This document provides information on energy sources in India, including both primary and final energy sources. It discusses India's current reserves of coal and lignite that can sustain production for 140 years and natural gas reserves that can sustain production until 2046. It also summarizes expert opinions on India's increasing reliance on imported oil to meet its needs and projections that oil demand will increase significantly by 2025. The document discusses recommendations from committees on reforms to India's oil and gas sector policies and contractual frameworks. It also summarizes best practices in Brazil and China related to their oil and gas industries.

1. Presented by-
TEAM JERICHO,
Xavier Institute of Social Service,
Ranchi.
Team Members-
AKHILESH KUMAR MISHRA
AMRIT MOHANTY
Submitted To Cairn India
PGDM MARKETING 2014-2016

2. .
Primary energy sources-
hydrocarbons(oil, coal, natural
gas),fissile/fertile elements
(uranium), kinetic energy
(wind/water), em rays solar energy
,geothermal energy
Final energy sources-electricity, petrol, gas ,
firewood , sources available in nature under
primary sources
it can be divided into commercial and non
commercial categories
Commercial-coal ,lignite ,oil , nuclear ,hydro ,
natural gas & wind.
Non commercial-wood cowdung , crop residue,
biogas
Energy and Power can be divided into
Primary energy and Final energy sources-
According to an estimation by Govt of india , we have 253.3 billion tonnes of coal (on january 2007)
and 38.27 billion tonnes of lignite (on april 2006) which can sustain upto 140 years of current level of
production.
As per DGH 2005-2006 report we have 1653 metric tonnes of petrol & natural gas which can sustain
current level of production till 2046.
Electricity requirement will grow upto 800000MW in 2032 which is 180000MW now .

3. • As per experts, India needs to achieve 8%-10% GDP growth rate till 2031-2032 to eradicate poverty and
meet human development goals .
Estimation of demand for crude oil in India by employing ardl co- integration methodology & f-statistics
shows a relation between gdp & crude oil demand in long run. For every 1% increase in real gdp would
lead to an increase in crude oil demand by about 1% in long run. Same estimation shows, Diesel price high
by 1% , demand will decrease by 0.57%, petrol price high by 1%, demand decreases by 0.85%
Expert opinion
• Presently out of india’s total energy consumption, crude accounts for 24% ,natural gas 6% , coal 40% ,
combustible renewable & waste 27% , hydroelectric power 2% , nuclear & wind energy 1% each
(iea2008). India is self sufficient in coal but imports most of its crude oil requirements.
• Need is 350 million barrels per day , of which 70% is imported. Currently fifth larger importer & likely to
become 4th larger importer in 2025 after US , China & Japan. Requirement will increase more than
850million barrels of crude oil per day.
• With expected gdp of 7% , crude price will increase by 5.5% & its demand by 4.72% by 202.
Usage Rate
We need oil & gas policy because of –
Energy needs of India
Providing energy of desired quality in sustainable manner
Competitive prices.

4. • Efficient use of resources and long-term sustainability remains core objective
of economic planning. Sustainability would take into account not only
available natural resources and issues related to ecological balance but also
established delivery mechanisms, the technological constraints that are
prevalent in the system and immediate compulsion to meet the priority needs
of the economy, economic equity and self-reliance.
• With the new mandate to bjp led government in centre , Shri Narendra Modi ,
our new PM is known for his business-centric policies. In his dialogues with
Japan & China they have agreed for an investment of 35 billion dollars & 100
billion dollars in next couple of years. Modi’s plan of making 100 ideal cities
all over the country and projects like “Make in India”, bullet trains , metro
trains, ideal villages and global investments requires a lot of energy & power.
• With one industry growing up , a lot of subsidiary industry grows up side by
side. Schools, hospitals ,offices, houses, population, transportation all grow
up, which need lot of energy and power.
Efficient, reliable and
competitively priced
energy supplies are
prerequisites for
accelerating economic
growth. For any
developing country, the
strategy for energy
development is an
integral part of the overall
economic strategy.
At present when we see the present situation of india , it is not self sufficient with crude oil demands , but it imports around 70% of
its crude and now it is in such a situation that it exports petrol, thus keeping it in a row of being energy secure.
A country will be energy secure if it uses energy for its developmental purpose and has peaceful objectives. Few years back china
was energy secure , but due to rise in its economy , it has lost its position.
Although in terms of gas and oil reserves Russia and former soviet rebublics of central asia have the largest reserves but political
instability leads to increase the risk of major oil and gas supply disruptions and investors. Moreover security of energy
infrastructure is very important for energy sufficiency.
Energy security is not synonymous to Energy self-sufficiency

5. Self-
sufficiency in
Oil and Gas
For the best E&P we need to
think the profitability of
contractor doing it. Time bound
regulatory approvals and Govt.
of India should not introduce a
mandatory minimum
percentage share for highest
price of the block.
We need best technologies of the world for
the E&P of these new provinces and the
existing ageing oil mills.
Article 18.1-18.2 & 19.1-
19.2 of NELP VIII needs
to be modified , which
advocates for exporting
oil and gas in case of
becoming self sufficient
rather storage capacities
should be built up for
using it in future.
United States Geological Survey has published a study titled “Assessment of Undiscovered Oil & Gas
Resources of the Assam , Bombay, Cauvery & Krishna –Godavari Provinces ,South Asia-2011” . Using
geology based assessment methodology USGS claimed that these four provinces have 3.534 billion
barrels of crude oil, 79.352trillion cubic feet of natural gas liquids , which shows yet to find potents.
energy security vs self sufficiency in oil & gas

6. To counter the growing needs we need to develop domestic supply
options as well as need to diversify energy resources.
We should focus more on renewable energy share for climate change
security and energy security.
Govt should increase the percentage of ethanol blended petrol and
biodiesels sale countrywide in a time bound and phased manner.
Open tenders for ethanol from sugar mills and other eco friendly
manner should be encouraged. Likely Jatropha production should be
encouraged for biodiesel.
Till 2020 we should project for 10% ethanol blended petrol and
biodiesel and 15% ,20 % respectively at the end of 2025 and 2030
respectively.
Thus enhancing sustainability and profitability of farmers also
Fuel mix as coal bed methane, shale gas , ethanol bended petrol ,
biodiesels, solar energy , wind energy , biofuels, bio gas , and nuclear
energy should be prioritiosed in order to meet the requirements.

7. .
Subsidies to villages
for home solar power
electric system set up
must be done by the
govt. its benefits
should be
communicated by
Gram Sabhas and
schools. It should be
made compulsory to
every household till
2020 to add a fraction
in their energy use.
Biogas plants must be
set up till 2025 in each
rural villages having
abundant animal and
plant wastes , for
combustion purposes.
Advocacy for sunrise
and energy efficient
technologies for the
industries and
households
Barren lands can be effectively
utilized by setting windmills in
them . This is surely a industry
which will grow rapidly. An
investor in this may sell its
outputs to the customers new
transport R&D will help. Ex-
vehicles will start and move with
batteries in heavy traffic places
and will use hydrocarbons where
it has to move fast.
Incentives like cost reduction in
tarrifs, special certificates and
medals, display in newspapers
etc can be done to reduce the
energy conservation.
REFORMS AND INITIATIVES FOR ENERGY
SECURITY

8. RECOMMENDATIONS BY VARIOUS COMMITTEES
Rangarajan
committee
• The committee suggests new contractual system & fiscal regime based on past royalty payment revenue
sharing to overcome the PTIM methodology & cost recovery mechanism, PSC based on daily production, GoI
may not introduce a mandatory minimum % share for highest production of block, MINIMUM WORK
PROGRAM Commitment.
• CBM contracts will follow NELP norms.
• Committee recommends that DGH may undertake codification of Good International Petroleum Industry
Practices(GIPIP) which are relevant to Indian Geological Setup.
Vijay Kelkar
Committee
• The most recent committee has favoured the production sharing contract for the NELP. Besides that the
committee has advocated for open acreage regime, setting up data repository, administering signed contracts
and strengthening DIRECTOR GENERAL OF HYDROCARBONS. It has favoured PSC to attract major
investments and technologies to recover all sunk costs
• Establishing university- industry relations, providing infrastructure status to E&P companies, competitive
fiscal terms, efforts to obtain gas through in situ gasification of coal and availability of trained manpower and
expertise in E&P sector. (based on recommendations of report of working group in petroleum & gas sector for
XI plan)

9. INTERNATIONAL BEST PRACTICES IN OIL &
GAS SECTOR OF BRAZIL AND CHINA
• Brazil is being considered an emerging leading force in the world’s oil sector. A radical change occurred when Petrobrás
made a number of large deepwater offshore pre-salt22 oil and gas field discoveries
• As part of a government strategy to stimulate local industrial development, the development of new oil fields is linked to a
“local content requirement”, which stipulates that part of the services and materials for all the wells, facilities and
infrastructure is to be sourced locally within Brazil. The biodiesel production (primarily from soybean oil) has grown rapidly
since 2003, when the state-supported National Biodiesel Production & Use Program (PNPB) was launched, with the ambition
to gradually substitute petro-diesel with biodiesel. In addition, and similar to the ethanol experience, there is also a
mandatory blending of biodiesel in the petrol-diesel
• The oil and gas sector is making considerable investments in Carbon Capture and Storage(CCS) technology. In particular
Petrobrás is investing in CCS technology. This results largely from a market-driven effort, as CCS could provide additional
benefits for an increase in production via Enhanced Oil Recovery (EOR) or Enhanced Gas Recovery (EGR) in its deepwater
reserves. Under the right conditions, CO2 dissolves in crude oil, increasing the mobility of the oil and thus the use of CCS could
be an interesting solution.
BRAZIL
• Strengthen micro-economic control and increase the resources input for petroleum and natural gas exploration
• Stimulating resources application and increasing economic profits to decrease the cost of exploration and exploitation, and
to popularize the application of clean energy, in particular, to stimulate and enlarge the application of natural gas, gradually
increasing the rate of natural gas in one-time energies.
• Standardization of petroleum and gas market and rationalization of the prices
• Adopting multi investment and circulation funds types to assure the funds needed in the development of the oil and natural
gas industry.
• Open wider to the outside world, explore international market.
CHINA

10. EXISTING E&P POLICY AND SUGGESTED
CHANGESAfter the regulation of NELP from 1999 , the blocks are allocated on the basis of highest bidding & PSCs .Under
the new design of PSC- removal of any carried interest of the state, freedom of contractors to market crude oil
and natural gas in the domestic market ,abolition of cess levied earlier on crude oil, reduction of royality rates,
exemption from payment of import duties on goods imported for petroleum operations and benefit of tax
holiday upto 7 years from the date of commencement of commercial product.
According to NELP X which is going to be introduced , concept of Revenue Sharing Contract(RSC) has been
introduced.
Reservoir management , enhancement of recovery factors, health and safety
management, & improved oil recovery schemes must be given due attention.
• Changes in NELP are must for attracting foreign & private risk capital in E&P.
CAG issues and delays in approvals are key challenges, stable policies throughout the asset lifecycle aligned to
block & business interests, time bound regulatory approvals, autonomy & accountability of contractor
without loss of control of government, more strategic decisions by managing committee ex.field development
plans, non exploration related work program. Scope of audit should be financial and not performance wise