ROLE OF OIL & GAS SECTOR REGULATOR TO ACCELERATE INVESTMENT IN INDIA

Indian Oil & Gas Sector Statistics Domestic E&P oil – 30 mmtpa Refining Capacity – 160 mmtpa Product Consumption– 128 mmtpa Gas production– 31 bcm Consumption – 39 bcm LNG Import:  5 mmtpa – long term  1 mmtpa- spot

Indian Oil & Gas Sector Statistics Contd... Pipeline (Gas)  Transmission – 4000 kms  Distribution – 4500 kms  Regional Network – 7 nos. Pipeline (Products)  LPG kms.  Other petroleum Products kms.

Indian Oil & Gas Sector Statistics contd… City Gas Distribution (CGD)  Sixteen Cities  Approx million vehicles on CNG  Approx million dwelling on PNG

India – the great country Area – sq. kms. (Approx. 3.3 million sq.kms.) Population – 1028 million (as of ) States – 28 Union Territory – 7 Therefore;  More E&P activities in oil & gas  More Infrastructure  More Gas  More Investment

India-Africa Oil & Gas sector comparison Reserves India Africa*  Oil (kmbbl) 5.7(0.5%) 17.2(9.7%)  Gas (tcf) 37.95(0.6%) (7.8%) Production  Oil (kbbl) 807 (1%) 9990 (12.1%)  Gas (bcm) 31.8(1.1%) (6.3%) o Consumption  Oil (kbbl) 2575 (3.1%) 2790 (3.4%)  Gas (bcm) 39.7 (1.4%) 75.8 (2.6%)

India-Africa Oil & Gas sector comparison contd… Country* Oil gas Algeria ^ ^ Angola ^ Chad ^ Egypt ^ ^ Equatorial guinea ^ Gabon ^ Libya ^ ^ Nigeria ^ ^ Sudan ^ Tunisia ^ Others ^ ^

More Investment Investment is required in  E&P – Oil & Gas  Rigs for Exploration  Refining  Pipeline – transmission and distribution  CGD – infrastructure, equipments & fittings, project implementation  Gas trading  Storage – Oil, Gas (UG,LNG)

Contd...  LNG Terminal  LNG Shipping  Marine Facilities  Port Development  Establishing ROs  Consultants along value chain (E&P to Retail)

Proposed investment XI five Year Plan( ) -Gas value chain Gas transmission pipelines Rs. 21,121 Crores LNG terminals Rs. 9,220,, CGD Rs. 9,000,, Total ( Gas Value Chain) Rs. 39,341,,  Based on the report of the working group on Petroleum& Natural Gas

Proposed Investment Oil& Gas sector-XI five year plan OVL Rs. 58,674 Crores ONGC Rs. 82,672,, OIL Rs. 10,176,, GAIL Rs. 12,159,, IOCL Rs. 45,215,, HPCL Rs. 32,285,, BPCL Rs. 12,553,,

Proposed Investment Oil& Gas sector-XI five year plan contd… CPCL Rs. 3,825 Crores BRPL Rs. 2,020,, MRPL Rs. 8,561,, NRL Rs. 498,, Bal.Lawrie Rs. 205,, Biecco,, Rs. 34,, RGIPT Rs. 174,, Total Rs. 2,69,049,,

Proposed Investment Oil& Gas sector-XI five year plan Upstream Rs.159,161 Crores= m$ Refining Rs. 81,545,, 20000,, Gas Sector Rs. 13,079,, 3200,, Marketing Rs. 6,080,, 1500,, Crude (P/L,Terminal) Rs. 4,230,, 1000,, R&D Rs. 1,418,, 350,, Other Incl.RGIPT Rs. 3,536,, 900,, Total Rs.2,69,049,, 66750,,

Kind of Investors Infrastructure Developers Consultants Equipment Manufacturers Pipe, Fitting, Meter Regulator and Metering, CNG Kit etc. manufacturers Contractors

Kind of Investors contd… E&P Specialists Marketers Energy specialist Large investment funds Investment Companies (FIIs)

Functions of the Regulator Protect interest of consumer – foster fair trade and competition Register entities to -  Market (P,PP&NG)  Establish LNG Terminal  Establish Storage Facilities Authorize entities to  Lay, built, operate or expand pipelines  Lay, build, operate or expand CGD networks

Functions of the Regulator… Declare pipelines as common carrier or contract carrier Regulate by regulations-  Access to common carrier  Transportation tariff  Access to CGD

Functions of the Regulator… In respect of notified P,PP& NG  Ensure adequate availability  Display price  Monitor prices, prevent restrictive trade practice  Secure equitable distribution for P,PP& NG

Functions of the Regulator…  Provide by regulation and enforce  Marker service obligations for entities  Retail service obligations for ROs  Monitor transportation rates, prevent restrictive trade practices  Maintain data bank on Petroleum, PP&NG  Lay down Technical and Safety stds for d/s Petroleum & NG sector

Functions of the Regulator… Levy fee and other charges Other functions as entrusted by Govt.

PNGRB conducive to investment growth- Benefit to Consumer To get access to P,PP&NG No monopoly Safety in services Price display – mandatory Better services through competition Retail service obligations – quality of products & services, complaint redressal

PNGRB conducive to investment growth- Benefit to Consumer… Codes/standards/best practices to –  improve quality of products & services  ensure safety Environmental benefits – use of CNG/PNG Genuine price – market determined Economy in transportation – regulator decides tariff by regulation

PNGRB conducive to investment growth Foster Fair Trade Create Competition Selection of entities on transparent way- rules of the game pre determined by regulations Determine pipeline tariff by regulation Pipelines as common carrier or contract carrier

PNGRB conducive to investment growth… Open access to pipelines transportation Access code by regulation Infrastructure status to pipelines and CGD Market determined pricing Access to Information- Registration, Authorization, Dispute resolution etc. FDI allowed Independent Regulator- PNGRB

PNGRB conducive to investment growth… Fair chance of selection/ success Unbundling Affiliate code Nascent Gas Market- First mover advantage New Gas finds Additional Gas Sources  CBM  Insitu gasification- Coal/Lignite

PNGRB conducive to investment growth…  LNG import  Bio gas  Gas from stranded/ Isolated, marginal fields  LNG by tankers  Hydrogen for transport sector

PNGRB conducive to investment growth… Dispute resolution made easy-  Disputes between entities-PNGRB to resolve  Appeal to Appellate tribunal against PNGRB decision  Appeal to Supreme Court against the decision of Appellate tribunal

PNGRB conducive to investment growth… Obligation of entities  Maintain documents/ records-show to PNGRB on demand  Comply with marketing service obligations  Monitoring of conditions of Registration/ Authorization  Obliged to carry out the directions of the Board

PNGRB conducive to investment growth… Govt. Initiatives  Support for the sector - PNGRB established  FDI allowed-100%  Gas Advisory Body (GAB)  Long term plan- National Gas Grid Sourcing Gas – LNG, Cross Boarder Pipelines National Gas Hydrate plan Infrastructure status for Pipelines

Issues Pricing P,PP&NG distribution Subsidy Management Transportation tariff – Pipelines & CGD Mandating codes, standards, best practices including safety standards Common Carrier/Contract carrier Open Access

Issues contd… Access Code Gas availability – new sources Gas trading Entity selection for CGD Exclusivity Existing CGD entities Unbundling Affiliate code of Conduct

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