ENERGY | $25bn Dollars Investment : India's Strategy for Oil and Gas Security
IndraStra Open Journal Systems
IndraStra Global

ENERGY | $25bn Dollars Investment : India's Strategy for Oil and Gas Security

By Various Sources

On March 14, 2016 - The Minister of State (I/C) for Petroleum & Natural Gas Mr. Dharmendra Pradhan informed the Lok Sabha (Lower House of Indian Parliament) in a written reply that the targets as fixed by upstream Central Public Sector Enterprises (CPSEs) of oil and gas sector and actual achievements in production of crude oil and natural gas during the Twelfth Plan period is as under:
Target Production India Oil and Gas

The lower production of crude oil in the country is attributed to various reasons, including inter-alia, decline in production from the major producing fields of the country, particularly in Western offshore and onshore fields in Gujarat and North-Eastern region, which are quite old and aging, no major discoveries made in the recent past and challenges experienced in development of marginal and deep water fields in transfer of technology, logistics, isolated structures and viability thereof. Some of the important factors responsible for shortfall in production of natural gas are sharp decline in production in KG deep-water block operated by RIL, natural decline in major gas producing fields like Bassein and M&S Tapti, delay in commencement of production from eastern offshore fields, fire incident in Tatipaka gas pipeline of GAIL and lower gas upliftment by consumers, particularly in Tripura, Assam and Cauvery basin.   

Production targets are being regularly monitored, both by Government and CPSEs. Some of the important measures taken by the CPSEs to achieve the targets fixed for the production of crude oil and natural gas include inter-alia, implementation of various enhanced oil recovery / improved oil recovery schemes, field re-development projects, development of marginal fields on cluster concept, monetization of small and marginal discoveries in onshore areas through service contracts or outsourcing, expeditious development of new discoveries, developing new and marginal fields on fast track, use of modern technology for maximizing production from mature fields and enhancing well productivity, prioritization of wells with high potential and drilling campaigns for non-associated gas.

Dharmendra Pradhan, also said, the new hydrocarbon exploration and licensing policy (HELP) and a liberalized gas price regime would help to reduce India's heavy dependence on imported energy over the next 10-15 years down the line.

Through HELP, India aims to attract a $25bn-$30bn U.S. Dollars of investment in natural gas and crude oil sector in the next couple of years by deploying necessary surgical reforms to its exploration and production rules announced last week.

Video Attribute: CNBC-TV18's Rituparna Bhuyan speaks to the Petroleum minister, Dharmendra Pradhan about the reforms in the Oil and Gas sector and also about the Hydrocarbon Exploration and Licensing Policy (HELP).

Basing his calculations on a crude oil price of $45 a barrel, he said the principal aim was to increase domestic gas production at a time of rising demand and falling output. "$40bn U.S. dollars of hydrocarbons will be unlocked for production through this policy reform," he said in an interview. "To realize this amount we are expecting investment of more than $25bn in the next two to three years."

The government had previously stated that country is expected to monetize unexploited gas reserves of around 6.75tn cubic feet, worth more than $28bn, from existing and future discoveries.Businesses and industry analysts welcomed the changes, although some were skeptical given the recent collapse of the oil price and a reluctance to expend capital on high-cost projects.

With reporting by Press Information Bureau, Financial Times and CNBC