5th India Drilling & Exploration Conference (IDEC) 2013

1. 5th India Drilling & Exploration Conference (IDEC) 2013 ….maintain….maximise….multiply Status, Prospects and Development of the Indian Oil & Gas Industry

2. International Energy Scenario • Key Areas • Energy security • Climate change • Economic developments • China to account for largest share of global energy use followed by India & the Middle East • World primary energy consumption projected to grow to 36% by 2030 • OPEC to pay the major role in global production in long run

3. Factors that would shape world energy future • Economic Growth Rate • Energy Consumption Growth Rate • Demographic Changes • CO2 emissions • Technology Development & Innovation • Global Energy Intensity • Oil Prices and • Development of Alternative Energy Sources

4. Three Energy Scenario • Baseline Scenario (business as usual) • Energy consumption to double by 2050 • CO2 emissions to continue to rise to 2½ times the current level • The Accelerated Technology Scenario (ACT): • Energy consumption - around 77% of baseline • Energy related CO2 emissions to reduce to 2005 levels by 2050. • The Blue Map Scenario: • Energy consumption - around 67% of Baseline level • CO2 emissions - 50% lower than 2005 levels. • Explores the least cost solutions • Limits the risk of severe climate change. • Both 2 and 3 scenario require extensive use of renewable energy resources

5. Scenario suggested by IEA

6. Oil Shock • Oil prices affected by • Global demand • Uncertain future supply • Political factors • As a result, oil price varied from USD 147 to $ 39 in 6 months in 2008

7. Energy Basket: World – 87% Fossil Fuel ; India – 92%

8. India: Energy Scenario With 17% of global population; 0.5% of world’s Petroleum reserve & 6.7 % of world’s Coal reserve; with a 7- 9% GDP growth target and 5.9% CAGR in primary energy demandthe situation is pretty Challenging…

9. Opportunities • India has 4% sedimentary basins of the world (3.14 million sq. km) • About 1.0 million sq. km is yet to be offered • Only 20% area is explored extensively • Out of 26 basins, exploration yet to be Initiated in 11 • Favorable open NELP regime • Abundant opportunities

10. ONGC Perspective • With the Indian Oil and Gas Industry in perspective • Its imperative to maintainproduction • Maximizethe recovery • Increasethe value of our Assets • Steps to be Implemented: • Augmenting supply of crude oil through innovative & appropriate technology • Evolve ways and means to explore & exploit small & marginal fields • Develop unconventional sources of energy

11. ONGC Perspective • As an Indian E&P industry • Challenges of mature / ageing fields • Increase recovery for sustainable growth • Mature oilfields to continue to play important role • A major challenge for the industry • Constraints in terms of • Huge growth in expenses • Uncertainty • Risks • Reasons • Remote geographic locations • Technically complex and unconventional fields (SHALE, CBM etc) • Shortage of trained / experienced workforce

12. ONGC Perspective • Domestic oil consumption touching 140 MMT • ONGC’s contribution - 18% • Major challenge being a National Oil Company • Roll out of a sustainable comprehensive perspective plan with a horizon of 2030 to meet challenges ahead

13. ONGC Perspective • Energy Security - Strategy envisaged: • Carving out more areas of exploration under • New Exploration Licensing Policy (NELP) • Coal Bed Methane (CBM) Policy • Application of Enhanced Oil Recovery (EOR) / Improved Oil Recovery (IOR) techniques for increasing recovery factor • Acquisition of exploration acreages and producing properties overseas to bring in equity oil. • Substitution of oil through use of alternate / non-conventional sources of energy such as Bio-Diesel, Ethanol-blended Petrol.

14. Challenges • Matured Producing fields • 15 fields producing about 75% of oil & gas are 25-50 years old • Large major discoveries • Deep or ultra-deep waters • Seeking Technology Solutions • Subsidy • Discount and net price gap increasing • Looming investment crunch • Crew change • Action to create new talent / the energy leaders • Constraints of accountability

15. Perspective Plan…..

16. Marginal Fields • Marginal fields • Short life span of reservoir • Minimal crude reserve • Scattered in various locations • Challenges in Exploitation • Small recoverable reserves • Characteristics of the field, e.g. water depth, reservoir pressure, sour gas, waxy oil etc. • Access & remoteness • Complexity of structures (topside loads, soil condition, water depth etc) • Feasibility / Viability i.e. price & price stability of the produced gas / liquids • Operators hurdle-rate (IRR) • Lack of collaborative efforts between licenses

17. Technology as Enabler to Success • Technology - to drive the future world energy availability • Leverage the available technology in a better way to suit requirements • Scouting for the technologies needed & Customising for own perspectives • Maximising recovery factor from matured fields • Monetization of oil & gas reserves from deep water or from small finds. • Technology per se to be taken at a different level which warrants good investments and coming together of ‘good domain experts”.

18. Technology as Enabler to Success ….. And last but not the least, we need to move beyond the point of technological interventions and should try creating a seamless integration of the chosen technologies with the existing system, techniques & technologies both at the backward & forward of the point of intervention.

19. Thank You