 "oil and gas")
India will increase expenditure on surveys of domestic hydrocarbon assets to insulate the country from crude oil price shocks. There has been discussion in the Ministry of Petroleum and Natural Gas to consider ways of bringing oil and gas from India’s overseas assets in the event of a supply disruption.
These moves come at a time when Brent, the most popular benchmark for the global crude oil trade, is trading well above $90 per barrel and may even touch $100.
There is also geo-political turmoil owing to Russia’s aggressive stance on Ukraine, threatening to overrun the former Soviet Union territory. These developments have put pressure on oil-importing countries like India. The country meets 85 per cent of its roughly 225 million tonnes annual crude oil requirements through imports.
“There is no dearth of crude oil supply in the global market. The present prices are inflated due to geo-political tensions,” a senior government official told Business Standard.
“The first step to insulate the country from such massive price fluctuations is to ramp up local production, and this can be done only if the hydrocarbon seismic survey is completed. This will give us a fairer assessment of India’s domestic oil and gas resources,” the official added.
The Centre had launched a National Seismic Programme (NSP) in October 2016. The goal was to undertake a fresh appraisal of all sedimentary basins in India, especially where no or scanty data was available. This was to have a better understanding of the hydrocarbon potential of India.
Under this programme, Oil and Natural Gas Corporation and Oil India Ltd had been tasked to conduct 2D seismic acquisition, processing and interpretation (API) across the country. The National Seismic Program (NSP) for the 2D seismic API Project was to be completed by March 2019. But the exercise has been hit by delays and as on November 30, 2019, the surface coverage of 41,902 LKM (line km) out of 48,143 LKM was achieved.
According to officials in the know, currently the data for 47,000 LKM has been acquired. Some hilly areas of Manipur and Meghalaya were surveyed by using an advanced technology called airborne gravity gradiometry due to accessibility issues.
“We are conducting a survey in the Andamans. In all, an investment of Rs 3,000 crore has been made over four years across the country. It will require Rs 1,500-2,000 crore to better assess the complete sedimentary basins of India,” the official quoted above said.
There are 26 sedimentary basins in the country.
“A 2D seismic survey has been almost completed in large areas of the Andaman basin. This survey of 22,500 LKM will be concluded by the end of February 2022,” an official overseeing the implementation of the NSP said.
The Directorate General of Hydrocarbons (DGH) is upgrading the National Data Repository (NDR) to incorporate fresh data and to improve access to existing data.
Eyes overseas
While ramping up domestic oil production has been a long-standing strategy, India is banking on its investment overseas in the event of a major global oil supply disruption. This is in addition to a diplomatic outreach towards oil-producing nations to offer crude oil to India on favourable terms.
“We have invested $38 billion till now in 52 assets spread over 22 countries. These hold roughly 21.9 million tonnes of oil equivalent (mmtoe) hydrocarbon assets. This is equal to around 37 per cent of our domestic oil and gas production,” a senior oil ministry official said.
To date, oil or gas from India’s overseas investments has not made it to the country. The products are traded commercially by public sector undertakings (PSUs) that invest.
“But if push comes to shove and there is a situation when we don’t get sellers of crude oil in the international market, we can bring the output from our overseas producing assets to the country,” the official added.
However, in this there is the hindrance of high freight costs incurred in bringing oil and gas to India.
