Continued policy push and simplification of E&P processes critical to maximizing domestic oil & gas production has been saved
Continued policy push and simplification of E&P processes critical to maximizing domestic oil & gas production
Securing the Energy Basket by Optimizing Resource Potential
With India’s growing economy, the demand for energy has also increased manifolds much beyond the energy produced in the domestic market. With limited fossil fuel resources, optimization of energy consumption and optimum allocation of resources is the future of the country’s energy sector.
New Delhi, July 15, 2015: With an aim to understanding the changing dynamics of India’s energy sector and the scope of optimization, Deloitte in India released a report titled, “Securing the Energy Basket by Optimizing Resource Potential”. The report was released at the India Oil & Gas Summit 2015 organised by the Indian Chamber of Commerce where Deloitte was the knowledge partner.
The report adds that the increasing demand accompanied by the current decline from key fields such as Bombay High, KG-D6, Mangala and Cambay is expected to widen the oil and gas supply-demand mismatch further. “With India’s growing economy, the demand for energy has also increased manifolds much beyond the energy produced in the domestic market,” said Vedamoorthy Namasivayam, Senior Director, Deloitte in India. “With limited fossil fuel resources, optimization of energy consumption and optimum allocation of resources is the future of the country’s energy sector.”
Current IEA estimates project that oil production would reach 1.2 mbpd by 2030 compared to the national demand of 5.6 mbpd, thereby requiring 4.4 mbpd to be met through imports .Similarly the gas demand as per PNGRB is expected to soar to 746 mmscmd vs. domestic production of 230 mmscmd leading to a shortfall of 516 mmscmd that will have to be primarily met through LNG imports. While it will be unlikely to eliminate the import dependency, focused efforts to increase exploration and production across various resource categories can help reduce the gap by 30-40% of the demand requirement.
According to the report, the total production from fields has been declining over the past few years, leading to an overall decline in production post-2010. From a peak level the oil and gas production declined by 2.3% and 38% respectively. The report highlights four key areas India should focus - Recovery from Existing Fields; Development of new fields; Unconventional Sources; Secure resources globally - in order to meet its energy security.
As per Deloitte analysis, the four key initiatives will not only help arrest the decline but also ramp-up current production levels by ~50% by 2020 and triple the production by 2030 over current levels. Production optimization and EOR/IOR will help expand the field life of existing fields and will account for 30-40% of the production in 2020. However, their impact beyond 2020 would diminish as we expect them to become standard practices in new developments going forward. New developments from existing discoveries will add substantial production only beyond 2020. These developments will account for ~25% of the production by 2030, with gas accounting for 2/3rd of the new production.
Mr. Shiv Siddhant Kaul, Senior, Vice President, ICC said that several industries are increasing consumption of natural gas in operations. It has been observed that several domestic companies have reportedly found natural gas in deep waters. As part of pricing reforms for the natural gas sector in 2013, the government approved a new pricing scheme to further align domestic prices with international market prices and to raise investment for the sector. Despite being a net importer of crude oil, India has become a net exporter of petroleum products by investing in refineries designed for export, particularly in Gujarat. Several private companies have emerged as important players in the past decade. The government is preparing to issue the 10th round of bidding for the National Exploration Licensing Policy. It is a transparent and level playing field for private investors and national oil companies – both enjoy the same fiscal and contract terms.
Dr. Rajeev Singh, Director General, ICC, speaking on the occasion said the recommendations received in today’s forum will become a part of the advocacy document of ICC that will be presented to the Ministry for further consideration.
The report also highlights three important requirements for the above initiatives as
1. Long term clarity on policies related to licensing regime, unconventionals, marginal fields, open acreage and creation of national data repository besides other policy rectifications
2. Simplification of processes to enable greater autonomy by creating single window clearances and flexibility in field development plans
3. Technology deployment, skill development and local manufacturing
Notes to the editor for reference purposes only:
This press release has been given by Deloitte Touche Tohmatsu India Private Limited
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Deloitte in India herein refers to Deloitte Touche Tohmatsu India private Limited