challenges in exploration and production of petroleum [autosaved].pptx

7/29/2019 challenges in exploration and production of petroleum [Autosaved].pptx

1/16

CHALLENGES IN EXPLORATION AND PRODUCTION IN

INDIA

SUBMITTED BY

SUMIT KUMAR BANDUNI

SAURAB

SWATI GHAI

SNEHA THAMBI


2/16

UPSTREAM SECTOR OVERVIEW OF INDIA


3/16

OVERVIEW UPSTREAM SECTOR

India had 5.5 billion barrels of proved oil reserves at the end of 2012

India had 43.8 trillion cubic feet of natural gas reserves at the end of 2012, mostly

located offshore.

The Indian oil & gas industry pegged at US 110 BN - which is about 19% of Indias

gross domestic product

Upstreamexploration and production activities-1.On land, Offshore & Deep-

water E&P, Coal Bed Methane(CBM) , National Gas Hydrate(NGH),Shale gas

Crude oil production of India : 38 MMT and Natural gas production: 47 BCM

Directorate General of Hydrocarbons.


4/16

INDIA OIL AND GAS RESERVES


5/16

UPSTREAM COMPANIES

ONGC Videsh

Limited (Overseas

E & P)

Oil India LimitedPrivate E & P players:

Cairn, RIL, Niko etc.ONGC

Upstream: Explorationand production


6/16

EXPLORATION

Oil and gas industry is risky business the cost of exploration for hydrocarbon resources is

very high. In spite of technological developments in establishing oil finds, the uncertainties

involved in finding commercial quantities of oil and gas is large. The successful ventures

have to generate sufficient profits for the unsuccessful ones to keep the business going.

THE RISKS EXIST BECAUSE:

In spite of high level of technology involved, methods are not precise.

Methods are indirect and they do not indicate the presence of petroleum itself they only

indicate geological situations with probability of oil find.

We can not see what is happening below the earth. We conclude only by interpretation

of the data. Variables are numerous and the interpretation may go wrong.

Thus many dry holes are drilled.


7/16

PRODUCTION

Once the exploration and assessment stage is over and the reservoir is found suitable for

commercial exploitation decision is taken for commercial exploitation. The method

of production depends on:

Location of the field

Field life

Size of the field

Quality of oil and gas

Pressure/ Temperature profile over the field life

Use of artificial methods of production

Customer specification of oil and gas, market location


8/16

TYPICAL UPSTREAM VALUE CHAIN

UPSTREAM PROCESS


9/16

CHALLENGES IN EXPLORATION AND PRODUCTION

Every challenge represents an opportunity. India presents significant unexplored opportunities for

the exploration and production (E&P) industry. So far only 73 billion barrels of oil and oil equivalent

gas could be established through exploration, out of 205 billion barrels of prognosticated

hydrocarbon resources. Thus, about 133 billion barrels of prognosticated resources remain to be

unlocked through exploration.

On an average, India drills about 200 exploratory wells every year while the US drills about 2,000.

Factoring in the geological risks, this pace needs to be accelerated to identify and drill out each

prospect in the 26 sedimentary basins that provide the hydrocarbon base for India spread over

3 .14million sq.km.

The Ministry of Petroleum & Natural Gas recently set the ball rolling with a vision to reduce oilimports by 50 per cent (2020), 75 per cent (2025), and 100 per cent (2030) and a roadmap is being

evolved. The first significant step in this direction is the policy decision to allow exploration in all

producing blocks, even as the industry awaits further procedural clarity.

Source-At Kearney Research Paper


10/16

CHALLENGES IN EXPLORATION AND PRODUCTION

TECHNOLOGY- Oil companies must continually seek to develop new technologies, for example toenhance recovery from mature oil fields and deep offshore locations. Technological developments havealready brought important changes in the industry in the past.

The following provide critical challenges which call for huge investment in capital and

technology:

A) Exploration in Deep-water Sedimentary Basins;

B) Exploration in Frontier areas viz., Himalayan Fold Belts, sub-basaltzones etc.

C) New Technology in Old Fields, specially EOR

SUCCESS RATEThe success is only 18% out of 100%in India is the biggest challenge in current scenario.

HUMAN CAPTIAL DEFICITShortage human resource is another big challenge specially in areas of harshweather and deep water. Now day facing deficit of human resource in field of upstream due varioushazard prone areas .

CASING WEAR

The wells in Mumbai High field on the western coast are approx. 40 years old and so are the casing pipes

Frequent requirement of patching the casing pipes in the areas of thinning or rupture


11/16

CHALLENGES IN OIL AND GAS UPSTREAM INDUSTRY

TIME-Over 50 per cent of the time from discovery-to-delivery is wasted in the lengthy I dont trust

you approval process a non-value adding component in any project development As we seek toscale up exploration programme, there is a need to simultaneously fast-track the projectdevelopment

RISING EXPLORATION AND PRODUCTION COST -Past we could easily find oil in 50-100 meters .nowin order to explore we need drill thousand of meters do various expensive survey which in turn ledto increase cost exploration Another challenge facing the industry is that of the rising costs ofprojects: drilling costs alone have increased by 5% since 2003, with steel prices rising by 40% since

2004

ENVIRONMENT Debate poses another challenge,. NOCs have been active in combating localpollutionfor example through initiatives that prevent oil spills and reduce gas flaringas well astackling the larger issue of global warming., which hold great promise for making the use of fossilfuels more environmentally friendly.

INCREASED SAFETY AND ENVIRONMENTAL LEGISLATION-

As number of accidents our increasing happening in oil and gas industry of India government hasincreased safety of people and and environment legislation .

The company now have to invest billion rupees to avoid accidents and restore environment in caseof any accident occurrence.

Source-Ernst&Youngr pdf.


12/16

Unconventional Hydrocarbon Resourcesmajor part of the worlds hydrocarbon resources are entrapped in unconventional reservoirs

which are difficult to develop economically but are extremely large in volume. Among these,

maximum importance has been given to exploitation of shale gas reservoirs, as new technology

developed has now made it economical. Other proven source for unconventional hydrocarbon for

the future are Coal Bed Methane (CBM), Gas hydrate, Shale oil etc

LACK OF PROPER INFRASTRUCTURE

present infrastructure are not up to standards

Present infrastructure are outdated one

Eg Recent incident of reliance kg block which caused as blowout preventer used was not according

particular standards.

HIGH DECLINE RATES(law diminishing return)-Most of oil field in India are in maturity stage.

Krishna Godavari production has decreased 70-75%.The reliance kg-d6 gas has decreased by

going at peak of 62mmcmd in august 2010 to 26.1mmcmd 2012 and currently is has gone to

less 14 mmcmd. It has decreased 65-70 % of pervious years.

Source-August 8 2013 times of India


13/16

RELIANCE KG BLOCKS


14/16

OTHER CHALLENGES IN EXPLORATION AND PRODUCTION

OPERATING HARSH CONDITIONsWorking extreme

cold weather and deep water is the most difficult task as

substantial oil percent is found cold areas deep water,

ultra deep water.

INCREASING MAINTENANCE COSTS MANAGINGRESOURCES-drilling costs alone have increased by 5%

since 2003, with steel prices rising by 40% since 2004 .

Capital project logistics & freight forwarding.

Rig move management to maximize drilling time

Transportation management -

Inbound-to-operations or maintenance repairoperations (MRO) service

The above lead increase in cost which need to be manage in

accordance by employing best agencies to hardly .

.

Source-Ernst&Youngr pdf.


15/16

Any questions


16/16

Thank you

HAVE NICE DAY

challenges in exploration and production of petroleum [autosaved].pptx

Documents