Pre-Feasibility Report for Development Drilling NELP Block ...
New Exploration Licensing Policy - NELP - Particpations / Discoveries - Past & Present Scenario...
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Transcript of New Exploration Licensing Policy - NELP - Particpations / Discoveries - Past & Present Scenario...
OVERVIEW
Introduction of NELP
Main Features of NELP
Pre – NELP conditions
Rounds of NELP
Comparison
Future Vision
Conclusion
INTRODUCTION NELP provides a level playing field in which all the
parties may compete on equal terms for the award ofexploration acreage.
GOI announced NELP in 1997-98 budget.
It took 2 fiscal years and 2 successive government tofinalize.
The tax incentive promised to prospective investors.
After several go and halt signs by GOI, NELP finally gotUnderway in 1999.
MAIN FEATURES OF NELP
Fiscal stability provision in the PSC (ProductionSharing Contract ).
No signature, discovery or production bonus.
No customs duty on imports.
No mandatory state participation.
No carried interest by National Oil Companies (NOC).
Freedom to the contractor for marketing of oil & gasin the domestic market.
MAIN FEATURES OF NELP
No cess on crude oil production.
Royalty to be paid on crude oil & natural gas on
Volume basis.
Income tax holiday for 7yrs from start of
commercial production.
OBJECTIVES OF NELP ROUNDS
Intensive exploration of Indian basins.
Opening up of acreages in ultra deep water &frontier areas.
To stimulate & promote interest and activity froma wide range of E & P players.
To bring-in new & state of art technology inexploration & exploitation.
Level playing field to all participating companies.
Transparent Bid Evaluation system .
CHANGING SCENARIO
7
1990 2 Companies
3 Producing Basins
2000 12 Companies
7 Producing Basins
2007 24 Companies
10 Producing Basins
19451 Company
1 Producing Basin
NELP SCENARIO 1945 : Burma Oil Company in Assam Shelf area
1990 : ONGC & OIL
Basins : Assam Shelf , Cambay and Bombay High
2000 : ONGC, OIL, CairnEnergy, GSPC, Essar, HOEC, Moscbacher, Okland, Poenix, Hardy, Canoro, Premier Oil,
Basins : Assam Shelf, Cambay, Bombay High, Cauvery, KG, Assam Arakan Fold bed, Jaiselmer
2007 : ONGC, OIL, CairnEnergy, GSPC, Essar, HOEC, Moscbacher, Okland, Poenix, Hardy, Canoro, Premier Oil, RIL, Enpro-Finance, Gazprom, Jubiliant Oil & Gas, Geo Petrol, ENI, Niko, Focus, Santos, Petrogas, Naftogaz, PrizePetroleum,
Basins : Assam Shelf, Cambay, Bombay High, Cauvery, KG, Assam Arakan Foldbed, Jaiselmer, Barmer Sanchor, KG Deep Water, NEC
PRE INDEPENDENCE 1866-1947
Oil exploration in India commenced in 1866 when Mr.Goodenough of McKillop Stewart company drilled awell near Jaypore near upper Assam.
First commercial oil discovery in 1889 at Digboi.
1893 rights were granted to Assam oil syndicated toerect a refinery and led to formation of Assam OilCompany (AOC)in 1899.
1947-1960
After independence GOI realized the importance of Oil& Gas and framed Industrial Policy Statement of 1948.
Top priority for development of Petroleum Companies.
Indo-Stanvac Project a JV between GOI and StandardVaccum Oil Company of US in 1953 gave the first oildiscovery of independent India near Nahorkatiya.
1947-1960
In 1955 GOI established ONGD (Oil and Natural Gas Directorate) with the help of GSI (Geological Survey of India).
From 1958 ONGC started its exploration in:
1. Himalayan Foothills – Ganga Plains
2. Alluvial tracks of Gujarat
3. Upper Assam and West Bengal
4. Cambay Basin
1961-1991
1962 experimental seismic surveys were carried out in Gulf of Cambay.
Also western offshore survey details resulted in Bombay offshore India’s biggest commercial discovery.
In 1990 commercial oil discoveries by OIL in Rajasthan.
And Assam in 1991.
HISTORY OF PRE-NELP ROUNDS
Exploration bidding rounds started in 1979
The initial rounds were not successful.
1st four rounds – 12 years (1979-1991)
Next five rounds in 2 years (1994-1995)
ROUNDS OF EXPLORATION
1st Round of Exploration – 1980 – 32 Offshore blocks
2nd Round of Exploration – 1982 – 50 Onshore and Offshore blocks
3rd Round of Exploration – 1986 – 27 Offshore
4th Round of Exploration – 1991 – 72 Blocks (39 Offshore & 32 were Onland)
5th & 6th Round of Exploration - 1993 – 45 Blocks
7th & 8th Round of Exploration – 1994 – 45 Blocks
POST INDEPENDENCE & PRE NELP ERA
Discovery of Naharkotiya in NE in 1953 Ankleshwar in Cambay Basin in 1958 Mumbai High in Mumbai Basin in 1972 Cauvery in 1958 (Karaikal-1) Jaiselmer sub-basin in 1958 (Manhertibba-
1) Assam-Arakan yoma fold belt in 1973
(Baramura-1) Krishna-Godavari in 1982 (Narsapur-1)
Number
Blocks offered 379
Bids received 148
Contract signed 28
PRE NELP
0
100
200
300
400
Blocks offered Bids received Contract
signed
Number
Number
•Pvt. Companies felt that the incentive structure designs were not attractive for the higherperceived risk
•Inordinate delays in awarding contracts (up to 2-3 yrs)
•After signing contracts, it took years to obtain clearances from various agencies of the GOI &State Govt. to go ahead to start the operations
NELP I– JANUARY 8, 1999Number
Blocks offered 48
Bids received 45
Contract signed 24 0
10
20
30
40
50
Blocks offered Bids received Contract
signed
Number
Number
World class gas discovery by RIL-NIKO in 2002 in KG off shore
block
Cairn energy’s discovery in KG deep water block
Gas discovery by RIL in Mahanadi shallow water block
NELP II – 2000Number
Blocks offered 25
Bids received 44
Contract signed 230
10
20
30
40
50
Blocks offered Bids received Contract
signed
Number
Number
3 Discoveries were made in Cambay Basin GSPC discovered OIL &
NIKO discovered natural gas
NELP III – 2001Number
Blocks offered 27
Bids received 52
Contract signed 23
0
20
40
60
Blocks offered Bids received Contract
signed
Number
Number
GSPC - jubilant - GGR consortium made world class gas discovery in KG
( KG-OSN-2001/3) offshore block in June, 2005
NELP IV – 2003Number
Blocks offered 24
Bids received 44
Contract signed 20
0
10
20
30
40
50
Blocks offered Bids received Contract
signed
Number
Number
Provision of fast track arbitration
Higher weightage for technical and financial viability of deep water
block
Surcharge on foreign companies abolished
Bank guarantee to be returned after completion of MWP
NELP V – 2005Number
Blocks offered 20
Bids received 69
Contract signed 20
Workstations were provided in data centers in London, Houston, Calgary & Dubai to facilitate companies
to review and analyze data.
Govt. decided to take its profit share of natural gas in cash or kind for a block of 5yrs instead of such
option being made every year.
Co.’s with net worth US $500million or more not required to give bank guarantee towards MWP
commitment as against the threshold limit of US $ 1 billion earlier.
0
20
40
60
80
Blocks offered Bids received Contract
signed
Number
Number
NELP VI – 2006Number
Blocks offered 55
Bids received 165
Contract signed 19
Check on aggressive/speculative bidding
• Uniform seismic coverage of basins
• Participation of E&P companies with global experience
– Induction of new technology
– Global knowledge
– Better geological models
– Better E&P practices
• Better Government take
0
50
100
150
200
Blocks offered Bids received Contract
signed
Number
Number
NELP VII
Approximately 50 to 60 blocks have been identified forthe offering.
Rajasthan Basin, Cambay Basin, Himalayan Foreland &Punjab Basin, Ganga Basin, Kutch Basin, SaurasthraBasin, Vindhyan Basin, Mumbai Offshore Basin, Kerala-Konkan Basin, Purnea Basin, Bengal Basin. MahanadiBasin, Krishna – Godavari Basin, South RewaBasin, Palar Basin, Assam – Arakan Basin, DeccanSyneclise, Cuddapah Basin, Andaman Basin.
Expected Blocks
Onland : 40-45
Shallow Water : 13-15
Deep Water : 20-25
Total : 73-85
NELP ROUNDS OVERVIEW
Blocks
offered
Bids
received
Contracts
signed
Pre - NELP 379 148 28
NELP I 48 45 24
NELP II 25 44 23
NELP III 27 52 23
NELP IV 24 44 20
NELP V 20 69 20
NELP VI 55 165 19
NELP – A SUCCESS STORY
48
2425
23
27
23 24
20 20 20
55
52
0
10
20
30
40
50
60
NELP-I
(1999)
NELP-II
(2000)
NELP-III
(2002)
NELP-IV
(2003)
NELP-V
(2005)
NELP-VI
(2006)
Blocks Offered
Blocks Awarded
% of success increased with every NELP round NELP V had 100% success at
this point after receiving 100% we decided to increase the blocks on offer and
met with 95% success straightaway in NELP VI
COMPARISON
COMPARISION
Pre-NELP
(1993 –2006)–13 Yrs.
NELP-I, II & III, IV,V
(2000-06)-6 Yrs.
2D Seismic Survey (LKM) 24,091 1,09,305
3D Seismic Survey (SKM) 5,304 67,773
Exploratory Wells (No.) 167 93
PSC Blocks 28 138
No. of Discoveries
(Up to 15-04-2007)
25 40
Investment made on Exploration
(US$ Million)
781.65 1451.18
FUTURE OF NELP
Out of 90 blocks under exploration only a few of theblocks are explored through drilling
Hydrocarbon potential of many blocks yet to beassessed by drilling
Last Seven years of NELP opened up new areas forhydrocarbon occurrence
Confidence build-up in discovering more & more oiland gas in new areas
Very high chances of discovering much morehydrocarbons in country
CONCLUSION
NELP is a success.
India is highly under /unexplored
Possibility of striking of rich oil and gas reserves inpoorly explored /unexplored older sediments quitehigh.
Need for acquiring geo-scientific data across the country
Integration of entire geo-scientific data for bettergeological understanding of regional & localprospectivity.
SOURCES
Directorate General of Hydrocarbons
Paper on E&P Licensing Policy –
PETROFED , Price Water House Coopers
(Knowledge Partners)
MoPNG