Oil and Gas Market: Domestic Scenario

India-IEA Joint Emergency Response Exercise Workshop

Shri. L.N. Gupta, Joint Secretary (Refineries)
Ministry of Petroleum and Natural Gas, Government of India

30th May, 2012

Presentation Outline

Oil and Gas Market in India

1

Energy Overview

Upstream Sector
Downstream sector Natural Gas Sector

3 4

Oil and Gas Market in India

1. Energy Overview of India

Indias Energy Facts at a Glance.

17.5% of worlds population (1.21 billion in year 2011) 3rd largest economy in the world by GDP (PPP basis IMF report) GDP growth rate is expected to be in the range of 6.5-7.5%

11th largest Energy Producer in the world - Produces 2.4% of world production
6th highest in Energy Consumption - Consumes 3.3% of world consumption Energy Consumption/capita amongst lowest in the world hence great growth potential One eight North Americas per capita energy Consumption
(Indias per capita consumption: Primary Energy 400 KGOE; Hydrocarbons 166)

One Sixth of western Europe Consumption and One fourth of the World Average Average Energy Consumption Growth has been 6% p.a., projected to increase further

India imports around 80% of its hydrocarbon energy requirements Securing energy sources is of very strategic importance to India

Primary Energy % Share

MMTOE Oil

1995 75.2

2000 106.1

2005 120

2009 151

2010 156

Natural Gas
Coal Hydro-Electricity Nuclear Energy Renewable Total

17.4
142.8 17.2 1.7

23.7
144.2 17.4 2.9 0.7

32
184 22 4 2

46
251 24 4 5

56
278 25 5 5

Share of Coal as primary energy source continues .. Decline in share of Oil in % terms
Source statistical review of world energy 2011

254

295

364

480

524

Growing Primary Energy Demand India

1633 MTOE

510 MTOE

Estimated Demand for Primary Energy to rise up to 1633 MTOE by 2031-32 For oil, though importer for over 25 years, considering the dramatic rise in volume demand, the balance of trade for oil is a critical issue
Source: BP Statistical Review 2011 Projected figure Source: Integrated Energy Policy

1.Oil and Gas Market in India

1.1 Upstream Sector of India

Upstream Sector: Key Facts

Key Facts
26 sedimentary basins: 3.14 mn sq kM (44% on

land and 56% offshore)

Prognosticated Hydrocarbon reserves: 28 BTOE

(<25% established) ~ 200 bn bbls

Crude oil production:38 MMT Upstream NOCs dominate in

production/acreage
Directorate General of Hydrocarbons (DGH)

vested with upstream regulatory functions

New Exploration Licensing Policy (NELP)

Source: DGH

New Exploration Licensing Policy (NELP)

60 Number of Blocks 50 40 30 20 10

Exploration Blocks awarded in NELP Rounds 52 41 32 24

23

23

20

20

0
1
April 2000

NELP Rounds

June 2010 Note: 9th NELP round has just now over

Provides an international class fiscal and contract framework for E&P of hydrocarbons Estimated sedimentary area of 3.14 lakh Sq. Kms 47% of estimated area has been awarded under first eight NELP

In the first eight rounds of NELP spanning 2000-2011, Production Sharing Contracts (PSCs)
for 235 exploration blocks have been signed. Actual investment made by E&P companies under NELP is of the order of US$ 15.88 billion
Source: PPAC Note: 9th NELP round has just now over

Significant Discoveries

Source: DGH Disc Yr: 2000-2005

Recent Discoveries

Source: DGH

Position of Hydrocarbon Reserves

Pvt./JV 647 32%

Reserves
2042 MMT (Oil+OEG)
ONGC 1212 59%

OIL 183 9%

Initial In Place
Oil
ONGC OIL Pvt./ JV Total
4960.66 776.09 820.67 6557.42

Ultimate Reserves
Oil
1403.25 230.06 194.89 1828.20

Reserves* (MMT)
Oil
552.61 81.79 122.995 757.395

Gas
2416.13 317.06 1208.70 3941.89

O+OEG
7376.79 1093.15 2029.37 10499.31

Gas
1191.67 170.83 640.67 2003.17

O+OEG
2594.92 400.89 835.56 3831.37

Gas
659.38 100.81 524.22 1284.41

O+OEG
1211.99 182.6 647.215 2041.805

* Reserves denote balance recoverable reserves of hydrocarbons

Source: PPAC

Crude oil Production: Projection

Source: Report of the WG on P&NG Sector for the XII Plan

Alternate Source of HC: CBM and Shale Gas

Coal Bed Methane (CBM) Gas development in India
Prognosticated CBM Resources Established CBM resources Total available Coal bearing area Exploration Initiated Blocks Awarded* Commercial production of CBM gas 92 8.92 26000 17000 33 0.23 TCF TCF Sq.KM Sq.KM Nos. MMSCMD

*CBM blocks have been awarded in the state of Andhra Pradesh, Assam, Chattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Tamilnadu and West Bengal.

Shale Gas development in India

a) Shale Gas Spread in the sedimentary basins Cambay, Gondwana, KrishnaGodavari onland and Cauvery

b) MoU signed on 06.10.2010 between Department of For the assessment of Shale Gas State, USA and Ministry of Petroleum & Natural Gas Resources in India, imparting training to Indian GeoScientists and Engineers & assistance in formulation of Regulatory Frameworks.
Source: Report of the WG on P&NG Sector for the XII Plan

Oil and Gas Market in India

2. Downstream Sector

Refinery Capacity: India

250

PSU
200

PVT Total

ALL INDIA
185

213 193

MMTPA

150

149 112
115 127 132

100 62

50

0 1998 2000 2002 2004 2006 2008 2010 2011 2012

Third largest refining capacity in Asia-Pacific and fifth largest in the world Indias Refinery Capacity additions have made the country surplus in products
Source: PPAC

Indian Refining Sector on Expansion Spree

350 300 250 200 MMTPA 150 100 50 2 19 60 14.6 25.5 30.5 80.7 2012-13 2013-14 2014-15 2015-16

Projected Refining Capacity - 12th Plan

15 38 60 18.1 41.5 46 92.3 2016-17

NOCL EOL RIL ONGC Group HPC Group BPC Group

Indias present refining capacity is 213 MMTPA (leapfrogged from 62 MMTPA in 1998) Refining capacity is expected to touch 310.9 MMTPA by 2017 India is the largest exporter of petroleum product in Asia since Aug09 (Platts)

Maximization of distillates, Quality & Upgrading have been the major focus of Indian Refiners
Source: Report of the WG on P&NG Sector for the XII Plan
16

Projected Refining Capacity-PSU Vs. Private

350.0 310.9

300.0
262.3 250.0 MMTPA 200.0 151.3 150.0 100.0 50.0 0.0 2012-13 2013-14 2014-15 2015-16 2016-17
Source: Report of the WG on P&NG Sector for the XII Plan

232.3

240.6

241.4 197.9

154.6

155.4

165.4
113.0

PSU

Private
Total
96.9

81.0

86.0

86.0

Finished Products: Production & Consumption

250 Figs in MMT

200

Consumption

Production

Surplus

150

100
54 50 10 0 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 11 12 57

41
21 22

Figure of FY12 is provisional Source: PPAC

Projected Products Demand: Sector-wise

90000 80000 70000 TMT 60000 50000 40000

Other Power Agriculture Transport Industry

30000
20000 10000 0 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Source: Report of the WG on P&NG Sector for the XII Plan

Projected Products Demand: Product-wise

90 80 70 60 MMT 50 40 30 20 10 0 2012-13 14 12 10

2013-14
2014-15 2015-16 2016-17 CAGR (%)

8
Percentage 6

4
2

0
-2

-4
-6

Source: Report of the WG on P&NG Sector for the XII Plan

India Net Exporter of Petroleum Products

70 Figs in MMT

60
50 40 30

IMPORT

EXPORT

NET EXPORT

20
10 0 -10 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Indias rapid Refinery Capacity additions have made the country net exporter of products (Largest exporter in Asia according to Platts)
Source: PPAC

Indias Marketing Network at a glance

As of 01.04.2011 (Prvnl.)

Retail Outlets LPG Customers PSUs (Domestic and Non-domestic) LPG Distributors- PSUs

41,947 126.89 million 10,541

Bottling Capacity (TMTPA)

Auto LPG Dispensing Stations Crude Oil Pipelines length (KM) Oil Product Pipelines length (KM) Movement through Pipelines 2010-11 (MMT ) Gas Pipelines length (KM)

11889
222 6559 12,783 142 9774

Gas Pipeline movement in 2010-11 (MMSCMD)

Source: PPAC

170

Petroleum Products a major foreign exchange earner

70 60 US $ billion 50 40 80%

Exports

Growth (y-o-y)

70% 60%

50%
40% 30% 20% 10% Percentage

30
20 10 0 2003-04 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

0% -10%

Sector with immense Export Potential

Source: PPAC

Strategic Storage
Indian Strategic Petroleum Reserves Limited (ISPRL), a Special Purpose Vehicle created by the Government of India, is currently building 5.33 MMT of crude oil storage capacity . The storages are in underground rock caverns and the locations and capacities are as follows: Visakhapatnam, State of Andhra Pradesh.
Mangalore, Padur , State of Karnataka. State of Karnataka.

Capacity: 1.33 MMT

Capacity: 1.5 MMT Capacity: 2.5 MMT.

As per the Integrated Energy Policy, the country is required to maintain a reserve of strategic-cum- buffer stock equivalent to 90 days of oil imports. OIL PSUs are also in the process of building storages for hydrocarbons. With these storages the total storage of crude oil and petroleum products is expected to be approx 30.82 MMT. As per a paper prepared by MoP&NG, the country would require additional storage of 13.32 MMT by the year 2019-20. Of this, ISPRL is conducting feasibility studies for 12.5 MMT of crude oil storage.
Source: ISPRL
24

Crude Pipelines
Number: 17 Length : 7425 km Capacity:117 MMT

Product pipelines
Number: 28 Length :11000 km Capacity:68 MMT

Source: PPAC
25

Oil and Gas Market in India

3. Natural Gas Sector

Indian Demand Assumptions

500 450 400 350 Iron / Steel Petchem/ Refineries Industrial

Figs in MMSCMD

300
250 200 150 100 50 0 2012-13 2013-14 2014-15 2015-16 2016-17

City Gas
Fertilizer Power

The share of natural gas in the energy basket is projected to increase from 11% in 2010 to around 20% by 2025.
Source: Report of the WG on P&NG Sector for the XII Plan

Natural Gas Availability: Projections

600 500

Figs in MMSCMD
Imports (Trans Border Pipelines) Imports-LNG Domestic Sources

400
300 200 100 0 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Gas availability is projected to be increase by 2.5 times to 500 mmscmd in next five years

Source: Report of the WG on P&NG Sector for the XII Plan

LNG Import Facilities: Projections

50 45

Figs in MMSCMD

40
35

East Coast Mundra Ennore Kochi

30
25

20
15 10 5 0 2012-13 2013-14 2014-15 2015-16 2016-17

Dabhol
HLPL Hazira Dahej

75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 13th Plan (20172022)

LNG import facility is projected to increased from 20 to 45 mmscmd in next five years
Source: Report of the WG on P&NG Sector for the XII Plan

Gas Pipeline Network

Gas Pipelines in India:
Pipeline Length 13428 KM

Design Capacity
355 MMSCMD Average Flow 232 MMSCMD

Source: PPAC
30