CAPITAL: NEW DELHI
MONETARY UNIT: RUPEE
REFINING CAPACITY: 2,113,240 B/CD
OIL PRODUCTION: 639,100 B/D
OIL RESERVES: 4.7 BILLION BBL
GAS RESERVES: 22.8 TCF
The Indian government released a study in 2000, Hydrocarbon Vision 2025, most of which was expected to become official policy.
Foreign firms had complained the lack of a comprehensive energy policy deterred them from investing in long-term projects. They also complained about the powers of state electricity boards, the tariff structure, and the government's plan to double the dividend tax to 22%.
A Ministry of Petroleum and Natural Gas official said Hydrocarbon Vision 2025 would clarify national goals "in areas like exploration, tariff, refining, (and) marketing."
Indian energy officials urged foreign firms to focus not just on exploration or products marketing opportunities but also on other infrastructure investments such as storage, pipelines, and tankers, including those for LNG.
Hydrocarbon Vision 2025 proposed that India drop its 49% limit on foreign investment in refineries, allowing 100% ownership. The document envisioned 90% self-sufficiency for India in gasoline and diesel production by 2025.
The report recommended that "stand-alone" plants (those not part of the national refining firms' networks) such as the Cochin and Madras refineries, should be merged with the bigger marketing companies to enable them to survive competition in a decontrolled oil sector in 2002.
Vision 2025 also urged the government to phase out petroleum subsidies over 2-4 years to reduce the nation's fiscal deficit. And it said the government should link the domestic price of natural gas to international prices.
India's spending for oil and gas imports to meet the rising needs of its 1 billion-plus population was expected to climb to $17.5 billion in 2001 as demand grew by 6-7%.
The country met only 30% of its petroleum requirements with domestic production.
Upstream
India launched its second oil and gas licensing round in December 2000, offering 25 land and offshore blocks in 13 basins.
Eight blocks were in deep water off the west coast, eight were in shallow water, and nine were on land. The deepwater blocks were in 400 m of water or more.
Gas Authority of India Ltd. (GAIL) joined with three large oil and gas companies to bid for some blocks. Its partners were the Royal Dutch/Shell Group, India's state-owned Oil & Natural Gas Corp., and Russian oil company Gazprom.
The government of Assam state issued an exploration license for Block AA-ON/7, said block partner Canoro Resources Ltd., Calgary. The block, in the Assam-Arakan basin of northeastern India, covered 1,934 sq km.
The license initiated a production sharing contract the Indian government issued in 1999. The exploration program was to include reinterpretation of 500 km of seismic data and the collection of 50 km of seismic, as well as at least one exploration well and possible reentries of existing wells.
Licensees would be able to access the existing five wells, two of which tested gas from multiple pay zones.
Canoro said the block was flanked by producing oil and gas fields. It said the main producing reservoirs were Miocene and Oligocene sands.
Canoro's Canadian Consortium had a 65% working interest and operated the block.
Cairn Energy PLC had a third gas find on Block CB-OS/2 off Gujarat in Western India. The Gauri wildcat, 6 km southeast of the UK independent's Lakshmi gas discovery, reached a TD of 1,286 m, encountering several hydrocarbon pay zones below 753 m.
Two zones flowed gas at a cumulative rate of 39.2 MMcfd, while a third zone flowed oil at a stabilized rate of 1,039 b/d on a 32/64-in. choke.
Cairn said the discovery, on trend with and southwest of Hazira field, could hold 100-300 bcf. An appraisal program was planned for 2001.
Enron Corp. planned to sell its stake in Panna-Mukta and Tapti oil and gas fields off India.
Enron, operator, had a 30% stake in the fields, which produced 29,000 b/d of oil and 300 million cu m of gas. They are in the Gujarat and Mumbai offshore region.
Processing
The Indian government decided to sell its four stand-alone refineries to Indian Oil Corp. (IOC) and Bharat Petroleum Co. Ltd. (BPCL) for 18 billion rupees.
Goal was to make the two public-sector units stronger and ensure that they bring more money when the government privatizes them.
IOC would get the 130,000 b/d Chennai (formerly Madras) refinery, where the government had 52.5% equity worth an estimated 6 billion rupees. It also would get the 27,000 b/d Bongaigon refinery, where the government's equity of 74.46% was worth 4.6 billion rupees.
BPCL would get the 150,000 b/d Kochi (formerly Cochin) refinery in Kerala, where the government's 55% stake was worth an estimated 7 billion rupees, and its 19% equity (1.7 billion rupees) in the 60,000 b/d Numaligarh refinery in Assam.
The sales would be completed by 2002, when the state-administered pricing mechanism was due to end.
India's Reliance Petroleum Ltd. signed a deal with Venezuelan state oil company Petroleos de Venezuela SA (PDVSA) to buy 20 million bbl of crude in 2001.
The contract was believed to be India's largest single purchase of crude from Venezuela.
The deal was for eight 2 million bbl shipments of Leona 24º-gravity crude, followed by two shipments that would be under a separate deal. The crude was destined for the Reliance-owned Jamnagar refinery in Western India.
In 2000 PDVSA sold Reliance 7.4 million bbl of Leona and Mesa 30º-gravity crudes.
Madras Refineries Ltd. planned to spend 23.6 billion rupees to modernize and expand its refinery from 6.5 million tonnes/year to 9.5 million tonnes/year.
Partners in the project were the Indian government and the National Iranian Oil Co.
LNG projects
India had set a standard for the maximum participation of foreign firms in consortia importing LNG.
The government said the Indian partner in any foreign shipping consortium bidding to transport LNG for government-owned Petronet LNG Ltd. must be given at least 26% equity.
Petronet announced a bidding tender for the transportation of 7.5 million tonnes/year of LNG for 25 years from Ras Laffan Liquefied Natural Gas Co. of Qatar (RasGas). Destinations were planned LNG terminals at Dahej, Gujarat (2.5 million tonnes/year), and Cochin, Kerala (5 million tonnes/year).
The first shipment of Qatari LNG to Petronet was scheduled for July 2003.
The government formed Petronet LNG in 1998 by distributing a 10% equity holding to each of five government-run companies: IOC, GAIL, Hindustan Petroleum Corp., Bharat Petroleum Corp., and National Thermal Power Corp. The remaining 50% equity was offered to private companies and strategic partners.
GAIL would invest 5 billion rupees to upgrade its existing pipelines for transportation of gas from the LNG joint venture.
CMS Energy Corp. and the Aditya Birla Group of India concluded a joint development agreement with the government-owned Power Trading Corp. on the $1.6 billion Ennore LNG and power project in Tamilnadu.
The Ennore project would consist of an LNG import, storage, and regasification facility that initially would import 2.5 million tonnes/year from RasGas.
The project would provide gas to the Ennore power plant and a natural gas pipeline system designed to serve growing industrial centers throughout southern India. Dakshin Bharat Energy Consortium would own and operate the gas pipeline.
An IOC-lead consortium was bidding to develop LNG import facilities and related businesses at Kakinada port in Andhra Pradesh on India's eastern coast.
The project would import the LNG at Kakinada and market the regasified product in Andhra Pradesh. Malaysia's Petronas, a 10% partner, would supply the LNG.
BG PLC, Royal Dutch/Shell Group, and Enron prepared a similar offer. The proposal included LNG receipt, storage, and regasification facilities at the port and distribution of gas through a pipeline to consumers in Andhra Pradesh and neighboring states.
