RIL CBM Business

Journey so far. . . .Experience & Learning

23rd December 2015

Block location
Area overview
Blocks located in tribal notified districts of
Shahdol & Annupur
~ 300 sq. kms out of total block area of 995 sq.
kms is occupied by forest
Total population of Shahdol is 1,064,989 with
~79% people living in rural area
District has coal mining & few industries

Relinquished Blocks
SP (W) SP (E)
BS(1)-CBM-2003/II
BS(2)-CBM-2003/II
SH(North)-CBM-2003/II

Current portfolio includes only first CBM round blocks 2

 Journey so far. . .!
1. LAQ of >300 well sites and ROU acquisition of >150 kms for infield pipelines
2. Drilled ~250 wells
3. 2 GGS & 4 WGS nearing completion
4. ~300 lkms of infield pipelines
5. Invested ~US$ 416MM (~ 2700 Crores) in Sohagpur blocks till date
6. 302 kms 16 Shahdol-Phulpur pipeline (SHPPL) nearing completion with investment of US$
183MM (~1100 Crores)

1. Grant of PML for Sohagpur blocks

2. Commencement of development activities
2015

Sohagpur blocks
1. Exploration Phase 2 completed: Air drilling for first time in
India.
2. Spent US$ 116MM (~ 750 Crores) in the Exploration Period
3. 3.65 TCF of GIIP resources 2012
4. Development Plan submitted & approved

Exploration Phase 1 completed for SPW & SPE: >1500 2009 Relinquished SHN block
core samples studies
2008

2007 1. EC granted for Sohagpur blocks

Awarded 2 Sohagpur blocks (SPW; SPE) 2. Relinquished 2 blocks (BS1 & BS2)
2005
2003
2001 Awarded 3 blocks (BS1, BS2 & SHN)
1US$ = 65

Largest surface footprint E&P project in India 3

Experience & Learnings (1/2)

Located in tribal districts ~300sq.km forest

Isolated & marginal fields - lacks even basic infrastructure leave alone
gas marketing infrastructure & gas markets
Infrastructure
Shahdol is 30kms from SPW & 70 kms from SPE
From Shahdol district - Nearest airport Jabalpur (220kms), nearest
railway junction Katni (130kms), District hospital Shahdol (22kms)

Heterogeneous reservoirs coupled with large number of faults

Sub-surface Low recoverable resources similar to marginal fields

100s of wells to produce same quantity of gas as in a conventional gas
uncertainty field RIL CBM needs >1000 wells
Continued investment - 10-30% additional top-up wells every year

CBM project holds attributes similar to marginal field development 4

Experience & Learnings (2/2)

Wells at every 800m - large land footprint/ acquisition

Land ownership disputes - poor revenue records & multiple land owners
RIL CBM project ~2000 acres across 1000 independent locations
LAQ/ROU
Long drawn RoU process - >15 months from application to acquisition
Dealt with >9,000 land owners while only half of the total project
requirement of LAQ/ RoU is acquired

Dealt with 20,000 land owners spread across 50 villages

Hostile local environment & manhandling of workforce resulting in fear
Community factor
issues Persistent vandalism & obstruction to work local disturbances, agitation,
violence & theft etc.
Multiple CSR initiatives health, hygiene, education, livelihood support

Land acquisition & community management key to CBM success 5

CBM well drilling

Rig-up Drilling operation

Electro-logging unit Hydraulic-fracturing 6

CBM pipeline laying

Pipeline laying Welding Hydrotesting

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CBM development facilities

GEG foundations Compressor foundation

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GGS 11
Major thrust on CSR activities
Socio economic upliftment of the locals
Health & Hygiene
o Two mobile medical units deployed in 44 villages benefiting >47,000 people
o Rs 89.60 lakhs donated for 64 toilets to Swachhta Kosh of Zila Shiksha Kendra, Shahdol
o Financial assistance to Government of Madhya Pradesh (GoMP) initiatives like Lifeline Express
Health Camp & Nasha Mukti Abhiyan.
Education
o 29 education camps benefiting >2,300 students
o Distributed 50,000 notebooks among 11,000 students across 132 schools
o Established computer labs in 6 high schools benefitting around 550 students
o Conducted career counseling and vocational trainings sessions covering 700 students
Livelihood & Agriculture support
o Mobile repairing & computer training center
o Distribution of 30 sewing machine among women
o Seed & fertilizer support provided to 500 farmers

Total CSR spend of ~US$ 2MM (~ 13 Crores) 9

Policy support to incentivize CBM (1/2)

Operational freedom

o CBM contract is revenue sharing with no cost recovery

o GoI is striving for improving ease of doing business

o Accordingly, certain procedures delaying projects like procurement procedures, budget approvals
and audit requirements should be removed.

o DGH/ GoI in any case is informed through various periodical reports on expenditure, production,
procurement, royalty, PLP, etc.

Freedom for CBM gas marketing & pricing similar to marginal field policy and as promised in CBM Policy

Provide relaxations for CBM Contracts similar to NELP and Pre-NELP PSCs policy of November 2014 -

o Grant excusable delays in all phase of the CBM Contract for circumstances beyond reasonable
control of Contractors

o Grant time extensions without setting off from subsequent phase

o Option to the Contractor for adjustment / waiver from MWP on account of excusable delays

Unfinished MWP policy on dry hole basis, in consultation with stakeholders, to be formulated for CBM
Contracts similar to NELP Blocks

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Policy support to incentivize CBM (2/2)

Framework for simultaneously coal mining and CBM (E&P) in the overlap areas. Priority should be given to
CBM as any coal mining without extraction of CBM will be a national loss and add to carbon emission.

With no cost recovery, transfer of assets to GoI or any designated agency should be on commercial basis

The application for forest diversion should be area wise rather than one application for the entire block

PMP Act should also contain the provisions for acquiring RoU for laying pipelines for transporting natural
gas, including CBM, shale gas etc., including water and electric cables

Standardizing format for Mining lease deed. The effective date of the commencement of Development
Phase should be from the date of receipt of Mining Lease from the State Government

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Thank You

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