Interactive Meet – Mumbai

Directorate General of HydrocarbonsDirectorate General of Hydrocarbons

DGHDGHDGH

Ministry of Petroleum and Natural GasGovernment of India

26 October 201726 October 2017

Our Prime Minister

Major policy reform in the petroleum sector throughthe new Hydrocarbon Exploration Licensing Policy,there will be pricing and marketing freedom and atransparent revenue-sharing methodology. This willeliminate many layers of bureaucratic controls.

- Shri Narendra Modi, Hon’ble Prime Minister at Bloomberg Economic Summit

Our Petroleum Minister

In the next 10 years, India is offering project scope ofUSD 300 billion (in hydrocarbon sector) looking intoour future demand

- Shri Dharmendra Pradhan, Minister of Petroleum and Natural Gas & Minister of Skill Development and Entrepreneurship at India Energy Forum

India is the World’s Fastest Growing Large Economy

FDI USD 321.8 billion

(April 2000-March 2017)

India’s GDP grew 7.1% in 2016-17

7 companies in Fortune 500

(2017 list)

Unemployment rate 3.5% (30 days moving average

June 2017)

Economy Size(FY 2016-17)

USD 2.3 trillion

Population1.3 billion

Second most populous country

Forex Reserves(As on June 16 2017)

USD 381.9 billion

Source: India Soars High, KPMG Report, BSE, Reserve bank of India, World Bank, http://www.tradingeconomics.com/india/unemployment-rate

GDP Share (Advance estimates for FY 2015-16)

Services – 53.4%Industry – 31.2%

Agriculture – 15.3%

Government of India Reforms

Source: KPMG Analysis; http://www.makeinindia.com/about ; sbm.gov.in/; startupindia.gov.in/

Digital IndiaTo create a digital infrastructure as a core utility to every citizen

Start Up IndiaAims at fostering entrepreneurship and promoting innovation by creating an ecosystem that is conducive for growth of Start-ups

Swacch BharatTo accelerate the efforts to achieve universal sanitation coverage

Ease of Doing Business

Make in IndiaDevised to transform India

into a global design and manufacturing hub

05 03

02

04

06

01

Smart CitiesAn urban renewal and

retrofitting program with a mission to develop 100

cities all over the country

To make governance more efficient and effective

India’s Energy Basket

Source :  BP Statistical Review 2017

Coal57%

Oil30%

Gas6%

Hydro4%

Renewables2%

Nuclear1%

0

100

200

300

400

500

2012 2013 2014 2015 2016

MTO

E

0.0

50.0

100.0

150.0

200.0

250.0

2012 2013 2014 2015 2016

MTO

E

24

25

26

27

28

29

30

31

2012 2013 2014 2015 2016

MTO

E

02468

1012141618

2012 2013 2014 2015 2016

MTO

E0

10

20

30

40

50

60

2012 2013 2014 2015 2016

MTO

E

0

2

4

6

8

10

2012 2013 2014 2015 2016M

TOE

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015 2016

Primary Energy Consumption

Source : BP Statistical Review 2017

India’s Energy Outlook

CAGR ~5%

India Oil and Gas Consumption-Production Snapshot

MTO

E

0

50

100

150

200

250

300

0

50

100

150

200

250

1986 1991 1996 2001 2006 2011 2016

Gas Production (MTOE) Gas Consumption (MTOE)

Oil Production (MT) Oil Consumption (MT)

Total Production (O+OEG) Total Consumption (O+OEG)

Source : BP Statistical Review 2017

Widening gap in demand and

supply for oil & gas

Largest consumer of oil and petroleum products in the world

3rd 35.6%Oil and Gas contribution to primary energy consumption in FY16

740 43.3MMT of proven oil reserves

TCF of proven natural gas reserves

Indian Energy Infrastructure

15000 kms. of Petroleum ProductPipeline Network

Source :  PPAC

1

17000 kms ofNatural Gas Pipeline Network

2

Established City Gas Distribution Network across 16 states

3

• More than 22 MTPA of existing LNG re-gasification capacity

• 235 MTPA of refining capacity with private players share of ~40%

India has 26 sedimentary basins covering an area of 3.14 million square kilometres

India has 26 sedimentary basins covering an area of 3.14 million square kilometres

CATEGORY-I BASIN(Proven Commercial Productivity)

CATEGORY-II BASIN(Identified Prospectivity)

CATEGORY-III BASIN(Prospective Basins)

CATEGORY-IV BASIN(Potentially Prospective)

Pre-Cambrian Basement/TectonisedSediments

Sedimentary Basins of India

Assam-Arakan, Cambay, Cauvery, Krishna-Godavari Offshore, Mumbai Offshore, Rajasthan

Kutch, Mahanadi-NEC, Andaman-Nicobar

Bengal, Ganga, Himalayan Foreland, Kerala-Konkan Lakshadweep

Basar, Bhima Kaladgi, Chhatisgarh, Ciddapat, Deccan Syneclise, Karewa, Narmada, PranhitaGodavari, Satpura-S.Rewa-Damodar, SpitiZanskar

Key DiscoveriesFirst Offshore - Bombay High

Source: DGH

KG D6 Basin

Exploration and Production Regime in India

1948

State Monopoly

Nomination Era

Nomination Era

Pre-NELP PSCs

Pre-NELP PSCs NELP/CBM PSCsNELP/CBM PSCs FutureFuture

1991 1997

Beginning of de-regulation

28 producing fields and 28 exploratory blocks offered

including private players

Liberalization of E&P Sector (1997- 2009)

9 NELP and 4 CBM rounds.254 exploratory and 33 CBM blocks

through competitive bidding

Further liberalization of the sector

Discovered small field bid round 2016

Hydrocarbon Exploration & Licensing Policy

Open Acreage Licensing; NDR Launch

Revenue Sharing Model Pricing Guidelines for difficult gas

fields Proposed Production

Enhancement Contracts Policy

Discovered Small Field Policy

New Domestic Gas Pricing Guidelines

20142009

Successful completion of DSF 2016

134 e-bids received for 34 contract areas

30 contract areas awarded to 20 Companies

2015 2016-17

Highlights of PSC regime in India

Nomination,

8876, 79%

PSC, 2357, 21%

PSC regime saw participation from large no. of players

7

22

20

4

35

24

PSU

Private Players

Foreign Players

Non-operators Operators

Total License Awarded PSC Regime 16 lakhs square kmS

Total License currently under operation under PSC: ~105,000 sq. kmUS$ 40 bn investments till date and US$ 25 bn in pipeline

241 discoveries (126 Oil and 115 Gas) with Cumulative (O+OEG) production of 320 MMT

~400,000 LKM 2D and ~300,000 SKM 3D seismic data

1046 exploratory and 1018 development wells drilled so far

~25.6% of the total production is contributed by blocks under PSC regime

2P reserves in-place

Production, MMT (2016-17)

PSC [VALUE],

25.6%

Nomination

[VALUE], 74.4%

Architecture of the New E&P Policy Hydrocarbon Exploration and Licensing Policy (HELP)

Revenue Sharing Model

Full Marketing & Pricing Freedom

Fiscal Incentives

Unified License for all type of Hydrocarbons

Freedom to carve out blocks

National Data Repository

Open Acreage Licensing

Reconnaissance Contract (RC) Petroleum Operations Contract (POC)

Salient Features

Discovered Small Fields Bid Round 2016

Success story in the face of global economic slowdown and low oil prices

Discovered Small Fields Bid Round

2016

134 Total number of e-bids received 13 New entrants to E&P

industry

47Total number of companies that

participated

30Contract Areas awarded

• 23 – Onshore• 7 – Offshore

7 Existing E&P Players

20 Companies being awarded singly or

in consortium

National Data Repository• Central repository for E&P data of India

• High level of Security

• Ease of Access

• Automatic reporting

• Integrated with GIS browser

• Facilitates sharing among users and domain

Storage Viewing Retrieving Usage

Facilitation of data viewing through:

NDR PortalPhysical Data Room

Virtual Data Room

Data loaded in National Data Repository (NDR)

2D Seismic3D SeismicWells

1.7 million LKM of 2D seismic data 0.6 million SKM of 3D seismic data

13,170 well logs & 11, 900 well header data

*as on 31st July 2017

Attractive Features of HELP

Graded Royalties for

different block types

Full Freedom for Marketing and

Pricing

Single license forconventional & unconventional hydrocarbons

No carried interest by

NOCs

Equal weightage of work program

& fiscal share

Continuous exploration

permitted during contract period

Up to 100% FDI allowed

Increased exploration

phase

Revenue Sharing Model

Low regulatory burden

Transparent bidding model

Defined mechanism for

developing common reserve

Defined timelines for PI

transfer

Flexibility to use infrastructure in adjacent blocks

Other fiscal incentives

Open Acreage Licensing

Area offered under HELP through OAL

Total Sedimentary Area = 3.14 million sq. kms. Total Area offered under OAL = 2.84 million sq. kms.

• Onshore = ~1.5 million sq. kms. • Offshore = ~1.3 million sq. kms.

Zone 1 Sufficient Data Coverage

0.7 million sq. kms.

Zone 2& 3 Moderate to Sparse Data Coverage

2. 14 million sq. kms.

Open Acreage LicensingAllows bidders to carve out

their own blocks (minimum 10’ by 10’ Grid) by studying data at National Data Repository.

EoIs can be made round the year with bidding rounds at 6

monthly cycles.

Incentive mechanism for originators.

Time bound actions and activities with disincentives for non-performance

Exploration rights on all retained area for

full contract life.

Time-Bound FDP preparation and

provision for Direct FDP submission.

Environmental and Site Restoration

obligations.

Flexibility to choose between Petroleum Operations

Contract & Reconnaissance Contract

DGH India

Thank you

Directorate General of Hydrocarbons(Under Ministry of Petroleum & Natural Gas)Phone: 0120-2472000, Fax: 0120-2472049Email: dg@dghindia.gov.in Website: dghindia.gov.in

Oil and Gas in IndiaFueling a billion dreams everyday

Directorate General of Hydrocarbons(Ministry of Petroleum & Natural Gas)

DGH India

@DGHIndia

DGH India

Thank you

Directorate General of Hydrocarbons(Under Ministry of Petroleum & Natural Gas)Phone: 0120-2472000, Fax: 0120-2472049Email: dg@dghindia.gov.in Website: dghindia.gov.in