Energy is a key driver of economic growth and the Government’s focus has been to bring about transformational changes in the energy landscape of India to fulfil the twin objectives of energy justice and climate justice. The Petroleum and Natural Gas Ministry has endeavored to “Reform, Perform and Transform’ the sector. The government has taken several reforms and accomplished major task with far-reaching impacts in the sectors of Exploration and Production, Refinery, Marketing, Natural Gas and international cooperation.
1. Exploration & Production
A number of new initiatives have been taken in the last one year to promote Exploration and Production activities in the country. In a major policy drive to give a boost to petroleum and hydrocarbon sector, the Government has unveiled a series of policy reforms. Some of the notable Policy reforms are listed as under:
i. Hydrocarbon Exploration and Licensing Policy (HELP)/ Open Acreage Licensing Policy (OALP) – This is a paradigm shift from Production Sharing Contract (PSC) regime to Revenue Sharing Contract (RSC) regime based on the principle of ease of doing business. It provides for single License for exploration and production of conventional as well as non-conventional Hydrocarbon resources; Pricing and Marketing Freedom; reduced rate of royalty for offshore blocks, Open Acreage Licensing Policy that means option to select the exploration blocks without waiting for formal bid round. Expression of Interest can be submitted round the year and Bidding is carried out every 6 months.
Under OALP Bid Round I, 55 Blocks having area of 59,282 sq. Km have been awarded on 1st October, 2018. OALP Bid Round II with 14 blocks is in the offering.
ii. Policy Framework to Promote and Incentivize Enhanced Recovery Methods for Oil and Gas- The Government has approved the Policy framework to promote and encourage adoption of Enhanced Recovery (ER)/Improved Recovery (IR)/Unconventional Hydrocarbon (UHC) production Methods/techniques through fiscal incentives and an enabling ecosystem to improve productivity of existing fields and enhance overall production of domestic hydrocarbons. The Policy provides for systemic assessment of every field for its ER potential, appraisal of appropriate ER techniques and fiscal incentives to de-risk the cost involved in ER Projects and to make it economically viable.
iii. Discovered Small Field Policy (DSF) Policy, Round I & II - For early monetization of unmonetized discoveries of National Oil Companies (NoCs), Cabinet in September, 2015 approved 69 marginal fields for offer under Discovered Small Fields Policy. These contract areas are awarded under the new regime of Revenue Sharing Model. Award of contract is expected to provide faster development of fields and facilitate production of oil and gas.
The First bidding round under the Discovered Small Field Policy was launched on 25th May 2016, thereby offering 67 discovered small fields in 46 contract areas of ONGC and OIL for international bidding. Total 30 contracts for 43 discovered small fields were signed with 20 companies in March, 2017. It is expected that in-place locked hydrocarbons volume of 40 MMT oil and 22.0 BCM of gas will be monetised over a period of 15 years.
On 7th February, 2018, Cabinet has approved the Discovered Small Field Policy Bid Round-II, an extension of the Discovered Small Field Policy notified on 14.10.2015. Under DSF-II, 59 discovered small fields/unmonetized discoveries estimated to have 194.65 Million Metric Ton (MMT) Oil and Oil equivalent gas in place are offered for bidding.
The Second Bidding Round under DSF Policy offering 59 discoveries clubbed into 25 new Contract Areas was launched on 9th August, 2018.
iv. National Seismic Programme of Un-appraised areas – The Government has taken up programme of undertaking 2D seismic survey of entire un-apprised areas. National Seismic Programme was launched on 12th October, 2016. Under the programme, Government has approved the proposal for conducting 2D seismic survey for data Acquisition, Processing and Interpretation (API) of 48,243 Line Kilo Metres (LKM). The estimated cost of the project is Rs.2932.99 crore and the project is proposed to be completed by 2019-20.
As on 31st October, 2018, surface coverage of 28485 LKM, out of 48,243 LKM has been achieved under 2D Seismic data acquisition under National Seismic Programme.
v. Policy Framework for streamlining the working of the Production Sharing Contracts- Under this Policy, Government has allowed 2 years extension in exploration period and 1 year in Appraisal period for operational blocks in NER besides allowing marketing including pricing freedom for natural gas produced in future in NER; sharing of the statutory levies including royalty & cess in Pre-NELP Exploration Blocks and to be cost recoverable with prospective effect; extending tax benefits under Section 42 of Income Tax, 1961 to operational blocks under Pre-NELP discovered fields prospectively.
vi. Re-assessment of Hydrocarbon Resources – A Multi Organisation Team (MOT) comprising of representatives of ONGC, OIL and DGH has carried out estimation of hydrocarbon resource potential in the country. The prognosticated conventional hydrocarbon resources in 26 sedimentary basins of the country are of the order of 41.87 billion tones (oil and oil equivalent of gas), which is about 49% increase as compared to earlier estimates of 28.08 billion tones.
vii. Policy Framework for Exploration & Exploitation of Unconventional Hydrocarbons under Existing Production Sharing Contracts (PSCs), Coal Bed Methane (CBM) Contracts & Nomination Fields- Government has approved the policy to encourage the existing Contractors in the licensed/leased area to unlock the potential of unconventional hydrocarbons in the existing acreages. Under this policy, an area of 72,027 sq. km. held under PSCs and 5269 sq. km area under CBM contracts has been opened up for simultaneous exploration and exploitation of conventional or unconventional hydrocarbons.
2. Natural Gas
i. Natural Gas Grid
In order to promote the usage of natural gas as a fuel/feedstock across the country and move towards a gas based economy, the development of additional 13500 Km long gas pipeline is under way to complete the Gas Grid. The status of major under-construction gas pipeline project is as under:
ii. City Gas Distribution (CGD) Network
To make available natural gas to public at large, Government has put strong emphasis on expansion of City Gas Distribution (CGD) network coverage across the country. CGD networks ensures the supply of cleaner fuel (i.e. PNG) to households, Industrial & commercial units as well as transportation fuel (i.e. CNG) to vehicles. Till 2017, only 19% of the country’s population spreading over 11% of the country’s area was covered for development of CGDs in 96 Geographical areas. To boost the CGD sector, 9th CGD Bidding Round was launched in April, 2018 for 86 Geographical Areas (GAs) covering 174 districts in 22 States/ Union Territories of the country. 38 entities (Public and Private) participated in this round and submitted total 406 bids for all 86 GAs. As of now, 84 GAs has been authorized to the successful bidders for the development of CGD networks. Hon’ble Prime Minister, on 22nd November 2018, has laid the foundation stone for the development of CGD projects in 61 newly authorized GAs covering 129 districts spreading over 17 States/UTs as well as launched the next round (10th) of CGD bidding for 50 GAs. With the conclusion of 10th round, it will expand the coverage of CGD networks to about 70% country’s population spreading over 50% of India's area. The growth of CGD coverage has potential to attract total investment of more than Rs 1,20,000 Crore in gas value chain with generation of about 3 lakh employment opportunities in coming years.
iii. Liquid Natural Gas (LNG) Re-gasification
To meet the increased gas demand in the country, different entities are importing Liquefied Natural Gas (LNG) from global gas markets. The import of LNG is being carried out at existing four (4) LNG terminals which have regasification capacity of about 26.3 MMTPA (~ 95 MMSCMD). The terminal-wise details and their expansion plans are as under
Location |
Owner |
Capacity (MMTPA) |
Dahej |
PLL |
15 |
Hazira |
SHELL |
5 |
Kochi |
PLL |
5 |
Dhabol* |
GAIL |
1.3 |
Total Capacity (MMTPA) |
26.3 |
(*Name plate capacity is 5 MMTPA but in absence of the breakwater, the terminal can only operate at 1.3 MMTPA)
On 30th September, 2018, Hon’ble Prime Minister inaugurated the Mundra LNG project which has been developed by GSPC LNG Limited. This terminal has the capacity to handle 5 MMTPA of LNG. In addition, two new LNG terminals of 5 MMTPA capacity each located at Ennore (Tamilnadu) and Dhamra (Odisha) are also under development at present.
3. Marketing
In order to provide clean cooking fuel LPG to BPL households in the country, the Government has launched “Pradhan Mantri Ujjwala Yojana”(PMUY) scheme to provide to provide 5 Crore deposit-free LPG connections to women belonging to the Below Poverty Line (BPL) families, which were subsequently increased to 8 Crore with a budgetary allocation of Rs. 12800 crore. Beneficiaries are identified through Socio Economic Caste Census (SECC) list and in case the names are not appearing in the SECC list, beneficiaries are identified from categories i.e. SC/STs households, beneficiaries of Pradhan Mantri Awas Yojana (PMAY (Gramin), Antodaya Anna Yojana (AAY), Forest dwellers, Most backward Classes (MBC), Tea & Ex-Tea Garden Tribes and people residing in Islands/ river islands.
The initial target of 5 crore connections was achieved well before the target i.e.31st March, 2019. As on 05.12.2018, more than 5.83 crore connections have been released under the scheme. Implementation of PMUY has resulted in significant increase in national LPG coverage, in general and Eastern States, in particular. The World Health Organization (WHO) has appreciated the efforts of the Government and termed it as a decisive intervention to check the indoor health pollution being faced by the women of the country.
Government, as a measure of Good Governance, has introduced well targeted system of subsidy delivery to LPG consumers through PAHAL. The initiative of the Government was aimed at rationalizing subsidies based on approach to cut subsidy leakages, but not subsidies themselves.
As on 06.12.2018, more than 23.08 crore LPG consumers have joined the PAHAL Scheme. PAHAL has entered into Guinness book of World record being largest Direct Benefit Transfer scheme. So far, more than Rs. 96,625 crore have been transferred into the bank accounts of consumers.
PAHAL has helped in identifying ‘ghost’ accounts, multiple accounts and inactive accounts. This has helped in curbing diversion of subsidized LPG to commercial purposes. So far, estimated savings due to implementation of Pahal is approximately Rs 50,000 crore.
To enhance customer confidence through Q&Q (Quality & Quantity) of fuel and minimizes chance of fraudulent transactions, this Ministry has given target to OMCs to automate all ROs across the country wherever feasible. As on 01.11.2018, 40354 ROs (70%) have been automated across the country.
There has been a significant expansion of digital payment infrastructure at retail outlets. As on 20.11.2018, 100876 POS terminals and 92408 e-wallet facility have been provided at 53717 (98%) petrol pumps across the country, 52959 retail outlets have been enabled with BHIM UPI. All the LPG Distributors and City Gas distribution companies are enabled with BHIM UPI.
Expansion of retail outlet network (Petrol Pumps) is undertaken by Oil Marketing Companies primarily to meet the growing fuel needs and convenience of customers in emerging markets like upcoming highways, agricultural pockets and industrial hubs. The Retail Outlet network in Rural, remote and far-flung areas are also being expanded with the intention of reaching product, ensuring quality and correct price to meet the rural agricultural demand and people living in remote areas. Additionally, the expansion of Retail outlet network is expected to generate employment opportunities also.
Oil Marketing Companies (OMCs) have issued advertisements for 55652 locations across thirty States inviting applications from prospective candidates for setting up of Petrol pumps on 25th November, 2018. Advertisements for the five Assembly poll bound States will be released after the model code of conduct is lifted.
For the first time, computerized “Draw of Lots”/”Bid opening” would be held under the aegis of an independent agency to bring in more transparency. All Retail outlets will be constructed with latest technology including automation.
4. Refinery
Out of the 23 refineries operation in the country, 18 are in public sector, 3 are in private sector and two as a joint venture with a total refining capacity of 247.566 MMTPA. Out of the refining capacity of 247.566MMT, 142.066 MMT is in the public sector, 17.30MMT in joint venture and the balance 88.2 MMT is in the private sector. The country is not only self-sufficient in the refining capacity for its domestic consumption but also exports sufficient quantity of petroleum products.
5. Auto Fuel Vision and Policy
i. Introduction of BS-IV & BS-VI fuels in the Country:
ii. Ethanol Blended Petrol (EBP) Programme
For ethanol supply year 2018-19, the Government has fixed remunerative price for ethanol procurement based on raw material utilized for ethanol production as follows:
III. Bio-diesel Programme
iv. Second Generation Ethanol
v. National Policy on Biofuels – 2018.
iii. The Policy allows use of surplus food grains for production of ethanol for blending with petrol with the approval of National Biofuel Coordination Committee.
vi. Joining of Advanced Motor Fuels
Ministry of Petroleum and Natural Gas joined Advanced Motor Fuels (AMF), a Technology collaboration programme (TCP) under International Energy Agency (IEA) as Member on 9.5.2018. It is an international platform to promote collaboration in R&D for developing advanced motor fuels / alternate fuels with greater focus on improving fuel efficiency and reduced GHG emissions.
viii. SATAT Initiative
6. International Cooperation
ii. Important Agreements / Contracts
iii. Major International Conferences / Meetings:
7. Swachh Bharat Abhiyan
i. Ministry of Petroleum & Natural Gas received Swachh Bharat National Award for Swachhata Action Plan (SAP) 2017-18 in Swachh Bharat National Award ceremony held on Gandhi Jayanti, 02nd October, 2018. MoPNG allocated a budget of Rs. 335.68 crore for SAP 2017- 18 and continuous monitoring through various apex level review meetings, MoPNG including Oil & Gas CPSEs, has achieved an expenditure figure of around Rs. 402 crore, showing an achievement of around 120%.
ii. As a precursor to the launch of the 150th birth year celebrations of Mahatama Gandhi, MoPNG observed Swachhata Hi Seva 2018 (SHS) from 15th September to 2nd October, 2018. MoPNG led the SHS campaign from the front. Ministry has undertaken various initiatives which inter-alia include organizing Shramdaan at various locations, conducting rallies/walkathon/cyclothons to generate awareness about sanitation; distribution of jute bags to general public to make plastic free zone; organizing cleaning drives at tourist places; constructing toilets in schools, public places, etc., distributing sanitary and hygiene products and organizing health talks and health camps.
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YKB/SK