India struck ‘Black Gold’ in Indian Ocean? Petroleum Minister Hardeep Puri shares exciting updates

ANI

New Delhi, June 16 (ANI): Union Petroleum and Natural Gas Minister Hardeep Singh Puri said that drilling efforts in the Andaman Sea have shown encouraging signs. He termed the results from the exploratory well as “very positive,” indicating the possibility of a significant oil discovery that could open up a new energy frontier for India.He said "I can very happily talk about that possibility. Let me also clarify that ever since the Prime Minister assumed office, we have been working to fundamentally reform the entire exploration and production (E&P) system. Due to several factors, many of the contracts signed during that time failed to deliver, and E&P activity had virtually come to a standstill.”

Transcript

00:00The potential that we have in terms of known reserves is quite high.

00:05We have something like 42 billion tons of oil and gas equivalent.

00:15We have the potential of several Guyanas in the Enderman Ocean.

00:20And I also said that we are looking at the possibility,

00:25thanks to this additional exploration and production, of finding a Guayana.

00:29Here there is reasonable expectation because we found it in all those, I mean, in that basin

00:35and in so many, I've got two and a half pages of those exact locations listed, that you will find it.

00:41I can very happily talk about that possibility.

00:45Let me also clarify to you that ever since the Prime Minister assumed responsibility,

00:53we have been trying to alter the entire system for exploration and production.

00:59We had a problem in that, in the years prior to that, and right up to, I think, 2016,

01:12we call that the lost decade because on account of a large number of factors,

01:17some of the contracts which had been signed, they went wrong,

01:21and we were in a position of virtually no ENP taking place.

01:27So we call that the lost decade.

01:29And after Modiji became Prime Minister, we started changing the system.

01:34We have 3.5 million square kilometers of sedimentary basin.

01:39We never went beyond 8% or so for a variety of reasons.

01:47There were parts of the sedimentary basin which were no-go areas.

01:51So one of the decisions which we took was that 1 million square kilometers

01:54of that sedimentary basin which was no-go area has suddenly been made available for ENP.

02:02And as a result of which, the ninth round of open acreage licensing policy,

02:0838% of the bids came in that 1 million square kilometers.

02:12And it is my expectation that for the 10th round, for which work is going on right now,

02:18more than 75% of the bids will come in that region.

02:22And we have also issued some of the largest bids on offer anywhere.

02:26Something like 2.5 lakh square kilometers of area has been offered out on bidding.

02:34Now these reports which are doing the rounds,

02:37I think there is a little bit of, you know, 2 plus 2 is 22 and plus 2 is 222 in that.

02:48The potential that we have in terms of known reserves is quite high.

02:53We have something like 42 billion oil and gas, 42 billion tons of oil and gas equivalent.

03:04You can ask if you are importing so much oil and gas, why are you not exploiting it?

03:09We were not. We are doing it now. That is the point.

03:12Second issue, when you do exploration and production,

03:16it is a capital expensive, it is capital intensive, it is a very expensive proposition.

03:24An onshore well costs something like 4 million dollars on an average.

03:29I am talking about global rates and dollar rates being held at a particular constant.

03:35And an overseas and offshore well costs about 100 million barrels.

03:42Now what used to happen is, because there was no focus on E&P,

03:49they were not drilling.

03:50ONGC, which is the premier company for us in exploration and production,

03:55they have dug the largest number of wells in 37 years this year.

04:01It is about 500.

04:04Now, if you have known potential, you have to dig an oil well to find the oil.

04:09Now in Guyana, everybody says Guyana, Guyana.

04:12You know, they dug 46 wells and they did not find any oil.

04:17It is when they dug the 57th one.

04:20They dug.

04:21They dug and found oil.

04:23And then it became the largest find.

04:25So what I have been saying is, that we have the potential of several Guyanas in the Enderman Ocean.

04:33And I also said, that we are looking at the possibility,

04:37thanks to this additional exploration and production, of finding a Guyana.

04:42These are the facts.

04:43Now I can very soon share with you, where are the areas where we have dug wells,

04:47where we found oil.

04:48These are green shoots.

04:49I would be very happy to share with you.

04:54In 24, 25, these are all 24, 25 figures.

05:00Suryamani, block MB0OSHP, this is the OALP round 6.

05:11This is already found, green shoots.

05:13And I think the potential is 4 million metric tons of oil equivalent.

05:19This is 24, 25.

05:21In 24, 25, Neil Mani, this is again OALP round 5.

05:26This first one was dug at 2,323 meters.

05:31Okay.

05:32This next one I am mentioning to you, Neil Mani, 1,117 meters.

05:37Potension, 1.2 million metric tons of oil equivalent.

05:42The first one is oil, the next one is gas.

05:4725, 26, this year, in OALP, this is something going back to OALP round 3.

05:53We have dug at 2,865 meters.

05:57This is oil and gas both.

06:00This is underestimation.

06:01They are still trying to find out, but they have stuck.

06:03Then in 23, 24, under OALP 3, we had Moti, 2,957 meters depth.

06:15Oil and gas both, something like 5 million metric tons of oil equivalent.

06:20So we have several, I have one, two, three pages, two and a half pages of places where we found discovery.

06:36Now, what does that mean?

06:38It means, in essence, you have got green shoots discovery.

06:42Each place you found the oil, now you are estimating it, then you are digging deeper and deeper.

06:47As we speak, we have four places where ONGC and Oil India Limited are digging at 5,000 meters.

06:56I gave you figures at 2,500, 3,000.

06:59You have to keep giving it.

07:01Now, why was there reluctance earlier?

07:03I will tell you there are many factors.

07:05First of all, digging a well is an expensive proposition.

07:09I mentioned offshore well costs about $100 million per well.

07:14But more than that, companies are more interested in playing up their quarterly profits.

07:22Now, if you put so much money aside on drilling, that means your profit per quarter accordingly is down.

07:30How much will this mean?

07:32We need to make an estimation after all these wells, when you go down to 5,000 or even below that.

07:38But why am I optimistic?

07:41Why I think we are looking at a potential Guyana, if not more?

07:44Because our ecosystem has changed.

07:47We moved from production sharing arrangements to revenue sharing arrangements in 2016.

07:52Why was that necessary?

07:54Because the previous decade, from 2006 to 2016, which had the production sharing assessment,

07:59the contracts went wrong, there was litigation and a lot of problem.

08:03Then we have got a new law now.

08:06Earlier, we had a 1948 law which dealt with coal mining and other forms of mining,

08:12and petrol leases were part of that.

08:14We have separated that.

08:16It gives us more predictability.

08:18Plus, the new law has been formulated after looking at global best practices.

08:26And our regulations, and the new law was first, draft law was put in the public domain.

08:33It was passed through the Rajasabha and the Lokasabha.

08:35The regulations under this were also put in the public domain.

08:38And we got comments of, you know, all interested parties.

08:45And today also, our policy is a very different one.

08:47Our policy is, anyone who has good suggestions to make, please let us know when we will incorporate your suggestions.

08:57So, we are willing to tweak it in order to make it worthwhile.

09:00Secondly, participating in this kind of activity is very expensive.

09:05A lot of global oil companies will turn around and say, you know, why should we come?

09:09And then you will change our policy.

09:10We say, no, if you have the expertise, please make your expertise available to us,

09:15as we did in the case of Oil India, which is getting expertise from Petrobras of Brazil through technical services.

09:24And they have the first right of refusal.

09:26We will compensate them for their technical services.

09:28Equally, for the Bombay High, ONGC is in partnership with BP, again on similar term.

09:38And the results in both the areas and other wells that they are digging are very, very positive.

09:43All I can tell you is, it's very difficult to put a monetary figure on it.

09:47When you talk about Guyana, how much was Guyana in terms of fine?

09:51I think Guyana would be what?

09:5211 billion this thing.

09:54Now, how much is 11 billion?

09:56Let me give you a perspective.

09:57Prior to these cuts, OPEC cuts, global extraction and consumption was 102 million barrels per day,

10:07which has now come down to 97 million.

10:09If you multiply 100 million barrels by 365, you come to figure of 3 billion and they have 11 billion.

10:23So, total global consumption, all taken into account, they would have 4 billion.

10:28I am not calculating 100.

10:30This was earlier 102, now 97.

10:32But roughly, the figure is correct, 3 billion.

10:35How much would it be worth?

10:36It's wrong to put a figure on it.

10:37It depends on the price of oil on a particular day.

10:40In the last two weeks, we've had price of oil at 65.

10:43Today, we have it at 74, 75.

10:46It could go up or it could stay there or it could come down.

10:50But, all said and done, with the discoveries, Krishna Godavari Basin, there was an ONGC discovery,

10:56which, it was ONGC.

10:59ONGC, which we thought was giving 45,000 barrels of oil a day.

11:03Well, it's not reached 45, it's reached about 35, 38,000 barrels a day and gas.

11:07Now, a barrel of oil today is 74.

11:12If you multiply 74 by 35,000, you'll get a figure.

11:17But, again, as I said, today we are a 4 trillion dollar economy.

11:21We are growing at 6.5%.

11:24Guyana, which was pre-oil and today it's growing at 40%.

11:31It's growing at 40%.

11:33So, it stands to reason that if we find oil on that magnitude, as I said, I think we have the potential.

11:40It has been estimated and today the exploration and production, those two and a half pages of oil wells that we've dug and what they have shown,

11:48it's all and then we are going deeper and deeper.

11:49It shows that we are in that direction.

11:52If we get a Guyana, let's say, I don't know, Guyana is an expression.

11:56I mean, today we are importing 80% of our oil and 50% of our natural gas.

12:02If we get even, let's say, 5 billion barrels, fine, our total known estimation could be 42 billion gas and oil equipment.

12:145, 10, 15, I can't speculate on that.

12:17But, you have green shoots, discoveries, all pointing, oil being found.

12:24We should avoid the temptation.

12:27Like I saw in a news report, we said that they are digging oil wells which means the oil has been found.

12:32It's not like that.

12:33Sometimes when you dig bore wells and water will come because you are 100% sure if you go deeper,

12:38here there is reasonable expectation because we found it in all those, I mean, in that basin

12:45and in so many, I've got two and a half pages of those exact locations listed, that you will find it.

12:51But you will have to go there, cost, how much it is, all needs to be evaluated, but it's pointing to good news.

12:56Let's go there, cost, how much it is.

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