Indian analysis: exploration and production

The US Energy Information Administration (EIA) has released the June edition of India Country Analysis Brief, discussing domestic energy usage and activity.

Oil reserves

According to the Oil & Gas Journal (OGJ), India held nearly 5.7 billion barrels of proved oil reserves at the beginning of 2014. About 44% of reserves are onshore resources, while 56% are offshore. Most reserves are found in the western part of India, particularly the Western offshore area near Gujarat and Rajasthan. The Assam-Arakan basin in the northeastern part of the country is also an important oil-producing region and contains more than 23% of the country’s reserves and 12% of the production.

Petroleum and liquids

Historically, ONGC dominated the upstream oil sector and relied on production from Mumbai High basin and its associated fields in the western offshore area. India’s total petroleum and other liquids production increase has been very gradual during the past two decades, growing at less than 2% total and peaking at 996,000 bpd in 2011. Production has declined slightly to 982,000 bpd in 2013. The Mumbai High, Gujarat, and Assam-Arakan basins contain mature fields experiencing production declines, although several redevelopment projects, enhanced oil recovery efforts, and marginal field development projects in these basins are underway to lift production by 2030.

Foreign investment

Indian and foreign companies are investing in more frontier developments and marginal fields to help offset production declines from mature basins. In recent years, major discoveries in the Barmer basin in Rajasthan and the offshore Krishna-Godavari basin by smaller companies such as Gujarat State Petroleum Corporation and Andhra Pradesh Gas Infrastructure Corporation hold some potential to diversify the country’s production.

Technical expertise

India’s relatively small land-based resource endowment means companies require more upstream technical expertise to tap into offshore reserves, especially in technically challenging deepwater reserves. Foreign companies historically took the lead in exploring new offshore opportunities. For example, Cairn India brought online the largest field, Mangala, of the RJ-ON-90/1 block in Barmer basin in 2009, with a production capacity of 130,000 bpd. The Rajasthan fields, including Mangala, produced 179,000 bpd in 2013, according to FACTS Global Energy (FGE), and Cairn India reports production from the fields could peak at 300,000 bpd. Despite Cairn’s successful drilling in Rajasthan, foreign investment in India has waned in recent years, both because of increased competition from domestic Indian companies and India’s complex exploration and production laws.

Price volatility

The government has encouraged companies to acquire overseas upstream assets as a way to shield the domestic energy sector from global price volatility. Indian companies hold large stakes in Sudan’s GNOP block, Russia’s Sakhalin-1 project, and Venezuela’s San Cristobal and Carabobo blocks. Amerada Hess Corporation sold key oil fields in Azerbaijan to ONGC in 2012. Also, ONGC, OIL, and RIL have taken stakes in gas plays in Mozambique, shale gas assets in the United States and Canada, and oil and gas assets in Myanmar, and the companies are actively pursuing other overseas upstream deals. In 2011, several government agencies agreed to establish a sovereign wealth fund that could also aid in financing overseas energy acquisitions.

Source: EIA.

Edited by Katie Woodward

Read the article online at: https://www.oilfieldtechnology.com/exploration/27062014/indian_exploration_and_production_analysis_from_eia_928/