Oil reserves4.5 billion barrels
Oil production869,000 bopd
Gas reserves1.3 tcm
Gas production27.5 bcm
India: Demand for Investment
India’s fast-growing population and thriving economy fuel rapid expansion in domestic energy demand, which skyrocketed over the past 15 years. In 2015, India surpassed Japan as the world’s third largest consumer of crude oil. India is a net importer of hydrocarbons. The country produced 869,000 bopd on average in 2018, down from 884,000 bopd in 2017. India’s oil reserves stood at 4.5 billion barrels in 2018. On the gas side, reserves stood at 1.3 tcm (45.9 tcf) in 2018. 27.5 bcm (971 bcf) of natural gas was produced in 2018, and new exploration works have taken place in the Krishna-Godavari and Cambay basins over recent years to increase production.
The International Energy Agency (IEA) forecasts India’s total oil products demand to double by 2040, increasing the country’s oil import dependence above 90%. Conscious of the importance of this supply and demand mismatch, the Indian government, along with its chief state-run ONGC, has implemented a new revenue-sharing scheme, in a bid to draw foreign investors. As of 2017, all new contracts have been signed under the HELP (Hydrocarbon Exploration Licensing Policy) regime, a uniform licensing regime based on a revenue sharing model. “Price and marketing freedom are the greatest incentives for an investor. Prime Minister Narendra Modi has put forward the philosophy of minimum government, maximum governance. In line with this philosophy, the government wants to get away from the day-to-day monitoring of businesses,” Dharmendra Pradhan, India’s minister of state for petroleum and natural gas, told TOGY.
Most of India’s oil reserves are located in the west of the country, in particular in the western offshore region near Gujarat and Rajasthan. The Assam-Arakan basin, in India’s northeast, is also an important oil-bearing area. These regions contain mature fields where production is currently declining, although enhanced oil recovery and redevelopment projects are underway to increase production.
In recent years, both local and foreign companies have been investing in new, smaller oilfields to offset the declines in production in these mature basins. Major discoveries in Rajasthan’s Barmer Basin and the offshore Krishna Godavari Basin also have the potential to diversify production. In July 2016, the Ministry of Petroleum and Natural Gas launched a bidding round, the discovered small field (DSF) bidding round, which sees 67 fields under 46 contract areas up for bid.
In June 2017, Minister of Petroleum Dharmendra Pradhan announced the country’s first Open Acreage Licensing (OAL) round and unveiled the National Data Repository system, which stores information about 3.14 million square kilometres of acreage. Around 2.7 million square kilometres of sedimentary basins will be made available, and investors will be able to carve out areas from this acreage that will then be put on offer under HELP. In the new database, they would be able to view seismic and production data for both licensed and unlicensed acreage.
By May 2018, 110 bids had been placed for 55 exploration blocks in the round. In August 2018, upstream regulator DGH announced that Vedanta Resources had won 41 blocks, Oil India nine and ONGC two, while Bharat Petroleum Corporation, Hindustan Oil Exploration and gas utility GAIL took one each.
In January 2019, India announced its second OAL round. Eight onshore licences and six offshore licences spanning about 30,000 square kilometres, including a deepwater block, will be put on auction. In February 2019, a third round, OALP III, was opened, including 23 blocks covering 32,000 square kilometres, with 18 blocks based on expressions of interest from companies and five coal bed methane blocks. In July 2019 the Ministry of Petroleum and Natural Gas announced that it had awarded 32 blocks under OALP II and III. In August 2019, the OALP IV round was opened with the offer of seven new areas.
The Oil & Gas Year India 2017 touches on these topics, as the most comprehensive report on the country’s hydrocarbons industry.
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