Role Of ONGC in the India’s Road map for Energy Security : Role Of ONGC in the India’s Road map for Energy Security K. Hazarika
Director (Onshore), ONGC 1 Slide 2: 2 Contents Energy Scenario
Growth of International E&P Industry
Birth and Growth of Indian Petroleum Industry
Current Scenario, Key Drivers & Thrust Areas for Future
ONGC – an Indian MNC
Preparedness of ONGC Energy Scenario : Energy Scenario 3 Slide 4: Powered by Energy Economic Growth Energy is a Key Enabler for Economic Growth 4 Slide 5: Energy Energy Sources Finite
Gas Infinite/ renewable
Biomass etc. 5 Slide 6: Reserves Status World Proven Reserves of Crude Oil : 1408.7 Thousand Million Barrels
India’s Proven Reserves of Crude Oil: 5.8 Thousand Million Barrels Source: BP Statistical Review of World Energy 2009 6 Slide 7: Reserves/Production Status World Proven R/P of Crude Oil : 42 yrs
India’s Proven R/P of Crude Oil: 20.7yrs Source: BP Statistical Review of World Energy 2009 7 Slide 8: Primary Energy Consumption Country-wise primary energy consumption MMTOE India:
At 433 MMTOE, 5th largest consumer of primary energy
One of the largest growing market for energy 3.84% of total Source: BP statistical review 2009 8 Slide 9: India’s Energy Basket-2009 India Energy Consumption: 433 MTOE Source: BP Statistical Review of World Energy 2009 World Energy Consumption: 11,299 MTOE Primary Energy 9 Slide 10: Future Projection - 2030 Global Primary Energy expected to grow @ 1.5% (earlier @ 2%) Source: IEO 2009 10 Slide 11: Future Projection - 2030 India’s Primary Energy expected to grow@ 2.5% (earlier @3.2%) Source: IEO 2009 11 Slide 12: Oil Consumption India 4th largest consumer of oil : 135 MMT(3.4% of total)
India’s Oil consumption increased at CAGR of 4% (1998-2008) against the world CAGR of 1.4 %. World oil consumption (2008) 3,928 MMT Source: BP statistical review 2009 Country-wise oil consumption MMTOE - 2008 12 Slide 13: Energy outlook For India, sourcing of Energy remains a challenge…..
with 16% of Global Population;
0.5% of world’s Petroleum Reserve;
10% of world’s coal reserves;
8-10% GDP growth target; &
4.5% CAGR (’97-07’) in energy demand 13 Growth of International E&P Industry : Growth of International E&P Industry 14 Slide 15: Growth of International E&P Industry Phase - I Phase - II Phase - III Emergence and Growth of Private Sector Oil and Gas Companies Emergence and Growth of National Oil Companies Private Sector Consolidation 1860 – 1935 1935 - 1990 1990 – Till Date 15 Slide 16: Phase – I [1860 – 1935]
Emergence & Growth Private Sector Company Key Drivers
Industrial Revolution which created demand for oil.
Proliferation of US based companies due to easy land access.
European companies able to exploit resources from colonial countries. This led to:
Development of Human Resource,
Development on technology front;
Birth of major oil companies viz. Standard Oil Company, Burmah Oil, Sun Oil, Pennzoil, Royal Dutch Shell, Phillips, etc. 16 Slide 17: Phase – II [1935 – 1990]
Emergence and Growth of NOC Key Drivers
Natural resource nationalization and reduction of state’s dependence on International Oil Companies
Crude oil becoming a commodity of strategic importance
Inability of local private sector to undertake commercially risky and technologically challenging E&P business Leading to:
Formation of National Oil Companies (NOCs) – developing energy capabilities
International Oil Companies (IOCs) loosing dominance in crude oil production. 17 Slide 18: Phase – III [1990 – till date]
Private Sector Consolidation Key Drivers
Govt. decision for faster Exploration
Blocks awarded to NOCs & private companies through competitive bidding process
Consolidation of private companies for cost reduction
Carrying cost of exploration rigs This led to:
Major IOCs like BP, Total, Shell, Exxon, Mobil, Chevron etc. acquiring smaller oil companies like FINA, Elf, Gulf, AMOCO, ARCO, Superior, UnoCal etc.
Merger of majors Mobil with Chevron and then TEXACO with Chevron. 18 Birth & Growth of Indian Petroleum Industry : Birth & Growth of Indian Petroleum Industry 19 Slide 20: 20 Growth of E&P Industry Phase - I Phase - II Phase - III Birth and Pre-Independence era Emergence and Growth of National Oil Companies Opening up of Hydrocarbon Sector 1889 – 1947 1947 - 1990 1990 – Till Date Slide 21: 21 Commercial discovery of crude oil made in 1889.
Thereafter systematic drilling began in 1891.
A small refinery built in Margherita in 1893 – shifted to Digboi in 1901.
Industry showed modest growth over the next 50 years.
On the eve of independence, two domestic oil producers were operating in the Country
Assam Oil Company in the Northeast
Attock Oil Company in the Northwest (Present-day Pakistan). Phase – I [1889-1947]
Birth and Pre-Independence era Slide 22: 22 Creation of Oil and Natural Gas Commission
Oil & Natural Gas Directorate upgraded to Oil and Natural Gas Commission in 1956.
Commission converted into a statutory body by Act of Parliament in 1959 for planning, promoting, organising and implementation of programme for development of Petroleum resources in India.
Hydrocarbon India Ltd. (HIL), precursor to ONGC Videsh Ltd., formed in 1965.
Oil and Natural Gas Commission becomes Oil and Natural Gas Corporation on 1st Feb.’1994.
In 1997 ONGC is declared as one of the “Navratna” PSU.
ONGC becomes a “Maharatna” PSU in 2010. Emergence & Growth of National Oil Companies Slide 23: 23 Oil and Natural Gas Directorate (the predecessor to ONGC) in 1955.
Oil India Private Limited formed in 1959.
In 1961, it became a joint venture company between the Indian Government and Burmah Oil Company Limited, UK.
In 1981 it became a fully Govt. owned entity
Creation of State owned refineries
Indian Refineries Limited in 1958
Indian Oil Company Limited in 1959
Both merged to form Indian Oil Corporation in 1964
In 70s Petroleum Sector was largely nationalized as Govt. took over the operations of IBP, Esso, Caltex and Burma-Shell. Phase – II [1947 – 1990]
Emergence & Growth of National Oil Companies 23 Slide 24: 24 The Nineties (90’s) saw the opening up of Petroleum Sector
New Exploration Licensing Policy formulated by Govt. in 1997-98:
To provide level playing field to Public and Private players, with the aim of giving impetus to exploration in India.
Overwhelming response received for private and public players – both Indian and foreign.
100% FDI allowed in refinery sector in July, 2000.
FDI limit increased from 26% to 49% in new refinery projects by PSUs in Jan.’08 Phase – III [1990 – till date]
Opening of Hydrocarbon Sector Slide 25: 25 Source: Planning Commission & TERI Data Book Growth of E&P Industry Slide 26: 26 Source: Planning Commission & TERI Data Book Growth of E&P Industry Slide 27: 27 Source: Planning Commission & TERI Data Book Growth of E&P Industry India’s Current Scenario, Key Drivers & Thrust Areas for Future : India’s Current Scenario, Key Drivers & Thrust Areas for Future 28 Slide 29: 29 Current Scenario Exploration
Post NELP exploration has picked-up
VII rounds of bidding completed
256 blocks have been allocated
Likely to attract an investment of US$ 10 billion
68 oil and gas discoveries made leading to reserve accretion of over 600 MMToE.
NELP VIII recently completed.
36, out of the 70 blocks on offer, awarded. Slide 30: 30 Current Scenario Oil & Gas Production
Indigenous crude oil production in 2008-09 was: 33.506 MMT
Indigenous gas production in 2008-09 was: 32.849 BCP
Gas production started from KG Basin by RIL in Apr’09
Crude oil production started from Rajasthan by Cairn India in Aug.’09
Domestic production of oil & gas shall, therefore, enhance considerably from 2009-10 onwards.
Surplus installed capacity from 2001-02 onwards.
Currently installed capacity is about 150 MMT and expected to increase by another 92 MMT during the XI Plan.
Refinery throughput in 2008-09 was 160.772 MMT. Slide 31: 31 Key Drivers Key drivers
Energy Growth Maintaining GDP Growth Imbalance in Supply and Demand Equation Growing Primary Energy Requirement Slide 32: 32 Maintaining GDP Growth Average Economic Growth of 3.5% & 2% population growth during the first 45 years of independence –
Witnessed doubling of GDP in these 45 years.
During the next 9 years economy grew at 7% and population at 1.5%
GDP double in 9 years.
Country is on a steep growth curve and targeted growth is over 7% in the coming years.
India is poised to become 3rd largest economy by the middle of this century. Slide 33: 33 Growing Primary Energy Requirement 830 MMToe 433.3 MMToe Source: BP Statistical Review 2009 & IEA Outlook 2008 Slide 34: 34 Imbalance in Supply and Demand Equation Source: MOP&NG and TERI Energy Data Yearbook Slide 35: 35 Key Thrust Area Exploration – out of 3.14 sq. Kms.
22% - moderate to well explored.
20% - poorly explored
44% - exploration just initiated
14% - still remaining unexplored. (Source: ICRA)
Infrastructure and Development of New Finds
Major finds made under NELP mostly in deep water and frontier
Development of technology and Infrastructure for development of these finds will require massive capital infusion. Slide 36: 36 Key Thrust Area Redevelopment of Brown Fields
Most of the major producing fields are aged & mature.
Require induction of technology for improved production and Recovery Factor.
Require revamping of surface facilities – more investment with lesser returns from mature fields.
Further capacity enhancement required to meet growing product demand.
Technology up-gradation of existing refineries to meet future fuel norms. Slide 37: 37 Key Thrust Area Pipeline Network
Increase in pipeline coverage for gas and product transportation required.
Infrastructural requirement for development of projected gas market.
Development of City Gas Projects
Development of Alternate Source of Energy
Development of alternate sources of energy like CBM, UCG and Gas Hydrate in primitive stage.
Capital investment required on the technology and development front. ONGC – an Indian MNC : ONGC – an Indian MNC 38 Slide 39: 39 Slide 40: 40 * 38th project is Sudan’s 741 km long completed Pipeline ONGC- E&P Global Footprints 40 OVL Production (O+OEG) : 8.776 MMToe Slide 41: 41 ONGC: Domestic Operations 41 Slide 42: ONGC Group produces ~ 1.2 million barrels per day of oil
Plus Oil- equivalent Gas,
from a balance reserve of > 11 billion barrels O+OEG:
refines about 12.5 MMTPA ( >270, 000 bopd):
extracts about 3 MMTPA of Value Added Products
Sells Crude Oil, Gas Value Added Products
(LPG, Naphtha, Ethane-Propane, SKO, HSD, ATF etc.)
with a turnover of USD 23.83 billion (2008-09) 42 Slide 43: E&P Infrastructure State-of-the-art exploration facilities
28 Seismic Crews
79 Drilling rigs
78 Work over rigs
108 Well Stimulation Units Globally comparable Production & Transportation facilities
240 Onshore installations
194 offshore installations
22,000 + Kms. of Pipelines
30 Offshore Supply Vessels 43 Slide 44: Journey - Oil Production Onshore Offshore ONGC Since Inception 44 Slide 45: Gas Production Trend Since Inception ONGC Offshore Onshore 45 Exploration and Production Cycle : Exploration and Production Cycle 46 Slide 47: Phases of Field development 47 Slide 48: Most of the easy oil has been found.
As we move to harsher environmental conditions i.e. deeper into the sea/ocean and undeveloped areas in search of more oil & gas we are faced with a myriad of technical challenges from drilling to abandonment. New Finds and Production 48 New Finds and Production : New Finds and Production Finding new oil
In harsh environment – Deep Sea (Offshore)
Finding cost very high
Developing deep sea fields–cost higher & time consuming
Big new field in Onshore
For putting the find to producing Asset on fast track
Enhance production from the existing matured & Ageing fields through
Increasing Recovery Factor of existing fields
Monetization of idle Assets
Optimization of flowing wells
Revamping of Ageing Installations
Achieving Zero Flaring of Gas 49 Slide 50: International Scenario More than 40,000 oil and gas fields discovered (Onshore & Offshore)
94% of the oil is coming from 1500 fields only.
Mature fields contribute 70% of total world crude oil production.
Average Oil Recovery Factor:
US reservoirs – 32% (DOE, USA May 2002)
Norwegian Continental Shelf – 44% (Norwegian Petroleum Directorate)
Oman recovery factor varies from 5% to 70% with an average of about 30%. (Observation of PDO)
Iran recovery factor increased from 28% to 35%. (Wood Mackenzie, Jan.’04)
A reasonable estimate of RF around the world is 37% (OFR) 50 So… The major thrust has to be on management of Existing matured and Ageing fields… : So… The major thrust has to be on management of Existing matured and Ageing fields… 51 Slide 52: International Scenario Matured and aging fields
The stage at which production levels begin to decline.
Smaller quantities of reserves to produce with time.
Frequent Servicing such as de-bottlenecking, work- over maintenance programmes.
Field trials of innovative technologies are difficult to justify economically.
Combating the spiral of creates a pressing need to monitor fields.
Share of production from these older fields can only increase by arresting the production decline is one of the strategic arena for Global competition. 52 Slide 53: International Scenario National Oil Companies (NOC) are the dominant players in the global oil and gas industry.
80% of the reserves are held by NOC.
NOCs’ fields are typically onshore with current recoveries way below those of International Oil companies (IOCs’).
NOC ~ 20%
IOC > 60%
The key to IOCs’ success is the Application of Technology. 53 Slide 54: International Scenario Importance of Mature fields
Most of the easy oil has been discovered, existing fields still remain the main source of production
30-35% of OIIP is recovered at the end of production period in usual practice .
Increasing recovery factor by 1% gives 2 to 3 additional years worth of oil (about 10 Bbbl) to the world
If this can be increased by 10% it will yield additional 200 – 300 Bbbl of oil translating into about 20 years of consumption. Residual reserves have thus become a focus area of development 54 Slide 55: Decline in Pressure and Reserves
High water-cut and sand/ scale problems
Reserves become scattered and a single field begins behaving like multiple marginal fields
Mostly scattered fields with old infrastructure Typical Challenges of a Mature field 55 Preparedness of ONGC : Preparedness of ONGC 56 Slide 57: 57 Sojourn in the Deep Sea – Drilling & Development
Deep Sea drilling taken up in KG Basin and Kerala-Konkan
Avg. estimated cost of drilling per well ~ Rs. 600 Crores
Two Deep Sea Drilling rigs already deployed
One more Deep Sea Drilling Rig to join in our Deep sea drilling campaign by end of 2010. Slide 58: 58 Redevelopment of Fields through integrated schemes:
Offshore fields viz. Mumbai High North & South;
Onshore fields of Ankleshwar, Ahmedabad and Mehsana;
Review of IOR/EOR schemes of Assam and Gujarat fields
Review of implemented schemes; and
Implementation of newer technology for EOR Slide 59: 59 Development Drilling
Stress on aggressive infill drilling.
Drilling of hi-tech and side track wells:
Impetus given to hi-tech drilling in Onshore Assets.
97 hi-tech wells drilled during the last 4 years.
Non-flowing wells and in some cases abandoned wells liquidated by S/T
More than 25 wells liquidated by S/T during last 3 years. Slide 60: 60 Additional Field Development
Fast track additional development of fields viz. Padra, Akhuljuni & Kathana fields of Cambay Sub-asset.
Oil production has gone up from 300 TPD to over 500 TPD in 2 years’ time.
Development of new finds:
All new finds having oil potential were immediately put on production.
48 of 70 new finds have been put on production.
Cumulative oil and gas gain (2002-09) has been 0.738 MMT and 265 MMSCM respectively.
Development plan for new finds executed viz. Laiplinggaon of Assam and Gopavaram of Rajahmundry. Slide 61: Bio-remediation of 49641 Tonnes of soil soaked with oil carried out by application of Oilzapper technology – at Mehsana Asset in Gujarat
Proposed for extension to other fields also. Environmental Initiatives Before After 61 ONGC is thus committed & prepared to deliver through its perseverance, technological excellence and perceived initiatives toIndia’s Energy Security : ONGC is thus committed & prepared to deliver through its perseverance, technological excellence and perceived initiatives toIndia’s Energy Security 62 Slide 63: Thank You 63 Slide 64: Higher level hi-tech wells 7” Liner-900 Setting Whipstock Removal of Whipstock Single layer
Horizontal well Packer Prod. Casing Suggestions
Bare foot completion planned for Kalol wells
Multilateral / branched lateral wells can be drilled with same inputs
2nd level ML wells can be planned for simultaneous production from different two layers
7” retrievable whipstock is required (cost : Rs. 22 lakhs) Multi Lateral
Well Branched Multi
Lateral Well Dual Layer
Multi Lateral Well 600 850 1080 1310 1595 Kalol Tara-
Kand Kand K-II
K-XII Slide 65: 13-3/8” 9-5/8” 5-1/2” Ultra Short Radius
Well is made horizontal in 8m TVD
Casing is section milled
Cement plug is placed for S/T
Curved section is drilled with an assembly
The assembly is changed to drill maximum 200m drain hole
Well is made horizontal in 20m TVD
Permanent whipstock is set at desired point
window is cut and drain hole is drilled with short radius drain hole drilling tool 5-1/2” 9-5/8” USRDH SRDH High Tech Drilling
Schematic of USRDH & SRDH Well Back