Indias Energy Security Perspectives Scenarios & Strategies

Oil and Natural Gas Corporation Ltd., India

Contents Introduction Oil and Gas Scenario Promoting Conservation and Efficiency Technology Absorption Challenges and Opportunities Perspective

Core Strategies

Oil and Natural Gas Corporation Ltd., India

Average Annual GDP & Population Growth : 2005-2030

7.5 6.5
GDP Population

Percent per Year

5.5 4.5 3.5 2.5 1.5 0.5

fr ic a ta te s as t ia ia a pa n K or ea e Eu ro p hi n In d us s E ra z B
Source: EIA, IEO2008 Oil and Natural Gas Corporation Ltd., India

Ja

dl e

ni te

O E

M id

ou t

il

-0.5

Fuel for the rising Indian population

2.50

2.00

1.93 1.70 1.82 1.55

2.02

Billion People

1.50

1.38 1.03 1.20

1.00

0.50

0.00

01 20

11 20

21 20

31 20

41 20

51 20

61 20

71 20

India's population reach 2 billion? It is a real possibility over the long term
Source : Population Reference Bureau Oil and Natural Gas Corporation Ltd., India

Growth in Electricity Sector

800 700 600

Billion KWH

500 400 300 200 100 0

-91 0 9 19

-01 0 0 20

-03 2 0 20

-04 3 0 20

-05 4 0 20

-06 5 0 20

-07 6 0 20

Oil and Natural Gas Corporation Ltd., India

Prices High & Volatile

Oil and Natural Gas Corporation Ltd., India

Despite High Prices, the demand is stronger

Since 2003, world oil consumption has growth has averaged 1.8% per year. Non-OECD countries, especially China, India, and the Middle East, constitutes the largest part of this growth.
China U.S. Other (Includes India)
2.7

Total World Oil Consumption Growth

Change from Prior Year (Million Barrels per Day)

1.6 1.3 1.0 0.8

1.0

2003

2004

2005

2006

2007

2008 (est.)

Source: EIA, Short-Term Energy Outlook June 2008

Oil and Natural Gas Corporation Ltd., India

World Marketed Energy Use by Fuel Type

250
History Projections 33% 29% Natural Gas 24%
Share of World Total

200
Quadrillion Btu
37%

Liquids Coal 27%

150

100
23%
Renewables

50

8% 6%

8% Nuclear 6%

0 1990 1995 2000

2005

2010

2015

2020

2025

2030
Source: EIA, IEO2008

Oil and Natural Gas Corporation Ltd., India

World Liquids Consumption by Region

2030
North America Non-OECD Asia OECD Europe OECD Asia C/S America Middle East

2005
25 15 16 16 9 6 6 8 10 7 9 28 31

% Change 2005-2030 11%

102%
3% 7% 42% 62% 43% 47%

Non-OECD Europe/Eurasia
Africa

5 3 4

10

15

20

25

30

35
Source: EIA, IEO2008

Million Barrels Oil Equivalent per Day

Oil and Natural Gas Corporation Ltd., India

Worldwide Decline in Production

Does it look like that top 10 International Oil Companies have already passed Peak production ??

Current Annual Oil Production in World : 85 Million bpd Worlds Average Production Decline : 3.3 Million bpd / 4% Per Annum Saudi production : 10.5 Million bpd World needs One new Saudi Arabia every three years to offset the decline
Oil and Natural Gas Corporation Ltd., India

Crude Indigenous Production and Imports

250

History

Projections

Domestic
200

Imports

MMT

86.48

50

89.58

95.54

100

105.06

42

120.37

42

150.51

41

170.41

150

34

32

20 04 -0 5

20 05 -0 6

20 06 -0 7

20 07 -0 8

34

34

20 08 -0 9

20 09 -1 0

20 10 -1 1

Oil and Natural Gas Corporation Ltd., India

20 01 -1 2

40

195.49

India :Yawning Demand Supply Gap Oil

140.0
Oil Production Oil Consumption

120.0 100.0

MMT

80.0 60.0 40.0 20.0 0.0

19 70

19 72

19 74

19 76

19 78

19 80

19 82

19 84

19 86

19 88

19 90

19 92

19 94

19 96

19 98

20 00

20 02

20 04

Source: BP Statistical Review 2007

Oil production almost stagnated ~34 MMT Oil consumption more than 3 times of oil production Huge supply demand gap Crude oil import burden > 80 MMT ~ USD 64 Billion [Rs. 256,000 Crore] > 33% of total import
Oil and Natural Gas Corporation Ltd., India

20 06

Deepwater Oil and Gas to show strong growth

Oil and Natural Gas Corporation Ltd., India

Worldwide Unconventional Production, 2005 - 30

Million Barrels Oil Equivalent per Day
4.5 4 3.5 3 2.5 2 1.5
1.1 1.3 1.0 0.6 0.5 0.3 0.0 0.1 0.0 0.0 2.7 4.2

2005 2030

1 0.5 0

Oil Sands

Ultra Heavy

Gas to Liquids

Coal to Liquids

Biofuels

Shale Oil
Source: EIA, IEO2008

Oil and Natural Gas Corporation Ltd., India

Global Transportation sector dominates liquid fuel consumption

20

History

Projections Transportation

million barrels per day

15

10

Industrial

Electric Power
0 1970 1980 1990 2000

Residential and Commercial

2010

2020

2030
Source : AEO 2008

Oil and Natural Gas Corporation Ltd., India

Transportation Energy More for Light Vehicles

20

History

Projections

Light-Duty Vehicles quadrillion Btu

15

10

Heavy-Duty Vehicles
5

Air

Rail
0 1980 1990 2000 2010 2020

Water

2030
Source : AEO 2008

Oil and Natural Gas Corporation Ltd., India

Transport Fuel Forecast - 2030

2008 : 800 Million Cars

Worldwide
Car

and growing

Oil

Demand

No existing alternative to Oil

as fuel
Demand

Growth Transport Fuel :

OECD : + 27 % Non OECD : + 111 %

in

Oil and Natural Gas Corporation Ltd., India

Transport Fuel Demand

Look 2014, India to reach 4th Position in light Vehicle Market after US, China & Japan
Look 2010, Ten Thousand New Buses for New Delhi Jazz, Cruse, M 300, Santa Fe, A-Star, Escudo, Ingenio, C 30, C 70 the upcoming cars
Oil and Natural Gas Corporation Ltd., India

What is driving the Indian Liquid demand ?

Petroleum Products

Bitumen Lubes LSHS Furnace Oil Diesel ATF SKO Naptha LPG 0 10 20 MMT 30

62.77, 53%

22.87, 19%

33.19, 28% Light Distillates Middle Distillates Heavy Ends

40

50
Source : MoPNG Oil and Natural Gas Corporation Ltd., India

Optimizing Fuel Consumption

Sector wise total Energy Consumption
14%

Sector wise Consumption of Petroleum Products

13% 14%

5%

4%

10%

49%
18%

22%

Industry Transport Domestic Agriculture Others

51%

Estimation of Energy Efficiency Scenario in India (Saving Potential):

Total Energy Consumption Oil & Gas Consumption : 411 MMTOE : 168 MMTOE

Average Saving Potential

Total Oil & Gas Saving Potential Money Equivalent

: 22%
: 37 MMTOE : Rs. 74,000 Crore
Oil and Natural Gas Corporation Ltd., India

Fuel losses at Intersections

Estimation of Fuel wasted by vehicles at cross sections/ junctions/ signals due to idling / congestion of traffic
Daily Traffic Entering 12 Intersections in Delhi Fuel Loss at 12 Intersections in Delhi Fuel Loss in city of Delhi (600 Intersections) 17.5 Lakhs (Year : 2004)

16828 Litres per day

(CNG : 6979 Litres, Diesel : 2349 Litres & Petrol : 7500 Litres)

858967 Litres per day

(CNG : 354534 Lts, Diesel : 121054 Lts & Petrol : 383378 Lts)

Daily Monetary Loss due to the Fuel Loss in Delhi Rs. 3.82 Crore per day.
( @ Current Fuel Prices)

Annual Monetary Loss due to the Fuel Loss in Rs. 1395 Crore per Annum. Delhi (@ Current Fuel Prices) Annual Fuel Loss in Delhi 1.97 Million Barrels petroleum products approx.
(~0.27 MMT)

Extrapolated to nine Metros, the annual fuel loss is approx. 6.36 Million barrels (~ 0.9 MMT) per annum, approx. Rs. 4506 Crore at current fuel prices.
Oil and Natural Gas Corporation Ltd., India

Natural Gas Indigenous Production and LNG Import

120

8 .7 2 3

100

Production

LNG Imports
5 .2 3 1 57 6. 54 8.

Billion Cubic Metre

80

0 .6 7 0 2 .7 0 2

60

40

92 2.

55

32

32

32

19 90 -9 1 20 00 -0 1 20 03 -0 4 20 04 -0 5 20 05 -0 6 20 06 -0 7 20 07 -0 8

18

29

32

32

20

20 08 -0 9 20 09 -1 0 20 10 -1 1 20 01 -1 2
Oil and Natural Gas Corporation Ltd., India

48

55

74

62 7.

India: Upcoming Sources of Natural Gas Major Contributors

ONGC moving ahead 110 + MMSCMD 56 MMSCMD now (Offshore+Onshore) Now G1 GS15 : 2 MMSCMD by 2009 Vashistha + S1 : 6 MMSCMD by 2011-12 KG DWN 98/2 : 27 MMSCMD by 2013-14 Mahanadi : 12 MMSCMD by 2013-14 OIL JV LNG Petronet LNG Capacity doubling to 12 MMMTPA Import at Dabhol, Kochi & Mangalore RLNG 250 + MMSCMD Reliance additions by 2011 - 12 40 MMSCMD by 2008 80 MMSCMD by 2009 120 MMSCMD by 2010
Oil and Natural Gas Corporation Ltd., India

Indias LNG Supply Outlook

Source PLL Dahej PLL Kochi Dabhol Capacity MMTPA 5
(Planned for Expansion to 10)

Owners Petronet LNG Petronet LNG NTPC, GAIL

Commissioning Commissioned Planned by 2011 Being Revived

5 5

Hazira
Mundra Mangalore

2.5
(Being expanded to 3.6)

Shell & Total

GSPC, Adani, Essar, HPCL ONGC

Commissioned
Planned by 2013 Planned 2011-12

5 1.25

Enmore

IOC

Planned

LNG Imports in India to triple in the XIth Five Year Plan

Oil and Natural Gas Corporation Ltd., India

Global LNG Trade

99 LNG Carriers to be delivered in 2008 -09 & 32 ordered for 2010-12 5 Liquefaction Plants to come on line in 2009, another 7 expected in 2010-12 Production to Grow by 86% by 2016

Oil and Natural Gas Corporation Ltd., India

Global Gas Trade Evolvement

Present

Future

(Source: CRISIL Report on Natural Gas: Annual Review)

Oil and Natural Gas Corporation Ltd., India

Impact of Technology Shaping Future of Mumbai High

450000
EORP-MHS & MHN L-II APP

MH a Matured field Several rounds of during last 32 years. inputs

500000

25.00

Gas Lift

400000 350000 300000 250000 200000 150000 100000 50000 0

Mar-76 Mar-80 Mar-84 Mar-88
MH Ph-II MH Ph-IIIB MH Ph-IVA MH Ph-IVB

Addl A1 in MHN

20.00

PPM Proj, CRMP-I & II

% OIIP Recovered

MH North Phase-I & MH South Phase-I

Oil (bopd)

15.00

MH Ph-III

10.00

Major redevelopment program launched 2000-2001. Redevelopment program of installation of new platforms, expansion of surface facilities and drilling of infill wells. Implementation spanning over seven years, reversed declining trend, boosted production and added new reserves.

5.00

0.00
Mar-92 Mar-96 Mar-00 Mar-04 Mar-08
100 90

Mum bai High - Com parative Production Profile Revised decline under Existing Plan Vs. 40 % recovery Plan 25.0

20.0

80 70

Percentage

BOPD

15.0

60 50

10.0

40 30

5.0

20 10

0.0

80-81

82-83

84-85

86-87

88-89

90-91

92-93

94-95

96-97

98-99

00-01

02-03

04-05

06-07

08-09

10-11

12-13

14-15

16-17

18-19

20-21

22-23

24-25

26-27

Year 40% Rec plan Revised FR % recovery Water Cut %

28-29

Oil and Natural Gas Corporation Ltd., India

Technology Induction Increasing Recovery - Arresting Decline

Q Marine Seismic Geo-Steering Electromagnetic Sea Bed Logging Stim Gun Stimulation Coil Tubing Assisted Stimulation Tubing Disappearing Smart Plug Smart Unmanned platform Compact Cyclonic Degasser Virtual Metering Intelligent Auto Gas Lifts Semi Intelligent Segmented Completion Under Balanced Drilling
Oil and Natural Gas Corporation Ltd., India

Challenges & Opportunities : Investments Planned

Oil and Gas Sector Investment (2007-2017) ($ Bn)
Incremental Investment (Optimistic Case) Base Case

Proposed Investment XIth Plan (PSU):

30 8

35 5 10 20 E&P Transmission Distribution Refining Total CAPEX 18 5 5

ONGC 82672 Crore OVL 58674 Crore OIL 10176 Crore IOCL 45215 Crore HPCL 32285 Crore BPCL 12553 Crore GAIL 12159 Crore etc. Total 2,69,000+ Crores Attracting
investment from global players directly and in partnerships (PI/ JV) Taping domestic capital markets

78

Overall investment in Oil & Gas sector in the next 10 years ~ $80-100 bn
Oil and Natural Gas Corporation Ltd., India

Perspective
World Wide energy Consumption projected to grow by 50% by 2030. 84% growth in Non OECD countries like India and China. Crude Oil prices expected to remain high New Sources available mainly in harsh environments

Oil and Natural Gas Corporation Ltd., India

Perspective
Technologies to push recoveries from aging fields Look for acreages abroad Huge Infrastructure Growth supported by Institutions Increased R&D efforts for alternatives

Oil and Natural Gas Corporation Ltd., India

Some Core Strategies for India

Moderate the demand through improved efficiency Expand and Diversify supplies from non conventional sources Partnering Global Energy Security Fast Track Technology Initiatives to improve recovery and explore harsh environments

Oil and Natural Gas Corporation Ltd., India

the next stop for India

Population

Oil, why not ?

Thanks
Oil and Natural Gas Corporation Ltd., India