India Event Showcasing E&P Opportunities. A Preview into India Policy & E&P Opportunities - Open Acreage Licensing Blocks, Bidding Process and DSF

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1 DGH India Event Showcasing E&P Opportunities A Preview into India Policy & E&P Opportunities - Open Acreage Licensing Blocks, Bidding Process and DSF Ranajit Banerjee November 15, 2017 Head (HELP), Directorate General of Hydrocarbon

2 Contents 1 India s Energy Outlook 2 India s Hydrocarbon Potential 3 HELP 4 Discovered Small Field Bid Round 5 Open Acreage Licensing Programme 6 Investments in mature fields 7 Anticipated Investments in the sector 8 NDR, EOI and Bidding Portal Manual

3 MMTOE MMTOE India Outlook Historic Oil and Gas Demand Supply Balance Rising Import dependence for meeting oil and gas demand huge opportunity 2000 Total Future Energy Demand Outlook % Total Consumption (O+OEG) Source: BP Statistical Review 2017, BP Energy Outlook, Country and Regional Insights - India Renewables (including biofuels) Hydro India imports ~80% of its oil and ~50% of its gas requirement By 2035, India is likely to be among the fastest growing oil markets, with demand almost doubling to ~10 million barrels per day and gas demand is expected to more than triple over the same period Hon ble Prime Minister has set a goal of 10% reduction in oil & gas imports by 2022

4 India s Hydrocarbon Potential 3.14 Million Sq. Km. of area spread across 26 sedimentary basin Latest Study indicates hydrocarbon prognosticated resources of 41,872 MMTOE for 26 sedimentary basins and Offshore areas Discovered HC resources: 12,076 MMTOE Undiscovered HC resources estimate: 29,796 MMTOE About 49.1 % Increase in HC Resources estimates as compared to the earlier study undertaken in Category I: Proven Commercial Productivity Category II: Identified Prospectivity Source: DGH, study is under finalization, HC estimates indicated are subject to approval Category III: Prospective Basins Category IV: Potentially Deepwater Areas Pre-Cambrian Basement- Tectonised

5 HELP A growth catalyst for E&P sector In order to meet PM Modi s vision of reducing India s oil dependence by 10% by 2022, GoI has introduced a slew of policy reforms across O&G value chain Operationalization of National Data Repository (NDR) One Stop Shop for Indian E&P Data New revenue sharing contract, reduced regulatory burden and other fiscal incentives under HELP Open Acreage Licensing (OAL) Programme - opened up 90% of sedimentary basinal area (2.8 Million Sq. Km.) to global investors Aims to Create Investor Friendly Ecosystem Improved Market Access - Full Marketing and Pricing Freedom under HELP / DSF Plans for Indian Gas Trading Hub Discovered Small Field Bid Rounds Round I concluded with 30 contracts awarded Policy for reducing regulatory burden & contractual inflexibility in PSC regime

6 Opportunity under Discovered Small Fields Rounds DSF-I bid round has been a huge success with total 30 contract areas awarded DSF- II Round 60 Fields 23 Onland 37 Offshore Proposed Fields Offered Onshore: 23 Offshore: 37 Initial inplace volumes Over 195 MMTOE Adjoining Facilities of ONGC and OIL Bidders can access well head equipment, surface and nearby facilities on chargeable basis These fields may be clubbed for the selection of contract areas to be offered Kutch Offshore: 01 (0.1 MMT) Cambay Onland: 05 (10.1 MMT) Cambay Offshore: 01 (5.0 MMT) Mumbai Offshore: 22 (97.6 MMT) Rajasthan: 02 (1.9 MMT) KG Onland: 08 (1.1 MMT) KG Offshore: 07 (55.3 MMT) NEC Offshore: 06 (16.5 MMT) Assam: 08 (7.1 MMT) The exact fields and related data shall be provided in Round II Bid Document expected to be notified by Q and is subject to approval)

7 Areas Offered under OAL Zone I: Sufficient data for 0.7 million sq. km. Zone II & III: Moderate to Sparse Data for 2.14 million sq. km. Bidders can carve out their own blocks (min 10 by 10 Grid, ~336 Sq. Km) 2.84 million sq. km. Area is offered across 26 Sedimentary Basin under OALP Two types of Investment Opportunities available under OAL Petroleum Operations Contract (All zones) Reconnaissance Contract (only in Zone II & III) Data available on NDR * Area offered includes 7 producing areas 1.75 million LKM of 2D seismic data 0.64 million SKM of 3D seismic data 13,650 well log data Note Min. 1 X1 Grid allowed for adjoining areas to existing blocks and areas where it is not possible to carve 10 X10 Grid

8 Open Acreage Licensing Carve out blocks for Investor studies G&G data Reconnaissance or Petroleum available on NDR Operations Submission of EOI by Originator round the year Bid Submission and Award of the Contract Evaluation Finalization of Block & Issue of Notice Inviting Offer Reconnaissance Contract Petroleum Operations Contract Exploration activities including seismic surveys and drilling of wells Contract Period: (2+1) years Right to lease data for period of 12 years Reconnaissance Contracts are exclusive but contractor can allow other parties to conduct survey on its discretion Blocks carved out on the basis of various EOIs received Exploration Period of 8 & 10 years for onland/shallow water and deepwater/ frontier blocks respectively Development Period of (20+5+5) years Marketing and Pricing Freedom Defined timelines for exploration, appraisal and development

9 Key OAL Timelines for Investors Timeline (Closing Dates) Key Milestones Window 1 Window 2 15 th Nov 15 th May 31 st Dec 30 th June 1 st Jan 31 st Mar 15 th May 7 th Jun 1 st July 30 th Sep 15 th 7 th Dec Nov 1 Last Date of EOI Submission Timing is critical to avail originators incentive Investors have two windows for submission of EOIs 2 Finalization and Review of EOI Issue of Bid Document Bid Submission Deadline Bid Evaluation and Award (on or before) Contract Signing (on or before) First EOI cycle to be closed by November 15, 2017 As of now, around 51 blocks likely to be offered for competitive bidding by 31 December 2017 To submit EOIs, investors can access Link: DGH to Evaluate EOIs and Issue Bid within 1.5 months Carved out contract areas available for bidding to all parties (2 months) Contract signing and post-award facilitation by DGH

10 Upcoming Investment Opportunities under OAL EOIs received so far under 1 st Cycle 55 EOIs submitted for Area of ~64000 Sq. Kms. 20% 2% 78% Onland Shallow Water EOI Received for Onland Basin: 45 Rajasthan: 09 Krishna Godavari: 03 Cambay: 12 Cauvery: 01 Assam-Arakan: 19 Kutch: 01 Ganga: 01 Himalayan Foreland: 01 EOI Received for Shallow Water Basin: 07 Kutch: 01 Saurashtra: 02 Cauvery: 01 Mumbai Offshore: 02 Krishna Godavari: 01 EOI Received for Deepwater Basin: 01 Krishna Godavari: 01 Note: For the EOIs received, the bids shall be invited starting January and the bid closing date shall be March 31, 2018 thereby providing adequate time to participate

11 Bid Parameters Revenue Share Petroleum Operations Contract Biddable Work Program Originator Incentive Bidders to quote government share at both Low Revenue Point (LRP) and High Revenue Point (HRP) percentage share to be linearly interpolated between the two points Bidders to quote for 2D seismic, 3D seismic, Exploratory wells, core analysis. Originators to be assigned incentive marks on a First Come First Served Basis 50% 45% 5% Stabilisation period of two, three and five years is provisioned for onland, shallow water and deepwater blocks respectively wherein Revenue share will be fixed at LRP regardless of Daily Revenue For Reconnaissance Contract, 70 marks is for biddable work program (2D, 3D, exploratory wells), 25 marks for Data Price and 5 marks for Originator Incentive

12 Upcoming Investment Opportunities other than OAL and DSF Induction of Technology for mature fields Some of the declining fields require infusion of technology, capital and best-in class management practices to unlock significant discovered HC potential Government working on a policy for Nominations fields The purpose is to maximize production by encouraging private and foreign investments and best-in class technologies Currently, an area of 61,851 Sq. Kms. is under nomination regime Current annual production (from Nomination fields) 25.6 MMT of oil and 24 BCM of gas (@ 69% of total Indigenous crude oil and 75% of total domestic gas production)

13 Investment anticipated in E&P Sector A cumulative investments of ~USD 40 billion is expected in Indian E&P Sector in near term (4-5 years). Considering a D/E ratio of 70:30, the total debt and equity requirement would be of the order of USD 28 billion and USD 12 billion respectively Total Investment requirement of USD 25.2 billion under PSC regime Of this, FDPs worth USD 13.6 billion are already approved and investment worth USD 11.6 billion have declaration of commerciality Estimated Investment of USD 100 Million for development of 30 contract areas awarded under Round 1 of DSF PSC Regime DSF - I DSF-II OALP Estimated Investment of USD 300 million for development of 61 fields under Round 2 of DSF Under OALP, USD 5-6 billion in exploration activities and another USD billion for development activities is expected in the near term.

14 Accessing Geoscientific Data from NDR Register at NDR site Login with your NDR credentials and the Landing Page will be as given below: Exploring NDR Database

15 EoI Submission Portal 1 Register at HELP EoI Submission Portal 2 An automated on your registered will be provided with your login credentials 3 After Login, applicant will land up on the below page and can submit Expression of Interest (EOI) List of EoIs submitted by applicant List of EoIs submitted by other applicants other applicant Search Box

16 E-Bidding Portal for RC and POC Home Page (E-Bidding Portal) Registration and Login Credentials Generation Bids submitted for various offered areas Areas on Offer for Bidding

17 Requirement for bidding through E-Bidding Portal 1 Class 3 Digital Signature Bids are signed and encrypted using Class 3 Digital Signature. 2 Requisite Documents as per NIO Pre-qualification, Technical Details and other Documents (including Operatorship Experience, Acreage Holding and average annual production, Net Worth Certificate, Incorporation Certificate, Audited Financial Statements and Other Relevant Documents) need to be submitted online and in hard copy. 3 Bid Components Bid components (CWP & revenue share) to be furnished online. 4 Tender Fee Tender Fee shall be paid through online payment gateway. 5 Bank Guarantee Scanned copy of Bank Guarantee of requisite amount needs to be submitted online and in hard copy.

18 Flow Chart for submitting bid on E-Portal Register and Login as Individual Company and form Consortium Show Interest in Blocks of Specific Tender with prioritization matrix Online PQC Check (Initial check for Technical & Financial criteria based on mandatory requirement) 5 4 Bid Submission Financial/Net Worth Check as per the committed work programme of the bidders 6 Bid Evaluation Technical Pre-Qualification Financial Evaluation CWP and Fiscal Package 7 Award of Contract Block Allocation as per the available Net Worth and submitted priority matrix

19 Thank You Thank You Directorate General of Hydrocarbons (Under Ministry of Petroleum & Natural Gas) Phone: , Fax: Website: dghindia.gov.in DGH DGH India