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P.K. Borthakur, on the Oil&Gas growth prospects in INDIA

Mr. P.K. Borthakur Former Offshore Director, ONGC Powered by

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P.K. Borthakur

PHOTO

Taking over as the director (offshore) in the Oil and Natural Gas Corporation Limited (ONGC) in October 2012. P.K. Borthakur played his part as a remarkable oilman at a crucial juncture when ONGC set ambitious targets in augmenting offshore production in the context of the organization's perspective plan 2030.

A Mechanical Engineer from Guwahati University, Borthakur has been groomed in IIM Lucknow and ISB Hyd. The rich industry-academia interface of this thorough gentleman facilitated his conferment with Society of Petroleum Engineers Distinguished member in 2011.

He has played an integral role in the development of the discovered assets including cluster development of Marginal fields and in the redevelopment of brownfields like Mumbai High, Heera and Bassein, which at one time were contributing over 80% of ONGC’s domestic production.

Turmoil in Global Market Vs Performance of Oil & Gas Sector of India

Turmoil in Global Market Vs Performance of Oil & Gas Sector of India..

❖ Global supply disruptions❖ Peace in Nigeria, Iraq, Syria and Venezuela❖ Saudi, Iran to boost production and ❖ USA to act as a swing producer❖ Oil price will remain low in short term

In the long run,we may find oil stabilizing at $70/barrel.(your guess is as good as mine)

Indian oil market has emerged as the silver lining on the cloud of global oil market.

❖ Reports and survey show oil demand growth in India has surpassed that of China,❖ India’s domestic oil output,backed by new oil fields,will grow marking a positive

growth rate. ❖ Consumption and Investments show an upward trend. ❖ The east coast of India is expected to see substantial investments by ONGC, and

Reliance.❖ With OIL further exploring the area, it will also witness vibrant physical activities in

coming years.

Execution & Experiences in Key Oil & Gas projects in India[Mumbai high North Complex, Rig Deployment , Drilling, fast tracking of Marginal field Development ]

MUMBAI HIGH FIELDMumbai High is one of the world’s most difficult fields with multi faced challenges such as :-

● Multi layered fracture carbonate reservoir with very thin layers ,spread over 1200 square Km.

● Large numbers of well platforms with fewer number of wells at each platform● Depleted reservoir, non uniform sweeps , water production● Pug marks in platforms unique to rigs● Limited working period due to monsoon

*India has large number of sand stone reservoirs in onshore.Most of these fields are 40 t0 60 years old.Brown fields have associated problems and require large investment at regular intervals.

In spite of multi faced problems Mumbai high till today continues to produce at a steady rate ,arresting natural decline …. Primarily due to ➢ experienced workforce➢ latest supporting technologies➢ right dose of investment periodically

Marginal Fields

ONGC's experience of operating different field across four corners of country has been very useful to adopt different techniques and strategies to develop marginal fields both onshore and offshore.

ONGC had few sour marginal fields within western offshore field.

❏ By adopting an innovative way of sweetening the gas at offshore before injecting in the pipeline helped ONGC to overcome the challenge of producing from those fields using infrastructure of existing fields (which was for sweet hydrocarbon)

❏ The other offshore field which started as marginal field turned out to be major field where ESP is extensively used.

❏ Cluster development of few marginal fields using low cost platform and integrating with brawn field’s infrastructure

These fields are successfully producing for many years now….

Discovered Marginal Fields on auction

❖ They are small in size and marginal in economics❖ Presence of hydrocarbon is established through drilling of actual wells❖ In most of the cases data is available ❖ Adequate data available to aid decision making❖ Software and support systems can be rented for evaluation.❖ A small team consisting of geologist, petrophysicist,production engineer and drilling

engineer can do the job .

Each oil field will be different..Good thing is same team can do the job on all fields.

policy(for Discovered Oil Fields)GOI(Government of India) has taken a remarkable initiative to monetise discovered marginal fields through auctions-

❖ These fields were discovered by two national oil companies and are mostly located around their oil fields.

❖ Due to the degrees of freedom allowed in pricing and allotment, finding consumers is not a challenge.

❖ Recent study indicates substantial improvement in business environment❖ 87% investors showed confidence in oil& gas sector of India❖ 82.3% gave a positive rating on investment scenarios❖ Ease of doing business has improved❖ More business friendly decisions by govt in pipeline❖ Discovered small fields would require small investments,hence revenue sharing

regime would suit them.❖ The offshore marginal fields ask for existing operator’s infrastructure utilization. Eg:

Pipeline network of existing operator can be used for transmission of gas.

The POLICY for Discovered Oilfields

The Policy is quite encouraging for small and new players. Thus, these fields can be seen as an opportunity for small or new players...

Revenue-sharing regime Vs Production sharing contract model

Revenue Sharing Regime❖ It has several advantages such as limited interference, limited approval & audit. ❖ Operators have more freedom and therefore it leads to efficient processes.

Cost Recovery Regime❖ When it comes to mega projects with large uncertainty, cost recovery regime is more

suitable.❖ For major investments in deep water and difficult areas, revenue sharing regime is not

likely to attract big investment from outside india.

In discovered marginal field investment is low, uncertainty is less and therefore revenue sharing model is more suitable.

DGH National and International Road Show takeaways for National and International Players on marginal fields

❖ Single licence for exploration and exploitation- conventional & unconventional❖ Exploration allowed during entire contract period❖ Only two bidding criteria -Work program ( 20% weightage) and biddable govt revenue

share(80% weightage)❖ Upto 100% participation by foreign companies/joint venture (allowed)❖ Technical capability requirement for bidding has been kept low to attract new players❖ Minimum tax and levies❖ Freedom of marketing❖ One time book value of wells and facilities of ONGC and OIL shall be made which has

been identified to be handed over

Poll- Which Country is capable and is aggressively investing in deep water exploration and development, when global market is struggling due to the current turmoil?❏ US❏ China❏ India❏ Brazil

On Shallow water or Deep water production

❖ Most of our prospects and inventories are in deep and ultra deep waters. ❖ India has some in shallow waters , characterised by high pressure, high temperature

and very-tight reservoir. These are bit risky asking for high investments and high level of technology.

❖ Weather considerations may turn out to be limiting factor in working sessions.❖ Attracting investments in such deep and ultra deep fields requires going back to to

cost recovery method with major modifications inviting transparency.❖ Deep water requires deep pockets, deep water technology and experience❖ Shallow water tight formation having high temperature require❖ Niche technology ❖ Large fracturing capacity

( to come up for auction separately for bidding round) Govt of india will separately come for bigger blocks in due course of time with improved terms and conditions

What does the future hold for oilfield Services in Oil&Gas Industry?

The Future...❖ Oil field services will come out as bright spot in India’s future growth results.❖ Currently, NOCs having their own services( partly). ❖ India has observed a shift in this regard, with companies going for more and more

outsourcing projects.❖ highest concentration of offshore rig in the world.(from single location)❖ Most of the services (OSV,MSV,CREW BOAT,HELICOPTER) are outsourced❖ New licensing policy would attract big players in deep and ultra deep water, thereby

increasing activities in service sector.❖ The mentioned fields would require latest technologies and state of art equipment

specially high pressure high temperature fracture, deep water gravel pack etc, which can be obtained from established players in the field.

❖ Ideal place and time to shift manufacturing units to india❖ Global oil&gas knowledge portals, forums backed up by expert discussions and

analysis will play instrumental role in bringing the big bright change in the sector.

For more or detailed information regarding discovered oil fields read the exclusive interviews of the experts at

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