Contrary to popular perception, state-owned oil and gas explorers are not lagging behind their private sector counterparts in adding to their reserves and bolstering the country?s energy security.
According to data on commercially recoverable hydrocarbon reserves (ultimate oil reserves, in jargon) with public, private and joint venture entities since 1997-98 reviewed by FE, India?s largest explorer ONGC has steadily increased the size of these reserves ? which get depleted with use ? over the last 15 years by constantly finding new reserves. The state-run firm, which added reserves of just 15.82 million tonnes (mt) in 1997-98, managed to raise this to 85.44 mt in 2011-12. ONGC?s new find in the Bombay High region a few days ago alone will add another 50 mt in 2012-13.
The new reserves added by all private sector companies including Reliance Industries and Cairn India and their joint ventures with the PSUs stood at 6.85 mt in 1997-98 and rose sharply to 178.74 mt in 2004-05 before falling to 40.4 mt in 2010-11. Of course, the rate of increase in both cases is almost the same ? a five-fold rise ? but the private companies haven?t been able to excel state-run firms or significantly increase their share in overall reserves over the period.
When it comes to in-place reserves, which represents the total volume of hydrocarbons discovered, the private sector has some big strides to its credit like the KG D6 gas discovery by Reliance.
The public sector adds to this pool in a less-publicised but steady manner. Data put out by the Directorate General of Hydrocarbons for ONGC doesn’t include its reserve accretion from the pre-NELP rounds, while the accompanying chart takes these also into account. DGH data doesn’t include results from ONGC’s Enhanced Oil Recovery (EOR) programme in its Bombay High field.
?This discovery indeed has come up with a lot of promise signifying a substantial increase in the production for the company. Finally, we have made it to a large discovery which was eluding us for long,? Sudhir Vasudeva, chairman and managing director ONGC said on Saturday while announcing the PSU’s latest discovery.
The explorer recently notified four discoveries in last one month in the region of Tamil Nadu, Andhra Pradesh and sectors of western offshore basin in Mumbai. The company discovered a new pool of reserves in the D1 block and on completion of the field D1, production is expected to go up to 60,000 barrels of oil per day.
ONGC’s ability to keep up its exploration pressure, however, will depend critically on government policy. Vasudeva is on quote saying that unless the government allows ONGC to get a $55 per barrel recovery, its expansion plans will be badly affected ? currently, ONGC has a net recovery of around $47 per barrel, as it gives the rest away by way of subsidies to PSU oil marketing firms.