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Is this achievable? Yes it is - so far only 73 billion barrels of oil and oil equivalent gas
could be established through exploration, out of 205 billion barrels of prognosticated
hydrocarbon resources. Thus, about 133 billion barrels of prognosticated resources
remain to be unlocked through exploration. As you will appreciate, this will be possible
only by speedy implementation of new exploration programmes across the country.
To this end, the Ministry of Petroleum & Natural Gas recently constituted a Committee,
under the Chairmanship of Dr. Vijay Kelkar, to prepare a roadmap for enhancing
domestic production of oil & gas and sustainable reduction in import dependency by
2030. In addition, the committee will also examine:
1.
Institutional mechanism for appraisal of the Indian sedimentary basins to the
extent of 75 per cent by 2015 and 100 per cent by 2025
2.
Utilization of Oil Industry Development Board cess and other innovative
resource mobilization approaches for appraising the unexplored/partly
explored acreages
3.
Development and promotion of indigenous service industry in E&P sector
4.
Review of institutional mechanism to acquire acreages abroad for exploration
and production as well as pursuing diplomatic and political initiatives for
import of gas from neighbouring and other countries with emphasis on
transnational gas pipelines
5.
Steps to be taken for ensuring adequacy of finances for R & D required for
building knowledge infrastructure in E & P activities
6.
Steps to be taken for development of gas transportation infrastructure for
establishing countrywide marketplace
The Committee will submit its report in six months.
Even as we are trying to enhance domestic production through numerous policy
measures, we are working to create enabling and conducive environment to promote
investments, by making fiscal terms that are simple to administer.
Towards this direction, last year, under the direction of Honble Prime Minister of India, a
committee was constituted under the Chairmanship of Dr. C Rangarajan to look into the
mechanism of Production Sharing Contracts.
The Committee Report is under active consideration and very soon the government will
work towards implementing the recommendations. This will improve the overall
governance mechanism of the upstream oil & gas industry and will act as a confidence
building measure to attract the much needed risk capital and newer technologies.
Way back in 1999, GOI adopted NELP and we have successfully held 9 bid rounds. The
NELP regime has increased the E&P activities in the nation. Prior to adoption of the
NELP, only 11 per cent of Indian sedimentary basins were under exploration. Since the
operationalization of the NELP in 1999, the government has awarded 47.3 per cent of
Indian sedimentary basin area for exploration. Similarly, 100% Foreign Direct Investment
(FDI) has been permitted in exploration and production of oil and gas. All these policy
measures have resulted in significant investments in the E&P sector.
The domestic Crude oil production is expected to reach 42.31 MMT during 2012-13,
which would be 11.08% higher than previous year. The increase in production is mainly
on account of higher crude oil production from Barmer fields, Rajasthan where current
oil production is 1,70,000 bbl/day. The production of natural gas during 2012-13 is
expected to be 117.8 MMSCMD which is about 9% lower than the previous year mainly
due to lower production from KG D6 deepwater block.
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I may mention that during visit of the Prime Minister of UK on 01-02-2013, BP Group
and RIL announced combined investments in excess of US $5 billion for the development
of KG D6 block over the next 3-5 years.
Co-Existence of National and Energy Security Operations
As you all are aware, that there were numerous oil & gas blocks where exploration and
development activities were not permitted due to restrictions from the MoD.
Ministry of Petroleum & Natural Gas ensured that the very first meeting of the Cabinet
Committee on Investments (CCI) a committee to fast-track large, delayed projects
consider oil & gas projects. We have had series of meetings between the Ministry and the
MoD, and we are very close to resolution based on the principle of co- existence of both
National and Energy Security requirements. In fact the cabinet committee has already
given clearance for five out 7 exploration blocks in the No Go area. Due to these
clearances, the investment already made to the extent of $ 10.71 Billion will be put to use
and further investment to the extent of $ 0.6 billion is envisaged in the next few years.
Further, after the discovery in these blocks much higher investment is likely to be made.
Another 31 Blocks are also being considered for approval very soon.
Clearance from the CCI will enable these blocks to conduct exploration and development
activities and thereby further enhance our attempts to enhance domestic crude oil
production.
It is well accepted globally that natural gas is cheaper, cleaner and in abundance. Thus,
GOI will make all efforts to develop our nation as a gas-based economy. This will help to
reduce our overall import bill and also help to reduce oil marketing companies financial
burden given the substitution effect.
Currently, natural gas share in our nations primary energy basket is significantly below
the world average. We shall make all efforts to augment our domestic natural gas
supplies.
There are examples to show that how through extensive development of pipeline
infrastructure, LNG regasification terminals, a state can have a gas-based development
model and as a result increase the share of natural gas in the primary energy basket.
Ushering Shale Gas Revolution
Much like the United States of America, Shale Gas can emerge as an important new
source of energy for our nation. India has several shale formations which seem to hold
shale gas. The shale gas formations are spread over several sedimentary basins such as
Cambay, Gondwana, Krishna-Godawari on-land, and Cauvery. To explore and exploit the
shale formations, the DGH has initiated steps. It will identify prospective areas for shale
gas exploration. Very soon, we will finalize the Shale Gas policy, which will provide
necessary impetus to the exploration activities and eventually pave way for increased
domestic supplies of natural gas.
Coal Bed Methane
There are significant prospects for exploration of CBM as India is having the fourth
largest proven coal reserves in the world. We are also pursuing gas production from the
CBM Blocks. Under the CBM policy, 33 exploration blocks have been awarded. The
estimated CBM resources in the country are about 92 trillion cubic feet (TCF), out of
which less than 10 percent has so far been established. Commercial production of CBM
in India has now become a reality with current CBM gas production of about 0.30
MMSCMD. A revised CBM Policy is under active consideration of the Government to
enable expeditious commencement of production in case of captive blocks.
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have not increased the price of PDS Kerosene & Domestic LPG since 25th June 2011.
Subsidized LPG for cooking purposes has been extended to non-domestic exempted LPG
customers.
The OMC are at present incurring under-recovery at the rate of Rs. 8.64 per litre for
Diesel, Rs. 33.43 per litre for Kerosene and Rs. 439 per cylinder for Domestic LPG and
their daily under-recovery is Rs 423 crore. Out of the total projected under recovery of Rs
1,61,343 crore of the Public Sector Oil Marketing Companies (OMCs) on sale of sensitive
petroleum products during 2012-13, under recovery on sale of diesel alone accounts for
57 per cent.
Direct Benefit Transfer to LPG (DBTL):
Direct cash transfer of subsidy to Domestic LPG and PDS Kerosene consumers will be
introduced in 2013-14. Direct Subsidy Transfer is proposed to be implemented in three
phases. In Phase-I, Direct Subsidy Transfer will be implemented in 51 districts identified
by Planning Commission where substantial Aadhaar penetration has already been
achieved. In Phase-II, entire 18 states shall be covered where UIDAI is currently enrolling
customers. In Phase-III, the coverage will be for 17 states where National Population
Registry under Home Ministry is conducting enrolment.
LPG Transparency Portal
To empower the LPG consumer, the Government of India has launched new initiatives,
Project Lakshya, in the LPG business focusing on greater customer empowerment,
better subsidy administration, enhanced transparency in the distribution chain; along
with a slew of IT-based customer service initiatives. Recently, the Ministry launched new
IT / web enabled initiatives to make distribution of domestic LPG more customer friendly
and enhance transparency. With the launch of Transparency portal, customers have
already been empowered to know their consumption and there also are provisions to flag
anomalies in the distribution of LPG cylinders.
Conclusion
Our Ministry will continue to strive towards evolving effective policy measures to enhance
energy security to the nation. In this regard, the media has a vital role in informing the
public on the challenges faced by the oil and gas sector and the significance of the
measures taken by the Government to ensure growth of the Oil Sector.
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