PLATINUM

5th Newsletter: Hydrocarbons to Fuel the Future

Ministry of Petroleum & Natural GasGovernment of India

PETROTECH-2016, the 12th International Oil & Gas Conference & Exhibition is hosted by the Ministry of Petroleum & Natural Gas, Government of India, in New Delhi from December 5 – 7, 2016. Covering the entire scope of the oil & gas industry and related sectors such as alternative energy, engineering and technology, PETROTECH-2016 is the most important platform for national and international experts and investors across the energy industry to exchange views and share knowledge, expertise and experience. In the weeks preceding the event, PETROTECH’s Committee is pleased to share with you regular industry briefings and updates on its international exhibition and the conference’s program.

PETROTECH-2016, ONLY TWO WEEKS AWAY! As the industry gears up for the biggest energy event of the year, we take a closer look at the confirmed speakers for PETROTECH-2016’s plenary hall.

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For enquiries and assistance please contact:

Rajesh Ahuja

Convenor, PETROTECH-2016SCOPE Complex, Core - 2,7, Institutional Area, Lodhi Road,

New Delhi - 110003, IndiaPhone: +91 11 24368000, 24365000

E-mail: convenor.petrotech2016@indianoil.inWebsite: www.petrotech.in

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6th December 2016

Plenary Session - 3 Theme Session - 1 Theme Session - 2 Theme Session - 3

Time, hrs 14:45 - 16:30 09:00 -10:45 10:45 - 12:30 13:30 - 14:45

Duration 105 min. 105 min. 90 min. 90 min.

Topic Make in India Natural Gas Alternative Energy Talent Management

Theme of Session

India - Manufacturing hub for Hydrocarbon Sector

Natural Gas : Road towards Cleaner and

Prosperous futureBeyond Fossil Fuels

Gearing for Growth: Talent requirements and

expectations

ChairpersonMr. Anil Kakodkar, INAE Satish Dhawan Chair of Engg. Eminence, BARC

Knowledge Partner/Moderator

Mr. Amit Khera, Mckinsey Ms. Mary Hemmingsen,

Global head LNG, KPMGMcKinsey

Mr. Joshua Ross, Associate Partner,

Performance, Talent & Rewards, Aon Hewitt

Speakers

Mr. Dinesh Kumar Sarraf CMD, ONGC

Mr Hamad Mubarak Al Muhanndi, CEO, RasGas

Dr. David H. Turpin - President, University of

Alberta, Canada

Mr. Amitabh Kant - CEO Niti Aayog

Mr. Richard F. Guerrant, VP LNG, ExxonMobil Gas &

Power Marketing Company, Texas

Mr. M K Surana, CMD, HPCL

Mr. Srikanth Balachandran, Group HR Head, Airtel

Mr.Subramanian Sarma, CEO & MD, L&T

Hydrocarbon Engg.

Mr.Vitaly Vasiliev, CEO, Gazprom Marketing &

Trading, Russia

Mr. Sumant Sinha - CEO, ReNew Power Ventures

Pvt. Ltd

Mr. Suresh Bose, Head- HR, Vedanta Resources

Plc

Mr. A.P Sawhney, Addl. Secretary, MoPNG

Dr. Ajay Mathur, Director General, TERI

Mr. Prabhat Singh, CEO & MD, Petronet LNG

Dr. Frank O Sullivan, Director MIT Energy

Initiative, USA

Mr. James Rockall, CEO and Managing Director, World LPG Association,

France

5th December 2016

Plenary Session - 1 Plenary Session - 2

Time, hrs 14:00 - 15:45 15:45 - 17:30

Duration 105 min. 105 min.

Topic Uncertain Oil PricesPolicy & Regulatory

Issues

Theme of Session

Oil price volatility: Challenges & Opportunities

India Rising- Resilience and Reforms

ChairpersonMr. Daniel Yergin, Vice

Chairman, IHSDr. Arvind Panagariya, Vice

Chairman, NITI Ayog

Knowledge Partner/Moderator

Mr. Kaustav Mukherjee, Partner & Managing

Director, BCG

Mr. Deepak Mahurkar, Partner, PwC

Speakers

Mr. Johannes Benigni, MD, JBC Energy Asia

Mr. David Bluemental, Latham & Watkins LLP,

Hong Kong

Mr. Mike Muller VP, Global Oil Trading & Suppl, Royal

Dutch Shell

Mr. B.C. Tripathi, CMD GAIL India

Mr. B. Ashok, Chairman, Indian Oil Corporation

Limited

Mr. Nizar Al-Adsani, Deputy Chairman & CEO, KPC

Mr. Sudhir Mathur, Acting CEO, Cairn India Limited

Mr. Keisuke Sadamore, Director, IEA

Mr. Mohammed Sanusi Barkindo, Sec. General,

OPEC

7th December 2016

Theme Session - 4 Theme Session - 5

Time, hrs 10:30 - 12:00 12:00 - 13:30

Duration 90 90

Topic Upstream Downstream

Theme of Session

Future of Upstream : A techno-managerial

challenge

The Growing prominance of Asian Refining

ChairpersonDr. Fereidun Fesharaki , Founder and Chairman,

FGE (Facts Gloal Energy)

Knowledge Partner/Moderator

Dr. Rahool Panandiker, Partner, BCG

Mr. Paul Sheng, Mckinsey

Speakers

Mr. Simon Flowers, Chairman, Wood

Mackenzie

Mr. Sandeep Poundrik, JS(R), MoP&NG

Mr. Amar Nath, JS(E), MoP&NG

Mr. Sanjiv Singh, Director( R ), IOC

Mr. D. Rajkumar- CMD BPCL

Mr. Prabh Das, CEO, HMEL

Mr. Utpal Bora, CMD , OILMr. Fahad Al- Dihani, Dy. CEO, Mina Al-Ahmadi

Refinery, KNPC

Mr. L.K. Gupta - MD and CEO Essar Oil

Ministry of Petroleum and Natural GasGovernment of India

ORGANISERS

Energizing India over the next decade: Access, Inclusiveness & Sustainability

6-7 December 2016FICCI, New Delhi

Special track on Fuel Retailing: Petrotech 2016

th12 INTERNATIONAL OIL & GAS CONFERENCE AND EXHIBITION

05-07 December 2016, New Delhi, India

Theme: Hydrocarbons to fuel the future: Choices & Challenges

T. K. SENGUPTADirector OffshoreOIL & NATURAL GAS CORPORATION

FY2016 has marked the second consecutive year when ONGC successfully reversed its produc-

tion decline by sustaining production numbers. This achievement is mainly due to a substantial production increase from our offshore assets. ONGC’s do-mestic production dates back to 1961 but jumped off with the discovery of the Mumbai High field in Western Offshore in 1974, from which production start-ed in 1976. Because of their less prolific nature and complex reser-voirs, India’s onshore fields have always yielded less output than offshore assets. Before ONGC struck oil in Mumbai High, India was producing about 6MMT of oil. After offshore produc-tion started in 1976, the output started ramping up quickly, reaching 32MMT in FY1990, out of which 22MMT came from offshore assets. Despite being now a 40-year old asset, Western Offshore still holds huge potential and is set to remain the flag bearer of India’s oil and gas pro-duction. In addition, offshore fields in the East coast, located in deep and ultra-deep water blocks offer additional opportuni-ties for ONGC to boost its offshore pro-duction.

Offshore JourneyThe offshore journey of ONGC through-out these 40 years been full of significant successes and many milestones. Though offshore exploration efforts were start-ed way back in the 1960s, it was only in 1974 that oil was struck in the Mumbai High Field. Following the discovery, the field was brought on-stream in July 1976, in a record time of only two years and a few months. Thereafter, ONGC contin-ued adding new fields like Heera in 1982, Neelam in 1990, the giant Bassein gas field in 1988/1989 and eventually a number of small marginal fields from the late 1990s onwards. The efforts put in the development of In-dia’s offshore industry have been signifi-cant given the very nascent nature of the oil & gas industry in India in the 1970s.

ONGC’s fields in Western Offshore, however, have been no exception to the natural production decline that affects all ageing and maturing fields. From the 2000s onwards, ONGC undertook sever-al technological interventions and rede-velopment schemes to offset production decline from Western Offshore. These interventions notably include new drill-ing and well completion technologies, de-viated wells with high angle to target the oil bypass, horizontal wells targeting thin layers, segmented and intelligent comple-tions, well stimulation with retarded and diversified acid systems, etc.

According to ONGC’s offshore rede-velopment programs, the company drilled additional wells, installed new platforms,

laid new pipelines and deployed a host of new technologies in its reservoirs. These efforts have resulted in the successful arrest of production decline, and helped ONGC sustain its production volumes in the absence of major discoveries. The production decline from offshore fields, which is in the order of 7 to 8% has come down to 2.5 to 3%. ONGC’s offshore production stood at 16MMT of oil and 17bcm of gas in FY2016, and remains the backbone of the company’s domestic

production. ONGC’s offshore fields con-tinue to hold the promise of considerable recoverable oil and gas volumes with a recovery factor up to 45% with the right technology, up from the current 35%.

The Future Of Gas As India gradually shifts to a gas-based economy, ONGC has a huge potential of supplying the country with domestically produced gas from offshore fields. The company has lined up huge investments to develop its gas finds, under both stand-alone and cluster-based approaches.

When ONGC discovered the giant Bassein sour gas field and started produc-tion in 1988/89, the industry recognised the importance of gas as the next “alter-nate” fuel option. The field happens to be amongst the largest sour gas fields in the world and we leveraged on this tremen-dous gas opportunity to create world-class facilities comprising of platforms, compressors and pipelines to bring gas

to the India shores to feed the country’s industrial development. With the Bas-sein gas field on stream, gas production started picking up, from about 16-17bcm in the early 1990s to around 24bcm in the early 2000s. We have maintained a production volume of around 22bcm un-til now. Bassein, along with other small offshore fields in its vicinity, is serving as India’s gas-hub. Several additional off-shore fields were developed and put on production after Bassein, notably the Da-man gas field whose potential is compa-rable to that of Bassein. When completed in 2018, the development of the Daman gas field shall bring cumulative gas vol-umes of around 27bcm by FY2035. Put together, our main gas projects of Bas-sein, Vasai Additional Development and Daman Development projects will give an additional cumulative gas volume of around 47bcm.

The future of offshore gas produc-tion is now also shifting east. Production from the G1 deep-water field started in 2014 and output ramping efforts are un-derway, along with other fields under de-velopment like Vasistha and S-1 in which we have invested close to $1 billion. These latter developments shall bring an addition 16bcm of gas production vol-umes from 2017 onwards for the entire field lifecycle. In March 2016, ONGC an-nounced a $5.076 billion investment to

develop portions of its prolific deep-wa-ter fields in the KG-DWN-98/2 fields. Upon completion in 2020, the develop-ment will give cumu-lative gas volumes

of around 50bcm of gas and 23MMT of oil during the field life cycle. By the end of 2016 ONGC will also finalise the field development plans of several other small deep-water fields under a cluster devel-opment.

Boosting ProductionAs India aims at decreasing oil import de-pendence by 10% by 2022, there is a huge expectation from ONGC to increase domestic production and reduce the de-mand/supply gap for oil and gas. In this regard, our 3 ongoing redevelopment projects of Mumbai High North and Mumbai High South Phase III, Neelam and Heera are expected to yield cumu-lative incremental volumes of about 17MMT of oil and 14bcm of gas during their project life. To date, 30 new wells have already been drilled in Mumbai High Redevelopment Phase III, which has started production.

ONGC is pursuing several major development, re-development and additional develop-ment projects such as these across its assets, both offshore and onshore. In our efforts of sustaining production levels and exploiting fields potential, we face

challenges on three different fronts. The first challenge is to arrest production de-cline, which averages 7% across ONGC’s domestic fields. The second challenge is the viability and feasibility of sustaining production, amidst a low oil prices re-gime, from ageing oil and gas fields that require infusions of cost-intensive tech-nology. The last challenge is the addition of production numbers in the short to medium-term by monetising small and marginal reserves.

ONGC’s recent successes and achieve-ments in arresting production decline and addition of new gas volume have giv-en us the confidence that with the right kind of technology intervention and con-tinuous support from the government on different new policies in this sector, the future is bright for the country’s offshore oil and gas industry.

In FY2016, ONGC’s domestic production was 22.38MMT of oil and 21.188bcm of gas, representing 70% and 60% respectively of India’s oil and gas production. The majority of this production comes from ONGC’s Western Offshore asset. ONGC’s Offshore Director, T. K. Sengupta, tells EYE ON about the firm’s off-shore success story and charts the road ahead for the company.

Beyond the Sea

The production decline from offshore fields, which used to be in the order of 7

to 8% has come down to 2.5 to 3% in last couple of years.”

Owned Hired Remarks

Deepwater Rigs (floater) 2 1 All wells in India's East coast

Shallow water rigs (development and side track)

8 33 Western Offshore

Offshore vessels (PSV, OSV, AHTS, Crew boat)

8 57

Multi-support vessels 4 -

Well simulation vessels 2 -

ONGC’s Offshore Assets as of September 2016

Source: ONGC

Raniganj East CBM Block

Manish MAHESHWARICEO, Exploration & ProductionESSAR OIL

India’s biggest CBM producing asset with current production of 1.17mmscmd as of October 2016

Private operator Essar Oil targeting production of 3mmscmd by FY2018

Cumulative investment of about $500 million made in the block so far, with ad-ditional $100-$150 million planned to boost output

330 wells drilled as of October 2016 with 363 development wells planned during the current phase

While Essar Oil sold its down-stream business for $12.9 bil-lion in October 2016 with what

is now India’s single largest FDI to date, the company has retained its exploration & production portfolio. Essar Oil’s pres-ence in the upstream sector is significant as the company is India’s biggest CBM producer and is setting the path for In-dia’s future unconventional develop-ments.

CBM Development The production-linked payment (PLP) contract for Essar’s RG(East)-CBM-2001/1 block in West Bengal was signed in July 2002 in order to develop the block’s reserves. The acreage was awarded under India’s first CBM bidding round in 2001. “Raniganj East is a world class asset with CBM reserves in excess of 1Tcf, with 25-30 years of field life,” Es-sar Oil’s E&P CEO Manish Maheshwari told EYE ON.

Raniganj East became the first CBM block in India to achieve production of 1mmscmd in June-July 2016. While cur-rent production at 1.17mmscmd as of October 2016, Essar intends to bring output up to 3mmscmd by FY2018. An additional $100-$150 million investment is planned, on top of the $500 million (Rs. 3,300 crore) the operator already put into the block’s development. Matix Fertiliz-ers & Chemicals, located at Panagarh (West Bengal), and one of the largest single stream urea plants in the world, is the anchor customer for CBM. The urea plant’s expansion ensures continuous demand for Essar’s gas.

As of October 2016, 300 wells had been drilled. The current development phase includes the drilling of 363 de-velopment wells, to be followed by in-

fill wells during the project’s life cycle. “Technology and talent has helped us at Raniganj to reduce environmental foot-prints,” Maheshwari explained to EYE ON. “Use of compact rigs, drilling mul-tiple extended-reach-directional wells from a single pad, recycling of produced water for fracking, and customising frack fluids predominantly with natural prop-pants are steps which we have taken to reduce environmental impact. We are able to do more with less and our team strives for continuous improvement on this dimension.”

An unconventional story More than a mere example of a success-ful CBM development in a country where only 8 of the 33 awarded CBM blocks since 2001 have reached development or exploration phases, Essar’s opera-tions at Raniganj show the potential of India’s unconventional industry. “Uncon-ventional holds the potential to be the new conventional,” Maheshwari told EYE ON. “India has untapped potential in unconventional plays: CBM, shale, tight reservoirs. The new Hydrocarbon Ex-ploration Licensing Policy is expected to help unlock this potential, which several studies have assessed. As an order of magnitude, the CBM resources in India are estimated to be 40 to 50Tcf. EIA re-ports also indicate shale gas resources in India to be in the range of 60 to 100Tcf.”

Following in the footsteps of Essar Oil, India’s CBM industry is now set to benefit from addition developments from both private operators such as Reliance Industries and Great Eastern Energy Corporation, as well as state-owned ONGC who approved a $98 million de-velopment plan for its Bokaro CBM block in FY2016.