector, with the goal of boosting investment and production. The simplification of procedures and processes results in a more transparent and efficient system, which encourages investment in the sector. In the era of digital revolution, the government is striving to enhance process efficiency and improve the delivery of government services. A range of measures have been implemented to simplify and digitize the processes throughout the E&P sector’s value chain. DGH, under the Ministry of Petroleum and Natural Gas (MoPNG), has taken numerous steps to facilitate and streamline the process of granting Licenses and Clearances. Moreover, the government has introduced several systematic reforms in the sector, including the ‘Self-Certification’. This allows for major processes/approvals to be granted swiftly based on self-certification. In line with this vision, the Government, through DGH, has launched a variety of applications and systems. These tools assist operators with smooth operations, transparent contract management, expedited approval & clearance grants, and engagement with potential investors. 1. Production Sharing Contract Management System (PSCMS): Launched on 1st April 2019, PSCMS is a workflow-based system with 61 PSC processes requests for approval to clear proposals and manage contracts contract management for PSC Blocks/Fields. 2. PSC Self-certification (Simplification of procedures and processes under Production Sharing Contract of Pre-NELP/ NELP Blocks) Under the Self-Certification, the contractual processes have been placed online and the contractors are required to submit proposals on a self-certification basis in a standardized format. 3. Petroleum Exploration Lease/Petroleum Mining Lease Data Management System: Launched on 5th November 2019, PEL/ PML application is an online application for operators to apply for PEL/PML under various contractual regimes (Nomination/ PSC/RSC/CBM). 4. Production Database Management System (PDMS): An online Production Database Management System (PDMS) has been implemented wherein all oil and gas production data on daily basis is uploaded by operators for Nomination and PSC regime. The portal enables to view, monitor and analyze block, field and asset wise production. 5. Revenue Management System (RMS): The system aims to collate the details of Revenue generated in respect of sale of oil, gas and condensates produced in the block. This also facilitates monitoring of Royalty (currently functional for offshore blocks) & Profit Petroleum (PP). Integration of RMS Application with Bharatkosh has gone live from 01.04.2021. 6. Accounts Management System: The system captures electronically and collates the details of audited accounts submitted to DGH. 7. Non-Tax Remittance Management System: The system is aimed to overcome the reconciliation the system is aimed to collate Details of remittance/payment made (towards Non-Tax Revenue) to Pay & Account office of MOP&NG/State Government under PSC/CBM contracts under the following heads and interest thereon. 8. EOI Submission portal for OALP: EOI submission portal was launched in 2016 for the operators to submit Expression of Interest (EOI) for the identified blocks under OALP bid rounds.
India’s Hydrocarbon Outlook 2024 27 A Report on Exploration & Production Activities 9. E-bidding portal: DSF/OALP/SCBM Bids were invited through online e-bidding portal. 10. Site Restoration Fund Management portal: DGH has developed an online portal to streamline the operationalization of Site Restoration Fund (SRF) Scheme 1999. 11. Initiatives for facilitating clearances/ approvals and enhanced coordination: a. Empowered Coordination Committee (ECC): This committee has been constituted under the chairmanship of Cabinet Secretary to discuss the defense, environment, license etc. related issues pertaining to the Hydrocarbon sector. b. Creation of ‘Hydrocarbon Clearance Cell’ (HCC): A dedicated ‘Hydrocarbon Clearance Cell’ has been institutionalized within DGH. The cell liaises with Central/State Government authorities for expeditious grant of clearances/approvals. c. Creation of North-East Coordination Committee (NECC): ECC under HCC of DGH created in September 2021 and 18 Coordinators are placed with various Departments of State Govts of Assam, Arunachal Pradesh and Tripura for ease of processing Clearance and Approval proposals under various environmental regulations as well as expediting the other issues related to Oil & Gas E&P activities requires administrative/ regulatory supports from the State Govt. d. Urja Pragati Portal (Upstream Response by Joint Action for proactive Governance and Timely Implementation): To facilitate E&P operators and monitor the approvals/ clearances, URJA PRAGATI web-based interactive portal has been launched recently by DGH to prioritize and flag the long pending issues concerning the upstream hydrocarbon sector involving various stakeholders such as Operators, Central Ministries and State Governments. The issues to be dealt through this portal covers clearances related to PEL (Petroleum Exploration License), PML (Petroleum Mining Lease), FC (Forest Clerance), WLC (Wildlife Clearance), CTE (Consent To Establish)/CTO (Conest To Operate), ESZ (Eco Sensitive Zone) and CRZ (Coastal Regulation Zone). e. Upstream India Portal: The ‘Upstream India’ portal was launched to provide support to E&P operators. It offers services such as sharing of facilities and infrastructure available at DGH, creation of a Knowledge Sharing Platform, and organization of regular workshops, seminars, conferences, training sessions, and discussions on the latest government policies, technologies, and usage of inventories. f. Urja Suraksha Samanvay: GIS based monitoring and decision support system for swift information exchange. g. PM Gatishakti Portal: Bringing all the available information of the upstream sector onto a single platform.
India’s Hydrocarbon Outlook 2024 28 A Report on Exploration & Production Activities KEY MILESTONES OF INDIAN E&P SECTOR • Struck Oil in Jeypore 1867 1882 • Assam Railway Trading Company set up to explore oil 1890 • First Commercial 1890 Discovery at Digboi, Assam 1891 • Assam Oil syndicate set up a refinery at Margherita, Assam 1895 • Assam Oil Company to take over petroleum interest from Assam Oil Syndicate 1901 • First Oil Refinery Set up at Digboi, Assam 1922 • Burmah Oil Company bought shares from ARTC, and appointed commercial and technical managers from AOC 1930 • Crude Oil Production rose upto 2,50,000 tonnes per annum and exploration activities continued in Assam-Arakan range
India’s Hydrocarbon Outlook 2024 29 A Report on Exploration & Production Activities • GoI formulated CBM Policy • GoI approved NELP • NELP-I launched offering 48 blocks 1997-1999 1987-1993 • Ravva Oil Field discovered in KG Offshore • DGH Established • ONGC is re-organised as a corporation • Oil India Ltd became wholly owned GoI Enterprise • Discovery of Gandhar Oil field, Gujarat • GoI decision for participation of private companies in development of discovered oil and gas fields • Neelam Oil Field, Mumbai • Bombay High discovered • Discoveries of Bassein Gas Field, Mumbai Offshore, Kharsang oil field, Arunachal Pradesh • Discovery of Heera oil field, Mumbai Offshore 1953 • Discovery of Naharkatia Oil Field, Assam 1956 • Oil and Natural Gas Commission established • Discovery of oil in Moran, Assam • ONGC became statutory body • Discovery of Ankleshwar oil field, Gujarat • Oil India Pvt Ltd incorporated as 50% JV between GoI and BOC 1948 • Industrial Policy Resolution passed • Oil fields Regulation and Development) Act, 1948 came into existence 1959-1961 1974-1977 1981-1986
India’s Hydrocarbon Outlook 2024 30 A Report on Exploration & Production Activities • NELP-II launched with 25 blocks on offer • First round of CBM bidding • NELP-III launched offering 27 blocks 2000-2002 2006 • Mangala Oil Field discovered in Rajasthan • Third Round of CBM bidding • NELP-V launched offering 20 blocks 2008- 2009 • NELP-VI launched offering 55 blocks • MA Oil Field, KG Offshore Discovered 2007 • NELP-VIII launched with 57 blocks on offer • CBM extension policy introduced • Discovery of D1 & D3 Gas Fields, KG offshore 2014-2015 • Domestic Natural Gas Pricing guidelines • Approval and launch of Hydrocarbon • Resource Reassessment Study • Discovered Small Field Policy 2003 • Second Round of CBM blocks bidding • NELP-IV launched 2004 2005 2010 • Fourth round of CBM bidding • NELP-VIII launched with 70 blocks on offer • NELP-IX launched with 34 blocks on offer
India’s Hydrocarbon Outlook 2024 31 A Report on Exploration & Production Activities 2023-2024 First Oil Production from Challenging Deep Water Block KG-DWN-98/2 (Cluster-II) in KG-Basin • Launch of OALP Bid Round - VIII • Launch of OALP Bid Round - IX • Launch of SCBM-2022 • Launch of OALP Bid Round VI & VII • Launch of DSF-III Bid Round • Launch of SCBM-2021 2017 • Launch of NDR • Launch of HELP through OALP • Early monetization of CBM • Extension policy for Pre-NELP Contracts 2018 • Launch of OALP Bid Round-I, DSF Bid Round-II • Enhanced Recovery Policy • Launch of OALP Bid Round II, III, IV & V • Self-Certification of PSC processes • Natural Gas Marketing Reforms, 2020 2016 • Approval of Hydrocarbon Exploration Licensing Policy (HELP) • Marketing and Pricing freedom for new gas production from Deepwater, Ultra Deepwater and High Pressure- High Temperature Areas 2019-2020 2020-2021 2022 2023
India’s Hydrocarbon Outlook 2024 32 A Report on Exploration & Production Activities India’s Petroliferous Basins: Prospectivity Insights 2 India has thick sedimentary rocks with proven petroleum systems. The country is one of the 171 petroleum provinces independently mapped by U.S. Geological Survey (USGS) in 2012. The basin area occupies 50% of country’s onland area and 73% of country’s offshore within Exclusive Economic Zone (EEZ). Source: DGH Internal Sedimentary Basins: Geographical Area
India’s Hydrocarbon Outlook 2024 33 A Report on Exploration & Production Activities With 26 sedimentary basins mapped and assessed, India has discovered petroleum of 12.0 billion ton oil equivalent and undiscovered potential of 12.9 billion ton oil equivalent, which is duly weighed with geologic risks. While this is an estimate of conventional petroleum occurrence, unconventional petroleum exists in form of coal seam gas, shale plays, tight plays, basement fractures and gas hydrate. Sedimentary basins are divided into three categoriesmapping conventional resources and following the rationale of Petroleum Resources Management System (PRMS), a global standard for reporting petroleum resources and reserves based on techno-commercial merits. E C D B A I H G F RAJASTHAN LADAKH GUJARAT ODISHA MAHARASHTRA MADHYA PRADESH BIHAR KARNATAKA UTTAR PRADESH ASSAM TAMIL NADU TELANGANA CHHATTISGARH ANDHRA PRADESH PUNJAB JHARKHAND WEST BENGAL HARYANA UTTARAKHAND ARUNACHAL PRADESH MANIPUR MEGHALAYA KERALA HIMACHAL PRADESH JAMMU AND KASHMIR MIZORAM NAGALAND TRIPURA SIKKIM GOA DELHI ANDAMAN & NICOBAR LAKSHADWEEP 0 250 500 750 1,000 125 Km INDIAN SEDIMENTARY BASINS CATEGORY-I (Proven Commercial Productivity) CATEGORY-II (Identified Prospectivity) CATEGORY-III (Prospective Basins) Pre-Cambrian Basement Tectonic Sediments BAY OF BENGAL INDIAN OCEAN 1 KRISHNA GODAVARI (KG) 8 SAURASHTRA 13 KERALA KONKAN 20 NARMADA 2 MUMBAI OFFSHORE 9 KUTCH 14 BENGAL-PURNEA 21 SPITI ZANSKAR 3 ASSAMSHELF 10 VINDHYAN 15 GANGA-PUNJAB 22 DECCAN SYNECLISE 4 RAJASTHAN BASIN 11 MAHANADI 16 PRANHITA GODAVARI (PG) 23 CUDDAPAH 5 CAUVERY 12 ANDAAMAN 17 SATPURA-SOUTH REWA-DAMODAR 24 KAREWA 6 ASSAMARAKAN FOLD BELT 18 HIMALAYAN FORELAND 25 BHIMA-KALADGI 7 CAMBAY 19 CHHATTISGARH 26 BASTAR CATEGORY-I CATEGORY-II CATEGORY-III EEZ BOUNDARY EEZ EEZ EEZ 1 2 3 6 4 7 5 8 9 22 10 11 14 12 13 16 15 17 24 21 18 26 19 25 23 20 A R A B I A N S E A Source: DGH Internal
India’s Hydrocarbon Outlook 2024 34 A Report on Exploration & Production Activities The category of basins is subject to upgrade upon change in resource maturity at basin scale. Category III basin may be upgraded to Category II in case, there is a discovery or Category II to I, if discoveries are commercially produced. Since category is linked to resource maturity, basin grouping will be meant There are 9 offshore basins having an area of 1.73 million sq km, out of which 0.41 million sq km is located in shallow water up to bathymetry differently to conventional and unconventional resources. For example, Satpura-South RewaDamodar basin is a Cat III basin for conventional resources, which are yet-to-be discovered, but it will be deemed Cat I basin for unconventional (Coal Bed Methane) as it is commercially producing CBM gas. INDIA’S OFFSHORE BASINS of 400m and 1.32 million sq km in deepwater. The water depth beyond 1,500m is recognized as ultra-deepwater. Source: DGH Internal
India’s Hydrocarbon Outlook 2024 35 A Report on Exploration & Production Activities Until September 2022, offshore area was restricted for E&P operation with “No-Go” overlap of 1,366,708 sq km (57% of total offshore). In a landmark initiative, GoI, in a coordinated manner through ministerial participation had reduced the “No-Go” area to 24,832 sq km, opening up 99% of 2.36 million sq km of India’s EEZ. As an immediate follow-up, large size blocks were offered by suitable amendment to Model Revenue Sharing Contract (MRSC). Further to this, many Undefined Basin Areas (UBAs) in Mahanadi and Andaman basins were studied using new datasets and found extended from contiguous basin areas by geological analogy. Such areas, considered at that time as UBAs were duly approved for bidding, subject to future review during basin re-mapping under the next Hydrocarbon Resource Assessment Study (HRAS). Unlike the provision required for onland acreage, statutory clearances for offshore are directly administered by Union Government, as a result, such approvals are simpler and faster OFFSHORE HYDROCARBON POTENTIAL: for offshore proposals. In terms of availability of datasets, offshore deepwater is 100% appraised, while shallow water is 90%, implying a scope for holistic assessment of subsurface geology. With 6.9 billion ton oil equivalent of discovered potential (58% of country’s total estimate of 12.0 billion ton oil equivalent), the exploration activity into deepwater is still largely subdued. Given the fact that largest deepwater gas deposit, located in deepwater channels of Krishna Godavari basin has produced ~3.0 trillion cubic feet of natural gas, there are vast areas now open for intense exploration. In amajor move, National Data Repository(NDR) sold a significant volume of geoscientific datasets (both East and West coast basins) as per NDR data policy to two global service providers, whereby NDR data were valueadded for objective sale to interested parties. This has opened up excellent opportunities to use improvised datasets in the subsurface assessment workflows, much needed for wellinformed bidding of exploration blocks. Source: DGH Internal GOVERNMENT’S INITIATIVES FOR OFFSHORE EXPLORATION:
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