Low recovery of oil and gas from domestic fields and growing sentiment against fossil fuels have led to the government deciding to move ahead to monetise undeveloped fields and mature fields with falling output, according to government officials.
Petroleum Minister Dharmendra Pradhan said that government companies cannot hold on to undeveloped resources indefinitely and suggested that these companies should seek to find technology partners or investors who can bring the expertise to monetise such fields quickly. India imports more than 85 per cent of its crude oil requirements.
“There is a sentiment developing against fossil fuels if you look at the latest report by the IEA (International Energy Agency) and the judgment against Shell. So people will be reluctant to invest in oil and gas (in the future) and what may happen is that the resource in the ground might remain there unless we monetise it quickly,” said a government official who wish to be anonymous.
The IEA had last month published a report recommending a halt on all new oil and gas investments to reach a goal of net-zero carbon emissions by 2050. Separately, a Netherlands court has ruled that oil and gas major Shell must cut its carbon dioxide emission by 45 per cent by 2030 relative to 2019 levels.
The output of two of the country’s major upstream players, ONGC and Oil India, have fallen over the years, even as India aims to lower its dependence on imports. To ensure their resources are utilised more, the Centre has proposed finding technology partners or investors who can bring the expertise to monetise such fields.
“Whatever resource we identify underground, hardly 30-40 per cent are recoverable (by state-owned companies), why not 50-60 per cent?” said the official, noting that the Centre wanted to expand oil and gas development activity in the country and bring in more players so that new technology is brought into the domestic hydrocarbon production sector to increase the recovery factor of fields.
“If there is good management and execution, the recoveries can be increased,” he said, adding that even relatively new fields such as ONGC’s KG-DWN-98/2 field could benefit from expertise of large private players in recovering reserves in ultra-deepwater fields.
Crude oil production by both state-owned upstream players ONGC and Oil India has fallen over the past five years, with natural gas production remaining stagnant despite both companies reporting net additions to their crude oil and natural gas reserves through new discoveries and acquisitions. India’s crude oil production has fallen from a peak of 38.1 million metric tonnes in FY15 to 30.5 million metric tonnes in 2020-21.
