SECTOR DYNAMICS:
The petroleum sector is the backbone of the country. It affects a wide myriad of sectors ranging from transport to power to electricity. The energy requirement of a country is a direct culmination of the economic activities of the country. Hence for a country like India to increase its growth, it needs a sound foundation resting on a comparitively stable petroleum sector. The current level of par capita power consumption is very low as compared to other countries leaving a lot of scope for improvement.
Supply/Demand-Petroleum Products (in MMT)
| Year |
Demand (without meeting gas deficit) |
Demand (with meeting gas deficit) |
Estimated refining capacity | Estimated crude requirements |
| 1998-1999 | 91 | 103 | 69 | 69 |
| 2001-2002 | 111 | 138 | 129 | 122 |
| 2006-2007 | 148 | 179* | 167 | 173 |
| 2011-2012 | 195 | 195** | 184 | 190 |
| 2024-2025 | 368 | 368 | 358 | 364 |
* Assuming 15 MMTPA of LNG import by 2007.
** Assuming that by 2012, adequate gas is available through imports and domestic sources.
Source: Report of the Sub-Group on development of refining, marketing transportation and infrastructure requirements (1999).
As against this requirement the present domestic crude production is 33 MMT.
The gap will have to be met through imports and increase in domestic production.
COMPANY PROFILES:
ONGC:
It was established in 1956 as a statutory body for the development of petroleum resources and sale of petroleum products.
Highlights:
During 2008-09, it made 25 oil and gas discoveries in areas under its control. ONGC posted a net profit of Rs. 161.26 billion despite volatile oil markets and crude prices.
ONGC has single-handedly scripted India’s hydrocarbon saga by:
ONGC is the only fully-integrated petroleum company in India, operating along the entire hydrocarbon value chain:
* Holds largest share of hydrocarbon acreages in India.
* Contributes over 80 per cent of Indian’s oil and gas production.
* Created a record of sorts by turning Mangalore Refinery and Petrochemicals Limited around from being a stretcher case for referral to BIFR to the BSE Top 30, within a year.
* Interests in LNG and product transportation business.
ONGC Videsh Limited
NGC’s wholly owned subsidiary, ONGC Videsh Ltd, has made significant investments in many parts of the world.
The gas property in Vietnam (OVL’s participating interest 45%) went into commercial production in December 2002, leading to OVL’s first revenue from hydrocarbons. In March 2003, OVL concluded the acquisition of 25% equity in the Greater Nile project in Sudan with an investment of Rs. 3,430 crore. This investment entitles OVL to 3.00 MMT of crude oil per year, which is valued at Rs. 2,500 crore at current prices.
OVL opened its first overseas subsidiary, Sakhalin India Inc., in US for managing its operations in Sakhalin Oil field in Russia. Further, ONGC Nile-Ganga BV, a wholly owned subsidiary, was incorporated in The Netherlands to manage the Sudan property.
OVL is also pursuing exploration of oil and gas in Russia, Iran, Iraq, Libya Myanmar and other countries.
Oil India Limited
It is the second largest national oil and gas company in India as measured by total proved plus probable oil and natural gas reserves and production. It is primarily engaged in the exploration, development, production and transportation of crude oil and natural gas onshore in India. It also processes the produced natural gas to extract LPG.
Over the years, it has successfully established itself as a major player in the International Crude Oil & Natural Gas Sector. Presently, the Company has presence in Egypt, Gabon, Iran, Libya, Nigeria, Yemen and Timor Leste for the exploration of crude oil and natural gas. It primarily conducts its activities with respect to its domestic producing blocks and exploration activities in our nomination blocks independently. Exploration activities, both in India and overseas are also being carried out through joint venture arrangements and PSCs with other oil companies.
As of March 31, 2009, the Company’s estimated independent proved plus probable crude oil reserves were approximately 577.47 million barrels which included condensate reserves for 2.07 million barrels and proved plus probable natural gas reserves were approximately 63.41 billion cubic meters which also included gas reserves used for internal fuel consumption for 9.05 bcm. In addition to the Company’s independent reserves, it has a participating interest of 8.19 million barrels of proved plus probable and possible reserves in the Kharsang fi elds in the Assam- Arakan basin in the state of Arunachal Pradesh.
For Financial Year 2008-09, the Company’s gross production amounted to approximately 24.95 million barrels of oil which included natural gas condensate of 0.15 million barrels and approximately 2.27 billion cubic meters of natural gas, representing an average daily production of approximately 68,357 barrels of oil and 6.22 billion cubic meters of natural gas which is approximately 10.41% and 6.91% of India’s total production of crude oil and natural gas, respectively.
PERFORMANCE NUGGETS
a) Highest ever profi t of Rs. 2161.68 crores during 2008-09
b) Highest ever crude oil production. About 12 % more than the 2007-08 production.
c) Highest ever crude oil sale. About 12 % more than the 2007-08 sale.
d) Highest ever daily gas production rate of 6.43 MMSCMD in the North East.
e) Enhancement of daily production potential to 0.93 MMSCMD in Rajasthan (highest ever production potential).
f) Achieved highest ever horizontal displacement of 846m with S-bend trajectory (NHK #575).
g) Made 4 commercial hydrocarbon discoveries in Assam. Mechaki-2 discovery is the deepest on-land commercial hydrocarbon discovery in India (5556 m) so far and the well is already contributing to production of oil & gas.
h) Highest ever 3D seismic survey: 3495 SQKM, about 305 % higher than 2007-08 (Earlier highest: 1145 SQKM in 2007-08).
i) Completed acquisition and processing of fi rst ever 4D seismic survey in OIL over Dikom fi eld.
j) The GIS application centre is now fully operational for planning and execution of seismic survey operations.
k) Completed and commissioned 660 km long Numaligarh – Silliguri Product Pipeline.
l) Bagged 4 nos. blocks in NELP-VII round of bidding, 1block as operator and 3 blocks with PIs.
GAIL
Already covered in gas document
OVERALL ANALYSIS:
India has large reserve of trained and highly skilled manpower at a relatively much lower cost compared with advanced countries. Further, with a large population base and a currently very low per capita consumption of petroleum products, India is amongst the fast emerging markets . The country has also acquired enough experience in the installation and efficient operation of petroleum refineries in the last 35 years. It is, therefore, considered that the operating cost will be low and the value-addition in Indian refineries will be of a very high order and that the setting up of refineries in India for the domestic market as well as for exports would be economically attractive.
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