Ministry of Petroleum and Natural Gas, Government of India. Opportunities In Indian E&P Sector

Transcription

1 Ministry of Petroleum and Natural Gas, Government of India DGH Opportunities In Indian E&P Sector Directorate General of Hydrocarbons Interactive Meet October 26, 2017 Mumbai

2 Agenda 1 India s Energy Outlook 2 India s Hydrocarbon Potential 3 HELP 4 Discovered Small Field Bid Round 5 Open Acreage Licensing Programme 6 Production Enhancement Contract 7 Key Success Stories 2

3 India s Energy Outlook India is 3 rd largest energy consumer despite a low per capita energy consumption Primary Energy Consumption (MMTOE) China (3,053) Rest of the 23% World (6,108) 46% US (2,273) 17% Future Demand Outlook India s Primary Energy Consumption (MTOE) +129% 1, Japan (445) 3% Russia (674) 5% India (724) 6% Source : BP Statistical Review 2017, BP Energy Outlook, Country and Regional Insights - India 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 3

4 India s Hydrocarbon Potential 3.14 Million Sq. Km. of area spread across 26 sedimentary basin Category I: Proven Commercial Productivity Category II: Identified Prospectivity Category III: Prospective Basins Category IV: Potentially Prospective Deepwater Areas Pre-Cambrian Basement- Tectonised Sediments Source: DGH, study is under finalization, HC estimates indicated are subject to approval 4

5 HELP A growth catalyst for E&P sector Hydrocarbon Exploration and Licensing Policy (HELP) Open Acreage Licensing Discovered Small Fields Salient Features Revenue Sharing Model Full Marketing & Pricing Freedom Fiscal Incentives Unified License for all type of Hydrocarbons Freedom to carve out blocks National Data Repository 5

6 India now offers Its entire Sedimentary Basins under the New Policy Regime with several attractive features through Discovered Small Fields Bid Round Open Acreage Licensing Program Operating Mature Fields of NOCs 1 st Round Concluded Petroleum Operations Contract (POC) Production Enhancement Contract (PEC) Second Round to be launched soon Reconnaissance Contract (RC) Opportunity for Juniors, Independents and startup explorers Opportunity for all (Juniors, Independents, IOCs, NOCs, Service Cos.) Opportunity for Medium to Large Scale explorers, Service & Technology Co s 6

7 Discovered Small Field Bid Round II DSF 1 bid round has been a huge success with total 30 contract areas awarded 61 Fields 24 Onland 37 Offshore Proposed Fields Offered Rajasthan fields 2 Reserves 1.9 Mmtoe Assam fields 9 Reserves 8.6 Mmtoe Initial inplace volumes Adjoining Facilities of ONGC and OIL Over 196 MMTOE Bidders can access well head equipment, surface and nearby facilities on chargeable basis Gujarat fields 7 (2 offshore) Reserves 15.2 Mmtoe Mumbai fields 22 (all offshore) Reserves 97.6 Mmtoe 61 fields expected to be offered Andhra Pradesh fields 15 (7 Offshore) Reserves 56.4 Mmtoe These fields may be clubbed for the selection of contract areas to be offered 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

8 Areas Offered under OAL Data Available on NDR 1.72 million LKM of 2D seismic data 0.61 million SKM of 3D seismic data 11,600 well log data 2.84 Million Sq. Km 0.7 Million Sq. Km Bidders can carve out their own blocks (min 10 by 10 Grid ~336 Sq. Km) Total Area offered across 26 Sedimentary Basin Zone I (Sufficient Data) 2.14 Million Sq. Km Zone II & III (Moderate to Sparse Data) * Area offered includes 7 producing areas Zone I is available for Petroleum Operation Contract only Zone II & III are available for Reconnaissance Contract and Petroleum Operation Contract Note Min. 1 X1 Grid allowed for adjoining areas to existing blocks and areas where it is not possible to carve 10X10 Grid 8

9 Open Acreage Licensing Investor studies G&G data available on NDR Carve out blocks for Reconnaissance or Petroleum Operations Submission of EOI by Originator round the year Award of the Contract Bid Submission and Evaluation Finalization of Block & Issue of Notice Inviting Offer Reconnaissance Contract Exploration activities, surveys and drilling of wells is covered Contract Period: (2+1) years Right to lease data for contract period of 12 years Reconnaissance Contracts are exclusive but contractor can allow other parties to conduct survey on its discretion Petroleum Operations Contract 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

10 OAL Timelines Timeline (Closing Dates) Key Milestones Window 1 Window 2 15 th Nov 15 th May 15 th Dec 15 th June 16 th Dec 16 th June 15 th Mar 15 th Sep 15 th Apr 15 th Oct 31 st May 30 th 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 DGH to Evaluate EOIs and Issue Bid within 1 month Issue of Bid Document Bid Submission Deadline Bid Bid Evaluation and and Award (on (on or or before) Contract Signing (on or before) EOI submission is managed through a transparent e-portal easily accessible by Investors Link: Carved out contract areas available for bidding to all parties (2 months) Contract signing and post-award facilitation by DGH EOI submission is a constant process and the window for submission will be open for investors round the year 10

11 EOIs Received EOI Received for Onland Basin: 44 Rajasthan: 09 Krishna Godavari: 03 Cambay: 10 Cauvery: 01 Assam-Arakan: 18 Gujarat-Kutch: 01 Ganga: 01 Himalayan Foreland: EOIs submitted for Area of ~60,000 Sq. Kms. 20% 2% EOI Received for Shallow Water Basin: 06 Gujarat-Kutch: 01 Gujarat Saurashtra: 01 Cauvery: 01 Mumbai Offshore: 02 Krishna Godavari: 01 EOI Received for Deepwater Basin: 01 Krishna Godavari: 01 Onland Deepwater 78% Shallow Water Note: For the EOIs received, the bids shall be invited starting mid December and the bid closing date shall be March 31, 2018 adequate time available to participate 11

12 Bid Parameters Revenue Share Petroleum Operations Contract Biddable Work Program Originator Incentive Bidders to quote Low Revenue Point (LRP) and Higher 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

13 Fiscal Incentives to Bidders Fiscal incentives are provided to investors under the Hydrocarbon Exploration and Licensing Policy (HELP) regime Low graded Royalty Rates (Deepwater areas, in particular) Exemption of Oil Cess and Custom Duty Benefit under Section 42 of Income Tax Act Type of Hydrocarbons Duration Royalty Rates (Oil) Royalty Rates (Natural Gas/CBM) Onland Throughout 12.5% 10% Shallow water Throughout 7.5% 7.5% Deep water Ultra-Deep water First 7 years Nil Nil After 7 years 5% 5% First 7 years Nil Nil After 7 years 2% 2% Royalty Rates applicable under the HELP are one of the lowest when compared to rates levied by various countries globally 13

14 Fiscally Competitive Average Government Take for awarded contract areas 32.3% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other Countries Royalty Government's Share of revenue (%) Total Government Take Source: DGH, OGA, Wood Mackenzie, Note: 1) Royalty rates as applicable 2) Government s Share of revenue based on LRP +5% 3) The total government take does not include corporate / Sales tax The average total government take from the total revenue for the 30 contract areas awarded under DSF Bid Round I is ~32% which is one of the lowest when compared to various other countries 14

15 Production Enhancement Contracts Currently, an area of 61,851 Sq. Kms. is under nomination regime which produces 25.6 MMT of oil and 24 BCM of gas annually - NOCs produce 69% of Indigenous crude oil and 75% of domestic gas Maximize production from mature fields Encourage private & foreign investments Infusion of best-in class management practices Infusion of world class E&P technologies Some of the declining fields require infusion of technology or capital which offers investment opportunities Government plans for a PEC Policy in Nominations fields operated by NOCs. 15

16 Key Success Stories Early exploration done by ONGC & Shell PI transferred from Shell to Cairn Already recovered cumulatively 60 mmt of O + OEG Total Investment US$ 6 Billion Cumulative revenue - US$ 30 Billion Contractor share of profit US$ 10 Billion KG Basin - India s most prolific deepwater gas discovery Awarded to RIL & NIKO in NELP-I BP acquired 30% PI from RIL Already recovered cumulatively 3.7 mmt of Oil and 77.8 BCM of Gas Total Investment US$ 8.9 Billion Cumulative revenue - US$ 13.2 Billion Contractor share of profit US$ 1.2 Billion Other Success Stories - Hazira Panna-Mukta Mid & South Tapti Kharsang Dholka 16

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