1. CHALLENGES IN THE UPSTREAM HYDROCARBON SECTOR V. K. Sibal Director General Directorate General of Hydrocarbons New Delhi

2. Current Scenario Specifics of E&P Industry Challenges Way forward - Policy Reforms Conclusions PRESENTATION OUTLINE

3. Sedimentary Area : 3.14 Million Sq. Km. >4% of the world’s sedimentary area Sedimentary Basins : 26 Exploration initiated in 15 Prognosticated Resources : 205 Billion Barrels of O+OEG For 15 Sedimentary Basins only; needs up-gradation Established reserves : 60 Billion Barrels of O+OEG (As on 01.04.2005) RESOURCE BASE CURRENT SCENARIO

4. EXPLORATION STATUS Only 19% of the total 3.14 million sq. km. has been extensively explored < 30% of total prognosticated resources established Reserves estimated in only 15 out of 26 basins Very low drilling density Only 19% of the total 3.14 million sq. km. has been extensively explored < 30% of total prognosticated resources established Reserves estimated in only 15 out of 26 basins Very low drilling density Initiated 37% 22% 19% 22% Poorly Explored Poorly Explored Unexplored Well Explored Well Explored CURRENT SCENARIO

5. SPECIFICS OF E&P UPSTREAM Knowledge & Technology Intensive Cost sensitive Inexact Science

6. Stagnant oil and gas production Increasing Domestic Demand Rapidly Growing Economy Declining self sufficiency Requiring intensified exploratory efforts CHALLENGES ……..

7. OIL & GAS DEMAND, PRODUCTION & IMPORT TRENDS To Bridge the gap is the greatest challenge

8. KEY ISSUES Technology / Knowledge Gap Theoretical R&D Scattered Geoscientific Information Energy Policies - Misplaced

9. KNOWLEDGE GAP Academia Outdated curriculum in Academia No coordination between Industry, Academia and Policy makers Divergent Objectives Practically no contribution to Industry R&D Irrelevant to Market

10. KNOWLEDGE GAP Industry Applied R&D ( Relevant to Market ) - Non existent Largely dependant on borrowed Technology & Knowledge Misplaced Strategies Poor interaction with Academia Stagnation of knowledge & technology in the Service sector

11. R&D not Business centric Emphasis on inputs from Academia R&D not of International Standard Theoretical R&D

12. SCATTERED GEOSCIENTIFIC INFORMATION SCATTERED GEOSCIENTIFIC INFORMATION Insufficient information on availability of data Lack of understanding for release of data by various agencies Lack of Centralized National Data Repository for the entire energy sector Data confidentiality issue – prevalent of old myth

13. INTEGRATED ENERGY APPROACH Integration of Energy related Ministries Formation of Apex body to regulate Energy Sector Free Data / Knowledge Exchange Mechanism for effective coordination

14. WAY FORWARD

15. POLICY REFORMS National Level Apex body ConventionalNon - Conventional Scientific, Technical & Research Bodies Energy Free data/Knowledge flow Effective coordination Dynamic Forecasting Centralized NDR

16. POLICY REFORMS National Level Policy on Geoscientific Information  National Data Repository  Sharing of data in public domain  Regulation regarding acquisition, archival & distribution of data Policy for E&P Service Sector

17. POLICY REFORMS Company Level Restructuring the Boards distancing CEO & CFO from the Board. Proper representation of Core competencies within the Board NOCs to focus on areas of their core competency. HRD to be aligned with the Company Objective Curriculum policy for Academia in consultation with the Industry R&D to be Market relevant

18. CONCLUSIONS Policy on curriculum for School / College & University level based on interaction with Industry Policy on Data availability for Academia, Industry & Public to boost R&D Synergetic approach through administrative reforms Policies for incentive based E&P Services Infrastructure Restructuring of PSUs for effective governance

19. POINTS TO PONDER Forecasting Energy Portfolio Related Infrastructure Integrated Approach Mass storage systems Evacuation Parallel actions for technology changes w.r.t. changing fuels Thank You CONCLUSIONS