Introduction

• NELP provides a level playing field in which all the parties

may compete on equal terms for the award of exploration
acreage.
• GOI announced NELP in 1997-98 budget. It took 2 fiscal
years and 2 successive government to finalize.
• The tax incentive promised to prospective investors.
• After several go and halt signs by GOI, NELP finally got
Underway in 1999.
• It refers to profit sharing model / cost recovery model
 Main features of NELP
1. Upto 100% participation by foreign companies.
2. No minimum expenditure commitment during exploration period.
3. No customs duty on imports.
4. No mandatory state participation.
5. No carried interest by National Oil Companies (NOC).
6. No cess on crude oil production.
7. No Income tax for 7yrs from start of commercial production.
8. Royalty to be paid on crude oil & natural gas on Volume basis.
 Objectives of NELP Rounds
• Intensive exploration of Indian basins.
• Opening up of acreages in ultra deep water & frontier areas.
• To stimulate & promote interest and activity from a wide range of E &
P players.
• To bring-in new & state of art technology in exploration &
exploitation.
• Level playing field to all participating companies.
• Transparent Bid Evaluation system .
 Pre NELP
PRE INDEPENDENCE (1866-1947)
• Oil exploration in India commenced in 1866 when Mr.Goodenough of McKillop
Stewart company drilled a well near Jaypore near upper Assam.
• First commercial oil discovery in 1889 at Digboi.
• 1893 rights were granted to Assam oil syndicated to erect a refinery and led to
formation of Assam Oil Company (AOC)in 1899

1947-1960
• After independence GOI realized the importance of Oil& Gas and framed Industrial Policy
Statement of 1948.
• Top priority for development of Petroleum Companies. While oil exploration was to be
addressed separately. License of oil and petroleum extraction was dealt separately
• In 1955 GOI established ONGD (Oil and Natural Gas Directorate) with the help of GSI
(Geological Survey of India).
• From 1958 ONGC started its exploration in:
– Himalayan Foothills
– Ganga Plains
– Alluvial tracks of Gujarat
– Upper Assam and West Bengal
– Cambay Basin
 Summary of Pre-NELP

• Pvt. Companies felt that the incentive structure designs

were not attractive for the higher perceived risk
• Inordinate delays in awarding contracts (up to 2-3 yrs)
• After signing contracts, it took years to obtain clearances
from various agencies of the GOI &State Govt. to go ahead
to start the operations
 Post NELP
NELP I – January 8,1999

• World class gas discovery by RIL- NIKO in 2002 in

KG offshore block
• Cairn energy’s discovery in KG deep water block
• Gas discovery by RIL in Mahanadi shallow water
block
 NELP Rounds
Block Offered Bids Received Contract Signed
Pre- NELP 379 148 28
NELP - I 48 45 24
NELP – II 25 44 23
NELP – III 27 52 23
NELP – IV 24 44 20
NELP – V 20 69 20
NELP – VI 55 165 19

• NELP VII- Approximately 50 to 60 blocks have been identified for the offering.
• NELP VIII- Government has offered 31 production sharing contracts on 30 June
2010. (There are 8 deepwater blocks, 11 shallow water blocks and 12 onland
blocks)
• A total of 33 exploration blocks were offered during the bidding process.
(State-owned ONGC bagged 10 of the 33 oil and gas exploration blocks. OIL bid for
as many as 29 blocks and managed to get 10. )
 Comparison
Pre - NELP
• NOC’s got acreages on
preferential basis
• NOC’s had 0-40% participation
at their option
• NOC’s 30% carried interest
exercisable on commercial
discovery
• NOC’s did not get the same
terms as available to private
investors
• No special incentive
• Limited Data
Post - NELP
• NOC’s to compete for acreages
• No participation by NOC as
Government nominees
• No carried interest by NOC’s
• NOC get international market
price on their production of oil &
gas and exemption from payment
of custom duty and cess.
• In the initial 7 years, only 50%
royalty to be paid for deep water
blocks.
• Significant improvement in data
quality and quantity.
 Comparison
Pre NELP NELP – I, II, III, IV, V, VI
(1993 – 2006) – 13 yrs (2000-08) – 8 years
2D Seismic Survey 24,091 1,09,305
(LKM)
3D Seismic Survey 5,304 67,773
(SKM)
Exploratory Wells (No.) 167 93

PSC Block 28 138

No. of Discoveries 25 40
(Up to 15-04-2008)
Investment made on 781.65 1451.18
Exploration
(US$ Million)
 Conclusion
• NELP is a success.
• India is highly under/unexplored
• Possibility of striking of rich oil and gas reserves in
poorly explored/unexplored older sediments quite
high.
• Need for acquiring geo-scientific data across the
country
• Integration of entire geo-scientific data for better
geological understanding of regional & local
prospectivity.
• One window clearance is the present need.
Limitations of NELP
The Hydrocarbon Exploration and Licensing Policy (HELP)
•HELP is a policy framework that governs the exploration and production of
hydrocarbons in India.
•It was introduced by the Government of India in 2016 to replace the New
Exploration Licensing Policy (NELP).

The HELP policy is based on the following four key principles:

1.Licensing:
•The HELP policy provides for a single uniform license for all
hydrocarbons, including oil, gas, and coal bed methane.
•This means that companies only need to obtain a single license to explore
and produce all types of hydrocarbons.
•The license is valid for a period of 8 years for onland/shallow water blocks
and 10 years for deep water/frontier blocks.

2.Open acreage:
•The HELP policy allows companies to choose blocks to explore without
having to participate in a competitive bidding process.
•Companies can apply for an exploration permit (EP) for any block that is
available for exploration.
•This gives companies more flexibility and reduces the cost of exploration.
3. Revenue sharing:
• The HELP policy uses a revenue sharing model, which gives companies more
flexibility in how they operate and reduces their risk.
• Under the revenue sharing model, companies pay the government a share of their
revenue (net of royalty) as per the contract.
• The revenue sharing percentage is determined based on the risk profile of the
block.

3. Simplified regulatory framework:

• The HELP policy has simplified the regulatory framework for the oil and gas sector.
• This makes it easier for companies to get started and operate in India.
• The HELP policy has been successful in attracting investment and boosting
domestic oil and gas production.
• Since the policy was introduced, India's oil and gas production has increased by
over 10%.

Some of the key simplifications include:

o A single window clearance system for all approvals required for exploration and
production activities.
o A simplified process for obtaining environmental clearances.
o A streamlined process for resolving disputes.

The HELP policy is a positive development for the Indian oil and gas sector. It has
attracted investment, boosted domestic production, and reduced import
dependency. The policy is also expected to create more jobs in the sector.
 Introduction………..

The complete hydrocarbon value chain consist of

• Upstream ( Petroleum ) Engineering- ( both offshore/onshore)

Includes exploring, drilling and producing oil & gas from offshore /onshore
locations

• Midstream ( Pipeline/Sea Transportation ) Engineering- ( Pipeline/ Sea

transportation & storage )

Includes oil & gas processing, storage, transportation to refinery /end user
through pipeline network/ shipping

• Downstream ( Refining/Petrochemicals) Engineering- ( Refining &

petrochemicals, Gas end applications)

Includes refineries & petrochemicals units and industrial/ commercial/

residential/ transport gas applications
 UPSTREAM (Petroleum) ENGINEERING
• Team of geoscientists study basins & rock formations
• Analyze oil and gas reservoir for quality and quantity
• Determine best extraction methods
• Monitor drilling and production
• Design equipment & processes to maximize amount of oil and gas recovered

MID- STREAM (Pipeline/ Shipping transportation/Storage) ENGINEERING

• Oil, gas & water separation

• Hydrate, trace metal/salts removal, gas sweetening
• Storage engineering including under ground storage systems
• Transportation of oil & gas including oil tankers and shipping/chartering,
optimization of flow line network, pipeline reboosting/ compression stations
• LNG technology – regassification

DOWN STREAM ENGINEERING

CDU & VDU including crude oil characterization/assay

• Various petroleum refining process including FCC, Gasoline blending and
upgrading, sulfur removal, lube manufacturing
• Petrochemicals, specialty chemicals, transportation fuels, NG for fertilizer and
power plants
• City gas distribution
 Explosive growth in the Oil & Gas Sector

•The Indian Oil & Gas industry (energy sector) is estimated to be a US$ 120 - 150
billion industry (15% of GDP)
• India is 3rd largest consumer of Oil in the world and 4th in terms of petroleum
product consumption
• India is one of the most emerging Gas markets in the Asia-Pacific region, 4th largest
importer of LNG
• 23 Refineries in India. 5th in the world in terms of Refining capacity
• Estimated investments in just the E&P of oil & gas will be US$ 40 billion in next few
years
•Major Oil Equity abroad: Vietnam, Russia, Sudan, Myanmar, Iraq, Libya, Nigeria,
Egypt, Ivory Coast, Qatar, Australia, Brazil
•Deep- water gas development projects in KG basin is one of the largest in the
world
 Challenges confronting the oil & gas industry

1. Expanding production capacity

2. Stabilizing markets
3. Meeting environmental expectations
4. Supporting research and development
5. The International Energy Agency estimates that over $200 billion
per year of investment is needed to produce the oil and gas the
world requires.
6. By 2030, the world’s energy needs will be 50 percent greater than
they are today
7. Innovation, free trade, open access to world markets, international
partnerships
8. Overcome harsh environment challenges
9. Energy security
10. Geopolitical issues
11. Stable legal, tax and regulatory framework
Oil & Gas technological innovations
• Today, drilling is done 6 miles horizontally and 10,000 ft. in depth
• Improved environmental performances by producing clean, low emission fuels
and vast distance transportation of liquid oil without any spillage
• New modeling techniques and computing advances to better understand the full
physics of multiphase fluid flow
• Floating production, storage and offloading vessels, enabling us to reach
water depths of over 1,800 meters
• Nanocatalysis as part of molecule management systems has enabled
companies to increase refining capacity at a rate equivalent to building a new
grassroots refinery every three years worldwide.
• To deliver the higher fuel efficiency of diesel at significantly lower emissions
levels, and therefore improve vehicle fuel economy by approximately 30 percent.
• If new vehicle fuel economy could be improved by 3 percent per year, over ten
years this would save almost 4 billion barrels of oil on a global basis. To put this in
perspective, it is equivalent to all of the crude oil the United States imported last
year
• Significant increase in the world’s estimated recoverable petroleum resource
base
• In 1950, the U.S. Geological Survey estimated that the world’s conventional
recoverable resource base was about 1 trillion barrels. Fifty years later, that
estimate had tripled to 3 trillion barrels
Oil & Gas Engineers + High-Tech Tools = Success

• Shoot 3D “pictures” to virtually walk around inside

an image of Earth
• Guide drilling rigs from control
rooms miles away
• Use
– Advanced directional drilling
technology
– Sophisticated software
– Remote-operated vehicles
(ROVs) under water
– 3D visualization
SAP ERP software for Oil & Gas Operation
Career Opportunities in Oil & Gas Companies

⮚Upstream Petroleum companies (Exploration, formation evaluation, seismic data

processing and interpretation)
⮚Upstream Petroleum companies (Drilling, production/well/reservoir engineering
& Oil /Gas Processing )
⮚ Oil & Gas transportation & storage companies
⮚ Refineries & Petrochemical units
⮚IT companies working on Energy & Utilities vertical
⮚EPCM companies and design consultancies
⮚Companies specialized in developing petroleum related softwares
⮚Process automation & system control
⮚ Logistics, supply chain, oil & gas distribution, shipping & chartering
⮚ Petroleum retailing, marketing & business development
⮚ Oil & Gas trading, insurance, banking & finance companies
Onshore drilling and production

Onshore drilling and production typically involves the following steps:

1.Construction of a drilling rig: A drilling rig is a tall structure that
supports the drilling equipment.
2.Drilling of a well: A drill bit is attached to a long string of drill pipe and
lowered into the ground. The drill bit rotates and cuts through the rock, and
the drill pipe is used to rotate the drill bit and to transport cuttings to the
surface.
3.Cementing of the well: Once the well has been drilled to the desired
depth, it is cemented to prevent the well from collapsing and to prevent
fluids from migrating between different geological formations.
4.Completing the well: The well is completed by installing a perforated
casing and a production packer. The perforated casing allows oil and gas to
flow into the well, and the production packer prevents fluids from flowing up
the casing.
5.Production of oil and gas: Oil and gas are produced from the well by
using a pump to lift the fluids to the surface. The fluids are then separated
and processed to produce marketable products, such as crude oil, natural
gas, and gasoline.
Offshore drilling and production

Some of the key engineering aspects of drilling and production include:

• Well design: The well design is critical to the success of a drilling and
production operation. The well design must take into account the geological
conditions of the reservoir, the type of fluids being produced, and the
desired production rate.
• Drilling technology: Drilling technology has advanced significantly in
recent years. New drilling technologies have made it possible to drill wells in
deeper and more challenging environments.
• Production technology: Production technology has also advanced
significantly in recent years. New production technologies have made it
possible to produce oil and gas from reservoirs that were previously
considered to be uneconomical to produce. Drilling and production of oil
and gas are complex and challenging processes. They involve a number of
engineering aspects, both onshore and offshore. New technologies are
being developed all the time to improve the efficiency and safety of drilling
and production operations.
Some of the major Global Companies working in Oil &
Gas domain

⮚Upstream Petroleum companies

ONGC, Oil India, Saudi Aramco

⮚ Gas companies
RIL, Adani Gas
Petronet LNG, Indraprasth Gas, Sabarmati Gas, Qatar Gas,

Refineries & Petrochemical units

Indian Oil, HPCL,BPCL,MRPL,RIL,ESSAR OIL, Exxon Mobil, Total, Petrobras,
Petronas,

⮚IT companies working on Energy & Utilities domain

TCS, Infosys, Wipro Technologies, Accenture

⮚EPCM companies & consultancies

L&T Chiyoda, L&T Valdel, Technip,UoP, Bechtel, ICI Technimont, Udhe, EIL, ABB
Lummns, Fluor, Mott McDermott, Petrofac
Some of the major global companies working in Oil &
Gas domain
⮚ Companies specialized in developing petroleum related softwares
Schlumberger, Western Geco, Halliburton, SAP, Aspentech, Chemstations, Win Sim,
ANSYS Fluent

⮚Process Automation & Control

Honeywell Process, Emerson, ABB, Rockwell, Invensys, GE, Siemens

⮚ Logistics, supply chain, shipping & chartering

Global Marine, Gulfmark offshore, Toll Energy, Huisman-Itrec, EP Team, Maersk,
Shell vessels

⮚ Petroleum Retailing, marketing & business development

Indian PSU’s, Reliance, Essar, Shell India

⮚ Oil & Gas trading, finance and market research companies

CRISIL, PWC , McKinsey, Ernest & Young, Eco Securities, MCDEX , Reliance
Energy trading, Infraline, Foster Wheeler
The life cycle of a typical offshore oilfield project
consists of following five steps:
1) Exploration: This activity involves geological and seismic surveys followed
by exploration wells to determine the presence of oil or gas.
2)Conceptual study/ Appraisal: It involves drilling of delineation wells to
establish the size and quality of the potential field. Preliminary development
planning and feasibility studies are also performed.
3) E&C/ Development: Following a positive appraisal phase, this phase aims
at selecting the most appropriate development plan among many alternatives.
This step involves capital-intensive investment and operations decisions that
include facility installations, drilling, sub-sea structures, etc.
4) Production: After facilities are built and wells are drilled, production starts
where gas or water is usually injected in the field at a later time to enhance
productivity.
5) Abandonment: This is the last phase of an oilfield development project
and involves the decommissioning of facility installations and subsea
structures associated with the field.
Farm-In:

Farm-ins is the oil industry are deals where a company, not at present a
licensee on a particular licensed area, can acquire an interest from one of
the existing licensees. The transfers of interest are generally made in return
for exploration or other commitments, for exchanges of license interests, or for
cash. A farm-in has four basic characteristics.
1.One company (the seller) has a license interest.
2.Another company (the buyer) agrees to pay the seller’s costs for a
particular activity, usually a well, perhaps a seismic programmer.
3.Thirdly, in return the seller transfers to the buyer part of the seller’s
interest.
4.The seller retains part of its interest.

Farm-Out:

A farm-out is an agreement whereby a third party agrees to acquire from one

or more of the existing licensees an interest in a production license, and in
the operating agreement relating to it, for a consideration which, in oil
industry practice, will normally consist of the carrying out of a specified work
obligation, known as the earning in obligation, used in the drilling of one or
more wells.
Advantages through farming-in or farming-out:
1.Buyer has funds and a shortage of acreage and prospects and, conversely, the seller has
acreage and is short of funds.
2.Rationalization is another reason. The seller may want to get rid of acreage which is peripheral
to its main operations. This may be instigated following a change of management or when one
company takes over another company and inherits a diverse portfolio of acreage which may require
consolidation in particular areas. Often companies will dispose of assets which consume time and
effort to an extent which they regard as disproportionate to their value in order to concentrate on
acreage where they have reasonably sized interests.
3.The buyer may want the operatorship of the joint venture. This can be achieved by buying the
interests of a license holding operator or by increasing the size of one’s participating interest to a
level whereby one will become the operator.
4.Proximity to local production infrastructure, platforms and pipelines is also a strong motive for
seeking a farm-in in particular vicinity, especially if the farming in party has an interest in the
infrastructure, platforms or pipelines. The farming-in party can use its vote to ensure that future
development on the concession will use the nearby facilities and so provide additional
income for it and its partners owning the nearby facilities.
5.In a situation where the party farming-in has an interest in an adjoining concession there is an
additional advantage that, as a co-owner of the data concerning the adjoining concession, it has
information which could be very valuable to its neighboring interest and, even though it will be
subject to confidentiality restrictions in the joint operating agreement, in practice it will be very
difficult to prove that the data is being used for a purpose not permitted by the joint operating
agreement.
6.A company may wish to acquire a “marginal oil field”. Marginal Fields shall be defined as fields
having the following characteristics:
• Low reserves
• Long distance from existing production facilities
• Fields with crude characteristics that arc different from current streams
• All fields with one or more wells which have not been developed by the operating
companies
• Uneconomical Producing fields (close to or past abandonment limits)
• The EOR is the third stage of Hydrocarbon production during which
sophisticated techniques that alter the original properties of the oil are used.
• Using EOR, 30-60 %, or more, of the reservoir's original oil can be extracted
compared with 20-40%using primary and secondary recovery.
• Here the CO2 is injected into the reservoir whereupon it expands and thereby
pushes the additional oil to a production well bore.
• Also dissolves in the oil to lower its viscosity and improves the flow rate of
the oil.
• This would allow storing it away from the atmosphere and hence a tool to
combat warming.

Enhance Oil
Recovery
using CO2
• Here we are visualizing a oil company which is diversified into upstream,
downstream and power plant.
• Concept of Zero emission is that we are creating a closed loop where the
where by the waste gases from refinery and power plant is being diverted
to the oil wells in closes vicinity.
The oil recovered will be send to the refinery and gas to the power plant.
• As we are also cutting down the emissions both from power plant and
refinery money can be generated from saved carbon credits.
Earning through carbon credits for the power plant
Power Plant total output of Co2 = 200000 tonnes
Cost of each carbon credit = Rs 835
Thus income from selling carbon credits from power plant is 16 Crores

Earning through carbon credits for the Refinery

Total output of co2 = 200000 tonnes
Thus income from selling carbon credits from power plant is 16 Crores.

Economics for EOR

Cost for Injection of co2 per ton is around 150.

Thus for injection of 4 lakh tonnes of co2 coming from both refinery and
power plant is costs around 4 crores.
Also considering Drilling and overhead expenses of 12 crores.
Thus the expenses involved in EOR is 16 crores.
But the oil recovered from this process is valued around 15 times the co2
injected thus amounting to around 44 crores.
Thus the profit from EOR is 44 Crores -12 Crores =32 crores.
Thus total profit gained by selling carbon credits from refinery, power plant
and EOR is 16+16+32 crores =64 Crores.
Conclusion.

The Enhanced green house effect is a global problem and requires

international cooperation.

A range of emission reduction option is necessary.

The establishment of EOR with co2 technology at scale

Requires major Investments & Encouragement.

Can be developed alongside power plants and refineries increasing the

efficiency of the process.