Over the last two decades, India has initiated a series of economic and industrial reforms which have moved the country towards a market-based economy with an accelerated GDP growth rate. The country’s improved GDP, now averaging 7-8%, has resulted in a large increase in energy demand and today India is the world’s fifth, largest energy user. Demand for oil and gas continues to grow rapidly; however, only a small percentage of this increase is being met through increases in domestic production. Oil accounts for about 30% of India’s total energy consumption, with petroleum reserves total 5.8 bbo (BP Statistical Review of World Energy, 2010). India’s average oil production in 2009 was 754 mbo/d. Year-end 2009 gas reserves totaled 1.1 bcm, with 2009 production of 39.3 bcm. Most domestic production comes from the offshore western coast of India (Mumbai High), but major discoveries in the KG Basin off the eastern coast appear to hold significant reserves and substantial future potential. India's per capita consumption of energy is extremely low as compared to other countries and the demand for energy is expected to increase for the foreseeable future.
A history of India’s oil and gas production is shown in the accompanying graphs.
India - East West Petroleum
India’s petroleum sector is dominated by state-controlled enterprises, including ONGC, OIL and GAIL. ONGC is the largest upstream oil company, accounting for three-quarters of the country’s oil output. The Indian government has introduced policies aimed at increasing domestic oil production, oil and gas exploration activity and foreign participation. As part of this effort, the Ministry initiated the New Exploration Licensing Policy (NELP) in 1998, which permitted foreign companies to competitively bid and hold 100% positions in oil and gas projects. Since NELP 1, a total of 9 NELP rounds have been held.
The government has also moved ahead with unconventional coalbed methane (CBM) NELP bid rounds. A total of four CBM rounds have been held to date, with moderate competition and some success achieved (6 Tcf reserves reported to date). India is also expected to hold the first shale bid round in 2012. Several basins have the potential to provide significant increases in oil and gas production from shales the medium to longer term.
India has two LNG terminals, both located in Gujarat, one by Petronet at Dahej and the other a Shell – Total JV at Hazira. A number of other terminals are planned. Current total LNG receiving capacity is approximately 13.6 mmtpa.
Until recently, Gas transmission in India has been dominated by GAIL, but Reliance Industries and others are now expending into this sector. India is planning to expand its gas pipeline network by 40% over the next two to three years. The expansion of the network will increase the number of cities with pipeline gas access and should support new gas exploration in more remote regions.
According to the government, massive energy investment will be required to achieve the country’s targeted economic expansion, with growth in primary energy supply of up to four times current consumption, accompanied by a 6-7 fold increase in electricity generating capacity. Expansion of petroleum, coal, hydro and nuclear sources of energy are required.
India - East West PetroleumASSAM-ARAKAN Basin – Block AA-ONN-2010/2
On March 28th, 2011 East West Petroleum participated in the New Exploration Licensing Policy (NELP IX) competitive bid round in India, successfully winning Block AA ONN 2010/2 with the following partners (participation interests shown)
Oil India Ltd (OIL) - 40% and operator
Oil and Natural Gas Corporation of India (ONGC) - 30%
Gas Authority of India Ltd (GAIL) - 20%
East West Petroleum - 10%
Final Government approval of the concession agreement is expected during the second quarter of 2011.
The Block covers approximately 400 sq. km. and lies within the Karbi Anglong District of the Assam-Arakan basin, a proven petroliferous region which covers more than 116,000 square km in north-eastern India.
Exploration operations will be carried out over a period of five years, with 3D seismic to be acquired initially in the first two years, followed by the drilling of two exploratory wells. Additional extensions are possible beyond the initial 5 year term.
Industry has been active in the region with over 60,000 km of 2D Seismic and more than 7,600 square kilometres of 3D seismic acquired. The acreage lies on trend with a number of oil fields that have been discovered along the Naga and Disang thrust zone In fact, over 1000 wells have been drilled with 118 oil and gas fields found to date. Current production for the area is estimated at 95,000 BOEPD, with original oil in place estimated at 36 billion barrels.
A further 3D seismic program is required to provide better subsurface imaging for high-grading drilling locations. Source rocks and reservoir rocks are generally found in the Paleocene-aged clastic section. Most accumulations have been found in structural traps but stratigraphic traps are possible. East West Petroleum feels that their involvement in this project is a testament to the unconventional expertise that the management team led by Dr. Marc Bustin will bring to this partnership with OIL, ONGC, and GAIL.
India - East West Petroleum