Energy Needs Drive India Industry Role

Exploration Successes

The energy needs of one billion souls pose mighty challenges for India.

Booming consumption, new technology and major new discoveries make the rapidly developing subcontinent an increasingly attractive target for exploration.

GEO India 2008, scheduled Sept. 17-19 at the newly built India Expo Centre EXPO XXI in Greater Noida, New Delhi – with major support from AAPG and cooperation of several other societies – is the first major scientific conference to examine India for a global perspective, according to Dinesh Kumar Pande, director of exploration for India’s Oil and Natural Gas Corporation, and Organizing Committee Chairman of GEO India 2008.

Pande recently carved time from his busy schedule to respond to wide-ranging questions from the EXPLORER regarding the conference and India’s evolving role in the world’s energy and exploration future.

EXPLORER: Would you discuss India’s place in today’s global energy future?

PANDE: The world uses a wide variety of energy today and consumed about 11 billion tonnes oil equivalent of primary energy in 2006, 21 percent of which was consumed by the United States, followed by China with 16 percent. India is the fifth largest consumer with almost 4 percent of share at 423 million tonnes of oil equivalent consumption (oil, gas and coal).

During the last quarter century (1980-2006), primary energy consumption increased by about 64 percent (from 6.64 BT to 10.89 BT); oil by 31 percent (from 2.96 BT to 3.89 BT); and gas by a whopping 98 percent (1.45 TCM to 2.87 TCM), primarily driven by growing demand from the developing world.

Per capita primary energy consumption in India is 0.38 TOE against the global average of 1.29 TOE; one of the lowest in the world. In Canada it is 9.89 TOE, followed by 7.76 in the United States, and then Russia, U.K., France, Japan, Germany, South Korea and China, etc. China has maintained consumption less than global average despite its large population base. It is evident that hydrocarbons would continue to hold a significant position at least for the ensuing two decades, with marginal impact on account of both conservation measures and a mix of new technology and alternate drivers.

Most forecasts for the next quarter-century project a more than 60 percent increase in energy demand, mainly from emerging consumption centers. India’s demand for primary energy in 2030 is projected to be four-times what we are consuming today (423 MToe). In addition, it is estimated to be in the range of 350 to 450 MMT of oil, 100 to 200 MToe of gas and 600 to 1,000 MToe of coal. So, oil, gas and coal would continue to be dominant fuel at that point of time also.

Presently just nine countries account for 95 percent imports of crude oil. Among these countries, China, the United States and India are currently having robust growth. In case of supply constraints India will have to compete with these countries for the limited oil supply.

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The energy needs of one billion souls pose mighty challenges for India.

Booming consumption, new technology and major new discoveries make the rapidly developing subcontinent an increasingly attractive target for exploration.

GEO India 2008, scheduled Sept. 17-19 at the newly built India Expo Centre EXPO XXI in Greater Noida, New Delhi – with major support from AAPG and cooperation of several other societies – is the first major scientific conference to examine India for a global perspective, according to Dinesh Kumar Pande, director of exploration for India’s Oil and Natural Gas Corporation, and Organizing Committee Chairman of GEO India 2008.

Pande recently carved time from his busy schedule to respond to wide-ranging questions from the EXPLORER regarding the conference and India’s evolving role in the world’s energy and exploration future.

EXPLORER: Would you discuss India’s place in today’s global energy future?

PANDE: The world uses a wide variety of energy today and consumed about 11 billion tonnes oil equivalent of primary energy in 2006, 21 percent of which was consumed by the United States, followed by China with 16 percent. India is the fifth largest consumer with almost 4 percent of share at 423 million tonnes of oil equivalent consumption (oil, gas and coal).

During the last quarter century (1980-2006), primary energy consumption increased by about 64 percent (from 6.64 BT to 10.89 BT); oil by 31 percent (from 2.96 BT to 3.89 BT); and gas by a whopping 98 percent (1.45 TCM to 2.87 TCM), primarily driven by growing demand from the developing world.

Per capita primary energy consumption in India is 0.38 TOE against the global average of 1.29 TOE; one of the lowest in the world. In Canada it is 9.89 TOE, followed by 7.76 in the United States, and then Russia, U.K., France, Japan, Germany, South Korea and China, etc. China has maintained consumption less than global average despite its large population base. It is evident that hydrocarbons would continue to hold a significant position at least for the ensuing two decades, with marginal impact on account of both conservation measures and a mix of new technology and alternate drivers.

Most forecasts for the next quarter-century project a more than 60 percent increase in energy demand, mainly from emerging consumption centers. India’s demand for primary energy in 2030 is projected to be four-times what we are consuming today (423 MToe). In addition, it is estimated to be in the range of 350 to 450 MMT of oil, 100 to 200 MToe of gas and 600 to 1,000 MToe of coal. So, oil, gas and coal would continue to be dominant fuel at that point of time also.

Presently just nine countries account for 95 percent imports of crude oil. Among these countries, China, the United States and India are currently having robust growth. In case of supply constraints India will have to compete with these countries for the limited oil supply.

How do you assess India’s energy future?

As India is preparing to reach higher economic growth levels in all spheres in the new millennium, energy challenge is of fundamental importance to the country’s growth imperatives.

Energy needs recognized focus areas along with agriculture, poverty alleviation and education. The share of commercial energy in the total primary energy consumption in the country has grown from 28 percent to 65 percent over the last 50 years. Likewise, among the commercial energy resources, the dependence over coal has reduced from 86 percent to 55 percent, while oil/gas have grown from a meager 13 percent to 41 percent. In fact, gas entered the scene in the 1980s, and in a short span of 20 years it has come to occupy 7 percent of the commercial energy supply to the nation.

These changes bring out clearly that coal still dominates as a commercial energy source; however oil/gas would take up the second position.

The hydro and nuclear options do not substantially contribute to the energy needs as of now, and despite the move forward with regard to the nuclear deal, India is unlikely to upscale its activities in this field to cover any substantial ground in the immediate future.

If oil and gas are available at affordable prices and in sufficient quantities, then India is poised to follow the suit of developed countries with oil enjoying largest share of commercial energy sources and gas accounting for more than 20 percent.

However, if oil and gas face supply constraints due to “peak oil” limiting the growth in oil production and subsequent price escalation due to many bidders for the limited oil production, India will be forced to find a new paradigm for development and growth wherein main energy source would not be hydrocarbon.

In terms of exploration how much is going on today in India? How is this different from the past? What and where are the “hotspots” of exploration?

Exploration in India has gained momentum recently thanks to several policy initiatives by the government of India, like introduction of NELP, which calls for completion of exploratory programs in a time bound manner. This has also brought in several global and home-grown players, and also has set a healthy environment for knowledge sharing.

(The number of) offshore seismic surveys here are amongst the highest in the world (both 2-D and 3-D). Land crews, both in-house for companies like ONGC as well as service providers, probably would be in excess of 50 deployed in various parts of the country in the acreages under lease.

Until recently (about 2000) there was hardly any deployment through service providers. Huge increases in offshore seismic surveys are largely because of the introduction of NELP with various operators being involved in the E&P business.

National companies almost completely dominated the E&P scenario in the country, but some recent ventures have been witnessed by private operators, like Reliance Petroleum, who established one of the world’s largest gas fields in 2002 in the east coast. Smaller operators have now entered the field, like the Scottish company Cairn, which have been successful in opening up new areas in the onshore sector like Rajasthan.

The Iran-Pakistan-India pipeline, a land-based route that is in the offing, would undoubtedly make India a major gas consumer.

The country’s hot spot for exploration is the eastern offshore province largely comprising the Bay of Bengal along with the Andaman Sea – not only because the deepwater exploratory successes there are sizeable today and in all likelihood would continue to provide larger field sizes, but also because it would challenge all G&G and engineering skills in the deep- and ultra-deepwater sector.

What are the biggest challenges facing India’s oil and gas exploration today (geological, political, financial, logistic, etc.)

India is politically a very stable country, offering one of the best possible environments for exploration with a stable fiscal regime and protection of contractor’s interests. With an overall GDP growth of around 8 percent and ruling high oil prices, allocation of funds for exploration also has not been a problem.

However, it is a known fact that cost of exploration is rising, and with the prevailing energy challenge there is hardly any margin for error. Accuracy and precision therefore is name of the game.

Technology will be needed to help overcome challenges in every sphere. Field growth opportunities and near field exploration for established plays in the producing basins are peaking. As geoscientists, the onus is on us to find more oil, which we believe to be in older stratigraphy at deeper depths.

There has been an explosion in technology but areas of concern remain, including imaging of deeper objectives, sub-basalt imaging, time and depth domain resolution, reservoir characterization and fluid prediction, pore pressure prediction, tackling harsh sub-surface conditions and exploration for unconventional plays like shale gas and basin centered gas.

The foremost challenge would be to reduce the API cycle time. Advancements in processing technology can bridge this, especially when processing technologies and computing capacities are evolving in leaps and bounds.

A world-wide shortage of deepwater rigs also has had its share of effect on the current exploration plans in India, forcing delays in implementation of several programs.

What are your expectations for GEO India?

For the first time three Indian geoscience societies, namely the Association of Petroleum Geologists (APG), Society of Petroleum Geophysicists (SPG) and Society of Professional Well Log Analysts (SPWLA) are coming under one umbrella and partnering with AAPG to launch a truly international E&P conference and exposition series in India under the name GEO India.

In India there have been numerous conferences organized by Indian societies dedicated to specific domain area of E&P with limited international participation – but we felt a need to have an event covering the entire E&P span and extensive global participation of geoscientists. GEO India will precisely provide this opportunity to the geosciences fraternity.

The technical program offers 21 oral sessions covering more than 90 high quality presentations, 30 plenary and keynote speeches and more than 150 poster presentations.

GEO India … will address not only new developments and applications in geology, geophysics and geochemistry, but also some overarching issues such as the future potential of hydrocarbons.

The conference will provide a platform for ultimately contributing to the ongoing expansion of E&P activity in India and the throughout South Asia.

Also, the conference is strongly supported by the government of India.

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