Houston Hosts Roadshow for India’s “Discovered Small Fields” Bid Round


Standing at the roadshow podium, Petroleum & Natural Gas Minister Dharmendra Pradhan (center) with Houston Consul General Anupam Ray (far left) and officials from the Directorate General of Hydrocarbons (DGH). The minister remotely inaugurated the ONGC data room in downtown Houston and also launched the DGH One Touch app.

By Pramod Kulkarni

HOUSTON: As the energy capital of the world, it was fitting that the City of Houston was the launching site for the roadshow to promote the India’s latest oilfield licensing round to Western oil and gas operators, service companies and investors. In the coming days, the roadshow will continue to Calgary and London.

The Houston roadshow took place July 14-15 at the Hilton Post Oak hotel. More than 170 registrants heard details of the Discovered Small Fields (DSF) bid round from the Indian delegation led by Dharmendra Pradhan, Minister of State for Petroleum & Natural Gas (see box) and heads of the Directorate General of Hydrocarbons (DGH) and public sector oil and gas companies such as Oil & Natural Gas Corporation (ONGC), Oil India Ltd., Indian Oil, and GAIL (Gas Authority of India Ltd).

The DSF bid round offers 46 contract areas with 25 onshore fields, 18 fields in shallow water and two in deep water.  These are fields that have been discovered by ONGC and Oil India, but have not been brought under production for a variety of reasons. The fields are supported by 2,042 km of 2D seismic data, 1,336 sq km of 3D data and downhole data from 130 wells. With this information, it should be relatively easier for operators to start production. These fields are expected to have in place 625 million barrels of oil and oil equivalent.

The roadshow has been organized under the direction of KPMG, the international advisory group. KPMG partner Anish De served as the emcee for a series of presentations. Offering independent assessments of the DSF bid round were Mike Watt, CEO of Magna Energy and former executive with Cairn Energy, which is operating several fields both onshore and offshore in India. The second international speaker was Rachel Calvert, Petroleum Sector Risk Manager for IHS, a leading petroleum data provider.

During two days of the conference, the Indian delegation held a breakfast reception with local executives and an interactive session with members of the Indo-American Chamber of Commerce of Greater Houston (IACCGH). Dinner receptions also took place at the home of the Consul General.

For the Houston event, the Consulate General of India in Houston served as the host with newly appointed Consul General Anupam Ray taking a personal interest in making the roadshow a success. Assisting CG Ray in this effort were embassy staff members and local representatives of Oil India (USA), ONGC and GAIL Global USA.

In his opening remarks, CG Ray described his recent meetings with Houston Mayor Sylvester Turner and Texas Governor Greg Abbott. Ray said both Turner and Abbott have expressed interest in visiting India. Despite the fact that India was one of the world’s first area of oil and gas exploration, indigenous production has not kept pace with India’s growing energy consumption due to population growth as well as rising economic growth. At present, India needs to import as much as 75% of its energy needs.

India is a particularly attractive region for oil and gas investment at this time because of the global slowdown in exploration and production projects due to the decline in both oil and gas prices. India’s GDP is growing at the world-leading rate of 7.6%. As such, any oil and gas production in India can be marketed and sold within the country itself.

Despite the economic attractiveness of India’s oil and gas sector, the Modi government’s announcement of its first licensing round in May 2016 occurred at a time when there was a trust deficit with Western audiences due to the faltering of the Congress government’s New Exploration Licensing Policy (NELP) as a result of government interference in product pricing and operational activities.Taking lessons from NELP’s deficiencies, the Modi government has recast its oil and gas policy as HELP (Hydrocarbon Exploration & Licensing Policy). Whereas NELP was set up as a production sharing contract, HELP has changed the licensing process into a revenue sharing agreement. As a result, the government no longer has the incentive to constantly review the operator’s development and production plans, and the operator has the marketing and pricing freedom for its gas production

As a consequence of HELP reforms, India’s ranking for energy investment in Asia has risen ahead of Malaysia and Indonesia, according to IHS’ Rachel Calvert. Another incentive for Western operators is the lower cost of production in India. Mike Watt of Magna Energy explained that the direct cost of production from the Ravva basin was only $1 per barrel. In comparison, cost of production in most U.S. shale plays has to be above $40 per barrel!

India’s Pradhan of Petroleum


HOUSTON: Narendra Modi is certainly India’s Pant Pradhan (Prime Minister). With a degree in anthropology and passion for youth leadership, one would not have expected Minister Dharmendra Pradhan to be knowledgeable about his ministry’s complex technical and economic aspects. True to his surname, however, Mr. Pradhan has applied himself and truly become the pradhan of India’s petroleum and natural gas supply and demand situation and the policies required to reduce India’s 75% energy import bill.

A native of Odisha, Pradhan began his political career as a youth leader. He rose through the ranks in the Rashtriya Sevak Sangh (RSS), and subsequently, the ruling Bharatiya Janata Party (BJP).

Pradhan was elected to the Rajya Sabha in March 2012 from Bihar state. Earlier, he was a member of the 14th Lok Sabha of India, representing the Deogarh constituency of Odisha. He is the son of former BJP MP Dr. Debendra Pradhan.

During an interview with Indo-American News, Minister Pradhan reiterated that it is the goal of the Modi government to reduce India’s oil import dependence by 10% by 2022 when free India turns 75.

“One of the ways to reduce this import dependence is by augmenting production,” explained Minister Pradhan. “We are implementing three strategies to increase production. The first is through new policies that reduce government interference and new technologies such as EOR. The second strategy concerns biomass. India is an agrarian country with potential for converting bio waste into biofuels. The third strategy is promoting conservation.”

This policy of “minimum government and maximum governance” bodes well for India’s energy expansion.