Transcript Slide 1

OVERVIEW OF
INDIA’S ENERGY SECURITY
Apurva Chandra
Joint Secretary,
Ministry of Petroleum & Natural Gas
Government of India
June 2009
Global Economic Slowdown
 Industrial recession together with financial and
housing sector crisis in the US led to global economic
downturn.
 Severest since the Great Depression of 1930s.
 The World GDP annual growth rate fell from 5% in
2007 to 3.1 in 2008 – projected to be negative (-0.9%)
in 2009.
 Unprecedented oil price rise since 2004 aggravated
the global economic condition.
 Revival anticipated in 2010.
High Oil Prices initially lowered oil consumption in
the developed countries. Economic slowdown
extended demand destruction across the world
 The World oil consumption fell to 84.46 million barrels per day in
2008 – a decline of -0.6% over 2007.
 The corresponding decline in US was -6.4% and in OECD -3.2%.
 Price control by the Governments in developing countries helped
reduce the adverse impact of high oil prices but created an
enormous future financial burden.
3
India’s growth story shows resilience
against global economic slump.
 India’s GDP growth during 2008-09 was 6.7% against around
9.0% in the preceding three years.
 India’s GDP projected to grow at 6.5% to 7.0% during the current
year (2009-10).
 India seems to bounce back to recovery quickly – the industrial
output growth during April 2009 is 1.4%. Consumer goods
production increases by 16.9%.
 International Energy Agency (IEA) projects India to register
highest annual average real GDP growth of 6.4% during 20062030.
 India’s energy consumption is also projected to grow at 3.5% p.a.
in the next two decades.
4
Energy Consumption Per Capita : India and the world
• India’s per capita energy
consumption among the
lowest in the world
 7% of USA
 28% of the World
Country
TPES
(Mtoe)
TPES /
Population
(toe/capita)
TPES/GDP
(PPP)
(toe/000
2000$)
USA
2321
7.74
0.21
• India accounts for 17%
world population, but only
about 5% of world’s primary
energy consumption,
UK
231
3.82
0.13
China
1879
1.43
0.22
Japan
528
4.13
0.15
India
566
0.51
0.15
World
11740
1.80
0.20
 But projected to rise faster
than developed countries
• International Energy Agency
(IEA), Paris forecasts India’s
energy consumption growth
at 3.5% by 2030, against
world growth of 1.6%
TPES : Total primary energy supply
GDP in 2000 US$
Mtoe : Million ton oil equivalent
PPP: Purchasing Power Parity
IEA : Key World Statistics, 2008
5
Commercial Energy Mix
India
World
2007
2007
Oil
32%
6%
5%
Natura
l Gas
9%
Coal
29%
7%
Coal
51%
Oil
36%
Natural
Gas
24%
1%
2030
2031
3%
5%
Oil
29%
Natural
Gas
12%
Oil
35%
2%
Coal
32%
6%
Natural
Gas
25%
Coal
51%
• Oil & Gas together accounted 41% of commercial energy in 2007
• By 2031 Gas & Nuclear power will have an increasing share
Source: 2007 :BP Statistics 2008
2031: IEP Report, Govt. of India 2006
•
•
Oil will continue to be the single largest energy source (35%) in 2030
Coal share increases indicating adoption of CTL, CBM etc.
Source : 2007: BP Statistics 2008
2030 : IEA, WEO 2007
6
Petro Product : Increasing Demand
• Transportation Fuels’ (Diesel,
Petrol & ATF) share 51 % of
demand- Diesel is nearly 40%.
300
• High economic growth key factor
for higher demand.
200
• Demand growth projected at
around 3% in the next 25 years –
second highest growth in the
world after China.
250
133
150
112
113
04-05
05-06
100
108
03-04
120
90
55
50
30-31
08-09
06-07
0
00-01
• Petro products consumption grew
at a rate of nearly 7 % in 2006-07
and 2007-08 and fail to 3.5 % in
2008-09(Impact of industrial
slow down)
270
90-91
• Price restraints imposed since
2004-05 boosted demand.
Demand In MMT
Source: PPAC,MOPNG & EIA (for 2030-31)
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Natural Gas Demand Projection
• Stagnating domestic gas
poised to pick up from
2008-09
• Share of Private/JV
increases: RIL production in
end-2008
177
160
140
120
• LNG availability since 200405 augmenting domestic
supply
100
 Kochi & Dabhol Terminals
to boost LNG supply by
2011-12
60
• Robust gas demand at
above 6% per annum in the
next 25 years – second
highest growth in the world
after China.
BCM
180
102
80
38
40
20
24
30
11
0
1990-91 01-02
04-05
Natural Gas
08-09
LNG
11-12 2031-32
Both
Source: XI Plan Sub-Group Report & Integrated Energy Policy Report, 2006 (for 2031-32)
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India’s Oil production stagnating since 2000s
but Gas potential rising
• No large oil finds since the Mumbai High in
1978. Oil Production stagnating around 33
MMT.
• Gas production at 32.8 BCM in 2008-09 but
projected to rise substantially from 2009-10
onwards.
• Private / JV share increasing : 20% in 2020.
Source: MOPNG
9
Crude Oil: Production & Import
• Domestic Crude
production stagnant
at around 33 MMTPA
since the last ten
years, while demand
has risen faster.
• Dependence on oil
import at present
78% - Projected to
rise to 90% by 2030
160
128.2
140
121.7
120
111.5
MMT
• During 2007- 08
refineries imported
around 122 MMT of
oil.
180
100
99.4
80
60
27.2
40
15.1
20 13.6
30.2
35.2
32.2
34
34
33.3
8.4
0
1975-76
85-86
95-96
Production
05-06
06-07
07-08
imports
08-09
Source: Petroleum & Natural Gas Statistics, MOPNG & PPAC
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Natural Gas: Production & Import
• 32.8 BCM ( 29.5
 Public Sector share is
around 75 %
• Production likely to
double by 2011-12, of
which Private
Companies’ share
will be 60%
• LNG imports during
2008-09 = 28 MMSCMD
(24% of domestic gas
consumption)
50
45
40
35
3
30
BCM
MMtoe) gas
production in ’08-09
25
7
10
9
11
0
0
20
15
10
23
28
32
32
32
32
-05
-06
-07
07-08
33
5
0
96-97
-00
Imports
08-09
Production
Source: Petroleum & Natural Gas Statistics, MOPNG & PPAC
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Exploration on Fast Track:
Nearly half of country’s sedimentary area explored
12
New Exploration Licensing Policy-NELP
 Notified in 1999
 Award of licenses through international competitive bidding
 Fast track approval mechanism of bids through single
window Empowered Committee of Secretaries (ECS)
 Up to 100% foreign participation
 No Investment by Government of India
 Freedom to contractor to market oil and gas in the domestic
market at market determined prices
 100% cost recovery of Exploration & Development
expenditure
 Fiscal stability over the contract period
 Government gets Profit Petroleum in addition to Royalty
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NELP- Augmenting Domestic Production
 203 production sharing contracts signed since 2000
 Area under exploration increased more than four times
from 0.35 million sq. km in 2000.
 68 hydrocarbon discoveries under NELP Regime.
 Major
gas discoveries by domestic and foreign
companies – Gas self sufficiency likely in the medium
term.
 The Eighth Round of NELP expected in 2009- 70
exploration blocks to be offered for bidding
 During the 11th Plan, 80% of Indian sedimentary
basins to be covered under exploration – 100 %
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targeted by 2015.
Refining Capacity
15
Refineries in the Country
(Capacity in MMT)
BHATINDA
(9.0)
PANIPAT
(12.0)
DIGBOI
(0.65)
BONGAIGAON
(2.35)
MATHURA
(8.0)
VADINAR
(10.5)
JAMNAGAR
(33.0,29.0)
BARAUNI
(6.0)
BINA
(6.0)
BARODA
(13.7)
GUWAHATI
(1.0)
NUMALIGARH
(3.0)
HALDIA (6.0)
PARADIP (15.0)
CUDDALORE (6.0)
BOMBAY
(12,5.5)
VISAKH
(7.5)
MANGLORE
(9.69)
TATIPAKA
(0.08)
Existing
New
CHENNAI
(9.5)
COCHIN
(7.5)
NARIMANAM
(1.0)
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Refining Self Sufficiency achieved
since 2001-02
• Refining Self -Sufficiency is
an important part of
country’s energy security
• Private Sector share is 41%
(February 2009)
• At present , Surplus
Refining Capacity is 23 %
• Exports account for nearly
30 % of total refinery
production in 2008-09
• India’s refining industry is
well-placed to become
Asia’s Refining Hub.
17
Distribution Infrastructure
18
Distribution Infrastructure: 2002 to 2008
Unit
1.4.2002
1.4.2008
% Growth
Retail Outlets
Number
18848
36921
95.9
SKO Dealers
Number
6451
6624
2.7
LPG Distributors
Number
7486
9365
25.1
LPG Bottling Plants
Number
128
181
41.4
LPG Bottling Capacity
TMT
6263
8697
38.9
LPG Tankage
TMT
532
670
25.9
Pipeline length
Kms
5530
16805
203.9
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Concept of National Gas Grid (NGG)
• The 2006 Pipeline Policy
envisages NGG
• About 6500 km NG
transmission pipeline
already laid
• RIL’s 1375 km EastWest Pipeline (KakinadaBharuch) nearing
completion
•Study being undertaken
by the Government with
technical assistance from
United States Trade
Development Agency
(USTDA)
•Total Investment
Projected at USD 7.5
Billion (2006 Prices)
Source: XI Plan Sub-Group Report, 2006
20
Transnational Pipelines to India
Pipeline
•72% of world gas
supply is through
pipelines
•Both supply and
upcoming demand
is around Asia
•Pipeline is vital to
develop a stable
Asian gas market
Pipeline
Length
(Kms)
Estimated
Volume
(MMSCMD)
Imports from Iran
Iran – Pakistan – India
pipeline
2000
60-90
Imports from Turkmenistan
Turkmenistan-AfghanistanPakistan-India pipeline
1700
40-70
21
Strategic Storages
15 MMT in phases
5 MMT under construction
Padur (2.5 MMT)
Mangalore
(1.5 MMT)
Strategic Storage to provide for
Emergency Response Mechanism
against supply disruptions
Vizag
(1 MMT)
22
Managing High Oil Prices
23
Domestic Prices linked to International Price Trend
Year
$/bbl
140
2002-03
26.7
2003-04
28.0
2004-05
39.0
2005-06
55.7
2006-07
62.5
2007-08
79.3
60
2008-09
83.6
40
2009-10 (Up to May ’09)
58.0
120
$/bbl.
100
80
Crude
Oil
20
• India’s Oil Import dependency is projected to rise from 80 % today to 90
% by the year 2030.
• Oil price changes in International markets, therefore, affects domestic
prices in India.
24
Petrol / Diesel Pricing
 Administered Pricing Mechanism abolished from April
’2002.
 22 Price revisions were carried out during 2002-2004 in
line with import parity price.
 The super spike in oil prices since 2004 necessitated price
control to minimise adverse impact on the economy and the
people.
 In order to ensure life line energy, i.e. Kerosene & LPG, to
the weaker sections of the society & to contain inflation,
Government moderated the consumer prices of Petrol,
Diesel, LPG and SKO.
 Lower domestic prices resulted in huge under-realization of
revenue by the Oil Marketing Companies(OMCs).
 OMCs received price discount from Public Sector upstream
companies and Oil bonds from the Government.
25
Diversifying Energy Sources :
Towards a sustainable Energy Future
26
Acquisition of Equity Oil Abroad
 Indian companies present in 22 countries and 43
projects
 ONGC Videsh Limited (OVL) leads a group of Public Sector
and Private sector companies in overseas E&P acquisitions
 OVL’s oil and gas production in 2007-08 reached
MMtoe -14% of domestic production of oil & gas
8.8
27
Exploitation of Coal Bed Methane (CBM)
 Comprehensive CBM policy in July1997.
 26 CBM blocks already awarded under the first
three rounds of international offer.
 6 TCF reserves of CBM Gas established in four
blocks.
 First CBM commercial production in July 2007 in
Raniganj (WB) by Great Eastern Energy
Corporation Limited.
28
Underground Coal Gasification (UCG)
 The estimated UCG potential in India is
equivalent to 19 Trillion cubic metres of Natural
Gas.
 ONGC in collaboration with Skochinsky Institute
of Mining, Russia carries out seismic survey.
 Vastan in Gujarat & Hodu Sindri in Rajasthan are
the first two blocks suitable for UCG stations.
 Pilot production to commence in 2009-10
 Coal-to-Liquids (CTL) in pilot stage
29
Gas Hydrates
• In 2007, road map for National Gas Hydrate
programme prepared.
• About 2000 TCF reserves estimated
• The drill ship “JOIDES Resolution” has collected
good quality gas hydrate samples from deep
water basin.
• Presence of 128 m thick gas hydrate layer
detected.
• India is one of the three countries in the world to
have physically collected gas hydrate samples.
30
Biofuels
• Ethanol-blended petrol (EBP) constrained by
restrictive taxes imposed by states. About 5%
ethanol blending on all-India basis has been
possible, except a few states.
• Stability in supply and compatibility with
automotive
engines
key
to
sustained
development of EBP to reach the long term
target of 10%.
• Bio-diesel yet to take off.
• National Bio-Fuel Policy of the Government for
long term development
31
Nuclear Energy
 Electricity is the backbone of India’s energy structure
 Nuclear fuel is projected to contribute 11% of
electricity generation by 2031-32
 The Nuclear Supplier Groups (NSG) exemption to
India recently is a watershed in the development of
nuclear power in the country
32
Renewable Energy
 Reliable, affordable, socially acceptable and
environmentally sustainable energy for the millions
of households, who live outside country’s Energy
Highway
 Wind, Solar and Bio-energy constitute the core
 In wind power, India ranks fourth in the world
 Power generation potential = 45,000 MW
 Currently generated = Around 8,000 MW (17%)
 Solar energy for lighting and cooking
 12 lakh solar lanterns and cookers supplied
• Remote Village Electrification programme completed
in 4200 villages / hamlets
• 39 lakh biogas plants in States/UTs
33
Energy Efficiency and Demand Side
Management
 Limited conventional energy reserves and constraints
of harnessing non-conventional energy resources call
for greater emphasis on energy efficiency and
conservation.
 Energy efficiency measures will provide the most
important virtual energy supply sources in the next 25
years.
 Substantial energy saving potential – 19% of total
energy demand.
 Bureau of Energy Efficiency(BEE) promotes and
regulates energy efficiency measures in the country.
34
Controlling Air Pollution by Automobiles in
the Country
 India has adopted Euro standards of Fuel Quality for
Petrol and Diesel.
 The existing standards are: Euro III grades fuel for 13
most polluting cities and Euro II equivalent grade for
rest of the country.
 Euro-IV grade fuel in the most polluting cities from
April 2010 and Euro-III in the rest.
 Compressed Natural Gas (CNG) is being sold as fuel
for automobiles – all public transport buses in Delhi
converted to CNG.
 Auto LPG is also being sold as alternative motor fuel.
35
Summing up
36
To sum up, management of oil and gas sector in India
will be focussed on the following:
 Enhancing customer satisfaction through efficient
and transparent marketing and distribution
methods as well as through dissemination of
information for making informed choices
 Expediting E&P efforts to augment domestic
production and reduce dependence on unstable
sources abroad
 Improving domestic pipeline infrastructure and
promoting trans-national pipeline projects
to
strengthen the distribution network
37
 Promoting Bio-fuels and Non-conventional energy
to supplement the conventional sources as well as
improve environment.
 Accelerating R&D to enhance recovery from the
conventional sources as well as harness the
potential of new energy sources
 Managing geo-politics through diplomacy and
regional cooperation for reducing supply risks
38
Thank You
39