India’s prominence as one of the world’s key emerging energy markets is drawing many of the upstream industry’s leading players to participate in the region’s only truly technical conference and exhibition, to be held in March.
The surging interest of the international oil and gas community in India is unsurprising – the country is after all the fourth largest economy in the world and the third largest consumer in Asia. But it also currently imports the vast majority of its oil and gas, hence its strenuous efforts in recent years to implement a policy of increasing its domestic reserves and production through initiatives such as its NELP licensing rounds. This initiative has started to pay off, with some of the world’s largest ever offshore gas finds made in the deepwaters off India’s east coast, with other major resources found onshore Rajasthan.
However the country remains a true ‘land of opportunity’ as one of the least explored regions in the world, with a well density of 20 per 100 sq km. Of the 26 sedimentary basins, only 8 have been explored so far.
With the country’s predicted hydrocarbon resources currently put at between 29-33 billion tonnes of oil equivalent (10 BTOE are onshore, 12 BTOE offshore and 7 BTOE in deepwater), the upside remains vast, with analysts estimating that more than 81% of the country’s hydrocarbon potential still remains to be explored.
This is why the inaugural 2008 SPE Indian Oil & Gas event is being held, and why it is backed by many of the E&P sector’s foremost individuals and companies from both within India and around the world, all keen to play their parts in the future of this Asian powerhouse.
Key companies already confirmed to participate include India’s state-owned major Oil & Natural Gas Corp. (ONGC), the country’s largest privately-owned oil operator Reliance Industries, and the Hindustan Petroleum Corp., as well as the government’s Directorate General of Hydrocarbons. Also taking part with technical presentations will be international majors and contractors including BP, Shell, BG Group, Cairn Energy, Saudi Aramco, MOL, Abu Dhabi Co., Weatherford, Schlumberger, Halliburton, Baker Hughes, INTEQ, Japan Drilling Company, GlobalSantaFe, PT Medco E&P Indonesia and BJ Services. Many of the above will also be taking part in the accompanying exhibition, as well as other players including Deloitte, NOV, Welltec, Premier Oil Field Rentals, Newpoint Gas Services and Centerprise Tech.
The launch event will be held in Mumbai from 4-6th March 2008, with the planned biennial show organised by the long-established partnership between the Society of Petroleum Engineers (SPE) and Reed Exhibitions, who already work together on other established oil and gas events around the world including Offshore Europe in Aberdeen, Intelligent Energy in Amsterdam, and Russian Oil & Gas in Moscow.
Mr N K Mitra, Director (Offshore) of ONGC, is Chairman of the event’s Technical Programme Committee, which has lined up a series of presentations under the conference’s overall theme ‘The Changing Landscape: Emerging Opportunities in the Indian E&P Industry’.
He commented: “The programme includes an outstanding Plenary Session analysing and discussing India’s emerging opportunities within the E&P sector, as well as technical sessions focusing on Brownfield Development, Reservoir Management, Drilling, Deepwater Exploration and Production, IOR/EOR, HSE, HR/Training and Non-Conventional Resources. These will all address the technology challenges now facing the Indian oil and gas industry and explore the technological advances needed to meet this country’s increasing demands for energy.”
Mr Mitra went on to further analyse the Indian market and highlight some of the key opportunities that lie within it:
Q. The overall theme for the 2008 SPE Indian Oil & Gas Technical Conference and Exhibition is ‘The Changing Landscape: Emerging Opportunities in the Indian E&P Industry’. Please outline and explain the basic thinking and aims behind this theme choice.
A. The theme acknowledges India’s growth in the Oil Exploration and Production industry with six rounds of successful bidding completed under NELP and the discovery of major gas fields off the East Coast in deepwater. With only about 8 BMT of geological reserves being discovered out of resource base of 30+BMT, ample opportunities exist for exploration by major oil companies in India.
With India also having a GDP growth rate of over 9% and an Industrial Production growth rate of 11%, the primary energy requirement is likely to grow at a rate of more than 7%. At present India is the fifth largest energy consumer and accounts for 3.9% of world energy consumption. Per capita consumption of energy in India is almost one third the global average, which is likely to go up substantially with economic growth. For sustained development there is a need for continued supply sources and the share of hydrocarbon resource base is expected to increase from 30% to 36% in the next 25 years. So there are tremendous opportunities for all players across the hydrocarbon value chain.
Q. As Chairman of the conference Technical Committee, can you offer a few likely highlights of the event? In particular can you discuss the Opening Plenary Session and your hopes for what key issues you and the participants will discuss?
A. The conference programme is set to attract industry leaders, professionals and decision makers from all around the world, with the participation of major multinationals and national oil and gas companies and Government officials.
The first Plenary Session is based on the overall theme of the conference and will set the tone, including both technical and regulatory issues facing the Global E&P Industry. We expect participation from Oil field Operators, Service Providers, Government officials and Academics to share their thoughts and visions on emerging Indian opportunities within the E&P sector.
Q. The event also has another plenary session the following day. Could you please outline the basic scope to be covered by that session?
A. The second plenary session will focus on the exploration and development of deepwater fields wherein the pioneering efforts of ONGC and RIL shall be showcased and the experience of major players operating in such water depths shall be shared to add value to the Indian deepwater program. The major players in deepwater including Petrobras, Shell, Statoil Hydro, Chevron and BP are likely to participate.
The Indian deepwater sector (1.34 million sq. km) constitutes about one third of the total basinal area of the country (up to the EEZ areas) with prognosticated resources of about 10 billion tones.
There are 13 technical sessions planned over two and half days covering the complete gamut of the E&P sector, which includes reservoir management, brown field development, deepwater, improved and enhanced oil recovery, non-conventional resources and an exclusive HSE panel discussion.
Q. What do you perceive will be the benefits for all those attending the plenary and technical sessions at Indian Oil & Gas? What do you hope attendees will take away from this conference?
A. This conference is structured to benefit both the delegates as well as the exhibitors in more than one way. As indicated earlier the technical sessions are expected to provide in-depth exposure on the emerging technologies with their successful application demonstrated through case studies, which is the integral part of each session.
The conference will also provide an excellent opportunity for one to one interaction with the domain experts to exchange technical notes and experiences. Requisite space is being earmarked for such interactions.
The layout has also been planned meticulously to allow the delegates and exhibitors to interact more frequently and exchange business opportunities.
Furthermore over 50% of India’s sedimentary basins are either unexplored or poorly explored, and for further exploration the NELP VII licensing round started in December, wherein attractive blocks both onshore and offshore are being offered. Moreover there is the possibility of farm-in opportunities in existing blocks.
In the downstream sector also huge investments are required for creating facilities commensurate with hydrocarbon demand. The participants include Government officials, regulators, decision makers, petroleum ministry officials, etc. Presentations will be featured from industry experts covering a variety of areas on exploration and production. Speakers will also debate the manner in which emerging technologies are boosting the oil and gas sector. The conference will thus provide an opportunity for oil industry professionals to interact with a galaxy of internationally-renowned experts in their field.
Accordingly, I feel the conference will add real value to the time and money spent by individuals participating in the conference.
Q. Please outline what you consider to be the most pressing issues and technology challenges/technology gaps facing the industry, both on and offshore, here in India and how they relate to the international E&P community. What are the potential solutions?
A. There are mainly two developmental aspects facing the E&P industry in India. Firstly production from existing fields is on the decline after reaching plateau, therefore requiring innovative technological solutions for optimal exploitation of remaining hydrocarbons, and secondly the early monetization of hydrocarbon discoveries in deeper waters.
It is an old saying that the new oil in mature fields can only be found with a novel idea whereas the exploitation of new fields can be sparked off with available technologies. The deliberations of the conference are expected to meet both ends. I am sure the deliberations, especially through the Q & A sessions, will satisfy the technical hunger of the participants.
Q. Are there any new or emerging technologies or processes that you believe could enable the industry to make a ‘step change’ in its performance? Any ‘blue sky’ concepts that you believe hold the greatest realistic potential?
A. The present rate of recovery in general world-over is in the range of 35-40% on average, which implies that the bulk of the hydrocarbons here are still to be recovered. To recover these hydrocarbons, I feel that advances in seismic services, EOR/IOR and better reservoir modeling techniques will help in placing the wells at their most optimum locations. Thus, it can make a ‘step change’ in its performance.
Development of heavy oil sands and exploration of gas hydrates holds the greatest realistic potential.
Q. India’s deepwater sector has become a global ‘hotspot’ over the past 2 or 3 years but is still in its infancy, with large portions of the country remaining unexplored. What opportunities do you see for companies such as ONGC and Reliance in terms of developing their long-term ‘inhouse’ technology capabilities and reserves? What do you think can be done to further increase the level of exploration and development activity in the deepwater sector, and attract more international majors and independents?
A. Deepwater is a high investment and high-risk game but with the potential for high rewards. Three major sectors of Indian deepwater basins include Kori-Comorin (or Western) deep offshore, 85 Eastern offshore deepwater & Narcodam (Or Andaman) deep offshore.
ONGC today holds 35 Exploration licenses (PEL) in the deepwater sectors, 28 blocks are off the east coast and 7 are off the west coast. Sagar Samriddhi is the single biggest deepwater exploration campaign ever taken up anywhere in the world, and was launched by ONGC in August, 2003. It has propelled and established ONGC in the big league of deepwater operations. ONGC has drilled 41 deep/ultra-deepwater wells, which include 17 wells off the East Coast. Also the 42nd well is drilling. Well No. K-1(drilled depth 7,094 metres) is the deepest well so far drilled in India, by ONGC.
Major milestones achieved are three ‘Explorer wells’ in riserless mode with an average cost of less than US $7 million, while the average cost of drilling 40 wells was US $20 million, as opposed to the industry average of approximately US $30 million; First open water wireline logging in a water depth of 3,008 metres and the second operator in world to break the 3,000+ metre water depth barrier. The successes include the Vashishtha field, D-1, A01, E-1, U-1 and W-1 in the KG-DWN-98 Block in the KG Basin and MDW-2 and MDW-4A in the Mahanandi Basin.
Some of the challenges include drilling, well control, well completions and evacuation including flow assurance issues, and this provides huge opportunities for the major international players.
Q. What are the key opportunities and challenges faced by the industry when tackling brownfield developments in India? What role can contractors play in maximizing returns from such developments?
A. In India most of the producing fields are at a mature stage of production and provide ample opportunities for enhancing recovery. At present, the average recovery factor is around 30% whereas the global average is more than 45%. In Norway, it has reached a level of more than 60% with the application of new technologies. In view of bringing ONGC’s global recovery factor on a par with the international level, ONGC has entered a Memorandum of Understanding with Norwegian companies to stretch recovery from the current 30% planned at Mumbai offshore.
Contractors/service providers have a major role here in providing latest state-of-art technologies to enhance production and recovery from existing mature fields. The first phase of the redevelopment of Mumbai High has started paying rich dividends and accordingly ONGC has planned huge investments under rolling redevelopment plans for its offshore assets. In all such plans, better reservoir characterization, proper well placement and real time monitoring are the key parameters for exploiting the by-passed oil.
Q. Technology transfer and knowledge exchange between Indian and international companies will be a key attraction at this event. What are your views on how best to encourage this process within India’s upstream sector?
A. In the recent past, ONGC has hired domain experts in different key areas of E&P activities, which include water flood management, reservoir management, reservoir simulation, well completion, produced water treatment and rotary equipment management. These experts have provided a lot of insight into the technology gaps which need to be bridged on priority. The conference will provide a suitable platform for further strengthening the technology transfer with International oil majors and service providers. The deliberations in the conference will also help India’s upstream sector to chart out a course of future action for finding ways and means to enhance the reserve base, improvement in the recovery factor, build up of overseas oil equity and addressing a host of interrelated strategic issues concerning the E&P sector and the energy security of the country.
Q. What role do you see ONGC playing in the exploration and development of India’s offshore sector over the next 10 years or so?
A. ONGC shall continue to play a very dominant and pioneering role in ensuring India’s energy security. The huge investment in the XIIth 5-year plan is a testimony to the efforts and commitment of ONGC for the early monetization of new and marginal fields, besides redevelopment of its matured assets for enhancing recovery.
On the exploration front, ONGC intends to put more vigorous efforts into the existing blocks as well as acquire more blocks in future rounds of NELP. Ultra-deepwater discoveries are being developed through collaborations with experienced oil companies like Norsk Hydro, Petrobras, Chevron, etc. Through its subsidiary ONGC Videsh Limited, ONGC is on a spree in acquiring oil equities abroad to substantiate its domestic production.
Q. The issue of attracting talented ‘new blood’ to the industry, and how best to train the oil industry personnel of the future, remains an ongoing source of discussion and debate around the world. With the maturing workforce currently in place in most producing regions of the world, what must the oil and gas industry here in India and elsewhere do to ensure the right individuals are attracted to the industry and retained?
Is the flow of young students entering India’s academic system aware of the opportunities that await them within the oil and gas industry, and how well do you think this industry does in attracting this impressive pool of young talent?
A. With globalization an economic development, retaining Human Capital in any industry is a challenge for most organizations worldwide. The oil industry has also started facing the phenomena of high attrition rates. In the past, when the oil price was very low most of the fields became economically unviable and accordingly, the induction was also low. This has now resulted in an aged workforce. The oil price touching US $100 per barrel has rejuvenated the E&P industry by making many fields viable and so massive investments are being planned. To sustain this growth, there is a dearth of talented and experienced manpower. To attract young professionals, this industry now offers technological derivates to quench the thirst for challenges as was offered by the IT industry during the previous decade.
But still E&P companies need to advertise and attract talent by highlighting the prospects offered by the industry in terms of extraordinary challenges and enormous job satisfaction in addition to having some of the best rewards. With the demand for specialized courses in petroleum engineering, many new institutes have started offering such courses but still, the industry needs to participate more aggressively for industry-institute participation.
Q. What would you say to those who may be considering attending this event but remain undecided? Why should they attend?
A. SPE is internationally the most renowned organization, which has been regularly organizing conferences and seminars in different parts of the world through rotation. Professionals who have previously attended SPE conferences are aware of the technical content, quality of presentations on latest technological developments in different spheres of oil & gas industry. As such a big event is being organized for the first time in India by SPE, it presents a unique opportunity for my colleagues in the oil industry to participate by presenting papers showcasing the technological innovations being carried out in the Asia Pacific region. It’s a dream come true for India to be holding a conference of this magnitude for the first time.
Anybody who attends this SPE conference for the first time will be taken aback by the show and would then like to go to other SPE conferences around the world to be made aware of the latest developments, challenges faced and overall trends in the oil industry.
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