Unfortunately, because of either lack of consumers onshore or the absence of compression and dehydration facilities offshore, 43 per cent of offshore gas had to be flared in 1984-85. The flaring is expected to be largely eliminated by 1986-87. The flaring of onshore gas was more in the north-eastern region.
6.35 The important lessons learnt while implementing the Sixth Five Year Plan are:
(a) The individual discoveries and finds made were, in general, small, suggesting that a similar pattern could prevail in the Seventh Plan as well. Hence the need for intensifying exploration as well as for extending exploratory activities to inadequately explored and unexplored basins. (b) Results obtained during drilling indicate the need for more meticulous planning and preparation for drilling in those areas, where, due to either greater depths or abnormal conditions, high pressures and temperatures may be encountered. Since future exploration would involve deeper drilling as well as drilling in such abnormal areas, it is expected to be both costlier and time consuming. (c) With encouraging results obtained from water- injection technology, its application to other areas is desirable. If not, effective application of other suitable enhanced 'oil recovery (EOR) techniques would be required.
6.36 These factors have been taken into account in formulating the strategy for the oil industry in the Seventh Plan.
Seventh Plan:
Crude Oil and Natural Gas 6.37 Exploration: The total area of sedimentary basins is of the order of 1,720,000 sq.kms. of which the offshore sedimentary area upto 200m depth amounts to 3,20,000sq.kms. This area is divided into 26 sedimentary basins of which 13 are of immediate interest and have been taken up for hydrocarbon exploration. These 13 basins can be divided into three categories as follows:
Category I Petroliferous basins with proved commercial production, e.g. Cambay basin, Upper Assam Shelf, and Bombay off-shore basin.
Category II Basins with known occurrence of hydrocarbons, but where no commercial production has yet been obtained, e.g. Rajasthan, Cauvery, Krishna- Godavari, Andaman, Bengal, Himalayan Foothills and Ganga Valley and Tripura-Nagaland fold belt.
Category III Basins in which significant shows of hydrocarbons have not yet been found. However, on general geological grounds these basins are considered to be prospective, e.g., Kutch-Saurashtra, Kerala-Konkan and Mahanadi.
6.38 A few other sedimentary basins may be prospective on the basis of analogy with similar hydro-carbon-producing basins in the world. These basins (Category IV) are Gondwana basin, the Vindhyan basin and Deccan Syneclise.
6.39 As stated earlier, the prognosticated resources of hydrocarbons are about 17 billion tonnes of which 63 per cent are offshore and 37 per cent onshore. 60 per cent of prognosticated resources are in Category I, 30 per cent are in Category-II and 10 per cent are in Category-III. Out of these, the established geological reserves of hydrocarbons (upto 1-1-1984) are 4 billion tonnes, the distribution of which is 99.2 per cent in Category-I, 0.8 per cent in
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Category-II and nothing in Category-III. About half of the theoretical hydrocarbon reserves are in the form of natural gas and only 10 per cent of these could be established so far. The gas discoveries therefore hold great promise for the future.
6.40 Most of the exploratory activities upto early 1960s were concentrated in Cambay basin and Upper Assam Shelf. The token efforts made in other basins resulted in the discovery of some small gas pools in isolated reservoirs of Tripura, Rajasthan and Jwalamukhi area of Himachal Pradesh. Remarkable success was achieved in the early seventies in the offshore leading to discovery of a number of large and small oil and gas fields including the well known big Bombay High oil field and Bassein gas field. The exploration programme of the late 1970s and early 1980s yielded some success in finding oil and gas in the Andaman, Krishna-Godavari and Cauvery basins.
6.41 The experience of exploration in the recent past has shown that additional reserves of oil in Category-I basins would be in the subtle structural and stratigraphic traps and individual accumulations may be small in the majority of cases.
6.42 While in the Sixth Plan the exploratory metreage drilled in the onland basins of Category-II and Category-III taken together was around 24 per cent of the total exploratory effort, in the Seventh Plan as much emphasis would be given to these basins as to the Category-I basins. Though high-risk, Category-II and Category-III basins could also be high-reward areas. Besides, these areas need long lead time for establishing production potential and production facilities prior to commercial exploitation. Unless adequate action is taken now in establishing the hydrocarbon potential of Category-II and Category-III basins during the Seventh Plan period, it would be impossible to sustain the existing level of production during the subsequent Plan periods. In planning the exploratory metreage for the different basins, it may be necessary to alter the inter-se priority depending upon the feedback from continuous monitoring of the exploratory drilling. Important targets for exploration are given in Table 6.4.
TABLE 6.4
Targets for Exploration Activity in the Seventh Plan
ONGC OIL
1. Geological and gravi-magnetic survey
(party years) 10 75
2. Onland seismic surveys (party years) 284 38
3. Offshore seismic surveys (thousand line kms) 140 17
4. Onland exploratory drilling (thousand metres) 1703 346
5. Offshore exploratory drilling (thousand metres) 710 62
6.43 The total exploratory metreage of 2821 thousand metres planned for the Seventh Plan, involves a step up of 192 per cent on the Sixth Plan achievement of 963 thousand metres and as a result it is expected to add 956 million tonnes of geological reserves of oil (gross recoverable reserves 235 million tonnes) and 497 billion cu. metres of geological reserves of gas (gross recoverable reserves 331 billion cu. metres).
6.44 In view of the need to step up considerably exploration activity and extending it to new areas having logistical and technical problems, it may be advantageous to attract some foreign oil companies. Their contribution to the total exploration effort may be marginal but they could bring in new technology and practices. It is, therefore, necessary to study the current terms and conditions on which they are being contracted to explore in other countries and then decide a contracting strategy for foreign firms.
6.45 Development and production: The crude oil and gas production from onland and offshore areas of ONGC and OIL is given in Annexures 6.1 and 6.2. It can be seen that domestic oil production would increase from 30.14 million tonnes in 1985-86 to 34.53 million tonnes by the terminal year of the Seventh Plan.
6.46 ONGC would be stepping up crude oil production from Cambay and Upper Assam and Nagaland areas. The oil production from Cambay basin would increase from 3.91 million tonnes in 1984-85 to 6 million tonnes by 1989-90. This increase in oil production from Cambay basin would be due to further development of various fields, particularly the final development of Kalol field and development of heavy oil fields in north Gujarat areas. There would be doubling of oil production from ONGC areas of Upper Assam and Nagaland from 2.21 million tonnes in 1984-85 to 4.4 million tonnes by 1989-90. From onland areas of ONGC the total production of crude oil during the Seventh Plan would, therefore, be 41.33 million tonnes against the production of 26.66 million tonnes during the Sixth Plan.
6.47 OIL would mainly concentrate on maintaining the crude production rates from their ageing fields of Naharkatiya and Moran. Both these fields would require additional development drilling and speedier recovery of sick wells to offset the decline in oil production. OIL would produce annually 3.03 million tonnes during the first four years of Seventh Plan, increasing it to 3.38 million tonnes by 1989-90. Thus OIL would be producing 15.50 million tonnes of oil during the Seventh Plan against 12.74 million tonnes in the Sixth Plan.
6.48 As regards projected offshore exploitation (ONGC), oil production in the Seventh Plan would be
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more or less at the same level as in 1984-85. The oil production from west coast offshore would increase from 20.14 million tonnes in 1984- 85 to 20.75 million tonnes by 1989-90. So far as development activities in west coast offshore during the Seventh Plan are concerned, ONGC would carry out further implementation of the accelerated production plan as per the revised assessment. In the case of Bombay High field the main effort would be on sustaining the desireable level of oil production besides achieving a uniform production from the reservoirs. Based on a joint study by ONGC and its foreign consultants, additional platforms would be installed particularly in the southern part of Bombay High for sustaining the production rate as well as increasing the recovery of oil. Peripheral water injection in Bombay High south would start during 1985-86 with installation of the main injection platform (WIS) and water injection well platforms. The peripheral water injection in the southern part would be augmented by updip injection lines from 1987 onwards by converting some of the oil-producing wells into water injection wells. The development of Heera oil field would continue and peak production rate of 1.25 million tonnes is expected to be attained by 1989-90. The full scale development of Panna oil field would be taken up only after the results of trial production, using an early production system (EPS), become available. The EPS system is scheduled to start from 1986-87 with a production rate of 0.05 million tonnes per annum. If the results of trial production are positive, Panna field would be developed during the Seventh Plan. The production from Panna field, is, however, not included in the production profile. Many marginal oil and gas fields have been discovered in Bombay and Ratnagiri areas. ONGC would be developing some of these fields during the Seventh Plan by using one well platform with or without EPS for each field. The marginal fields would be first delineated by exploratory drilling and thereafter the development plans would be prepared. It is expected that development plans would be finalised by 1986-87. The marginal fields are expected to produce nearly 4 million tonnes of crude oil during the Seventh Plan period.
6.49 In terms of development drilling programme, ONGC would be drilling about 1725 thousand metres in onland basins and 717 thousand metres in offshore basins. Similarly OIL would be drilling 567 thousand metres in onland areas of Upper Assam and Arunachal Pradesh. Thus a total of 3009 thousand metres of development drilling has been planned during the Seventh Plan. Compared to the Sixth Plan achievement of 1210 thousand metres, the step-up in Seventh Plan works out to about 149 per cent.
6.50 Therefore a total of 159.14 million tonnes of crud oil is expected to be produced during the Seventh Plan 102.31 million tonnes would be from west coast offshor whereas the balance 56.83 million tonnes would be from onland areas.
6.51 Gas Production and utilisation: Natural gas (free+ associated) will emerge as an important source of energy and feedstock during the Seventh Plan. Gas production which was 7.2 billion cu.metres (19.7 cu.metres per day) in 1984-85 is likely to increase to 14.9 billion cu. metres (40.8 million cu. metres per day) by 1989-90. This increase in gas production would be mainly on account of commercial production of free gas from South Bassein field in Bombay basin. The gas production profile is given in Annexure 6.2.
6.52 In the case of gas the five main aspects are (i) availability, (ii) transportation, surface handling facilities and treatment etc., (iii) fractionation, (vi) downstream utilisation, and (v) conservation.
6.53 So far as availability is concerned, ONGC is producing both free and associated gas from Cambay basin, whereas only associated gas is being produced from Upper Assam basin. The increase in gas availability from these basins would be mainly due to step-up in crude oil production. As regards gas production from Assam-Arakan fold belt (Tripura), free gas fields would be developed for commercial production. The biggest increase in gas availability during the Seventh Plan would be from South Bassein gas field starting from 1986- 87. It has been envisaged that South Bassein would attain a peak production rate of 20 million cu. metres per day by 1987-88. Further, the free gas production from west coast offshore may increase to 21 million cu. metres per day in 1989-90 with development of a satellite gas field in west coast. In case of OIL, the production of associated gas has already reached the peak level and a gradual decline would set in during the Seventh Plan.
6.54 As regards surface handling, transportation and gas treatment, no major activity would be required in onland basins except that an integrated gas grid may be installed in Upper Assam of ONGC depending on downstream demand. In regard to offshore gas there would be several important activities. Additional gas compression and dehydration facilities would be commissioned at SH and NQ process complexes during 1985-86. With the commissioning of these facilities it would become possible to send all the associated gas produced from Bombay High to shore-based facilities. A gas trunk pipeline connecting South Bassein to Hazira is being laid. Interconnection has also been provided between Bombay High-Uran gas pipeline and South Bassein-Hazira pipeline. At Hazira a gas receiving terminal is being established along with gas sweetening, condensate treatment and sulphur recovery plants. With the completion of Phase I of gas sweetening plant by end 1986 it would become
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possible to produce gas from South Bassein at a daily rate of 10 million cu. metres. It would also be necessary to complete Phase II of gas sweetening plant in order to achieve the rate of 20 million cu. metres of gas per day from South Bassein by 1987-88. The work on laying of cross-country H-B-J gas pipeline would be completed during the Seventh Plan, along with enroute gas compressor stations. Additional gas fractionation facilities for recovery of C2/C3 fractions would be set up at Uran. These fractions will form the feedstock for Maharashtra Gas Cracker Complex at Nagothane. As a result of commissioning of gas fractionation facilities at various locations, the production of LPG and NGL would increase during the Seventh Plan.
6.55 The flaring of gas is expected to be reduced considerably during the Seventh Plan. In the west coast, the flaring of gas from Bombay High field is expected to be eliminated on completion of additional gas compression and dehydration facilities. With the commissioning of gas-based fertiliser plants at Thal Vaishat and Hazira, the associated gas produced from offshore would be largely used as feedstock for manufacture of fertiliser. In addition to the above, some gas would continue to be used for power generation in Bombay on a fall-back basis but availability of gas for power generation would depend on gas requirement of fertiliser plants at Thal Vaishat and commissioning of C2/C3 recovery facilities at Uran. The production of free gas from South Bassein would be mainly regulated by the commissioning and capacity build-up of gas-based fertiliser plants being put in Madhya Pradesh, Rajasthan and Uttar Pradesh and utility power generation plants to be constructed in Gujarat, Rajasthan and Uttar Pradesh. With the increase in oil production from western region, Cambay basin, the availability of gas would also increase. Large quantities of gas have been flared in Assam area in the past. On the basis of present and future commitments in that region there would be no significant surplus gas but in actual practice the gas surplus may continue on account of lesser offtake than the committed quantities by the downstream users and problems with surface gas-handling facilities mainly the gas compression facilities of OIL. Gas utilisation in the North-Eastern region is presently being examined by an Expert Group. Commercial production of gas in Tripura will start from 1985-86. Since the production potential of gas is higher, suitable downstream utilisation schemes should be identified.
6.56 Conservation of surplus gas by reinjecting it back into the reservoir either for pressure maintenance/EOR or for storage needs to be examined. This is particularly relevant to the west coast offshore satellite fields and the North-Eastern region.
6.57 A long-term policy of utilisation of gas is to be evolved with particular reference to substituting gas for middle distillates. The importance of this exercise becomes relevant if the forecast of the experts that by the end of the year 2000 hydrocarbons production of 100 million tonnes may be in equal proportions of gas and oil is realised. On the other hand, our consumption of petroleum products alone may be about 90 million tonnes.
6.58 Technology: For enhancing the oil/gas finding capability, the oil companies should continue the policy of quick adoption of modern and advanced technology developed in many parts of the world. Acquisition of reliable geological data using modern surface and bore- hole survey technique is one of the areas where use of such advance technology is essential. There will be increasing use of computers in geological correlation, geophysical data processing and reservoir simulation studies. The import of software packages will have to be continued so that no time is lost in carrying out sophisticated computer based studies.
6.59 While dependence on imports in the high technology area will continue, progressive indigenisation of oil field equipment would be supported by ONGC and OIL. It will, however, be necessary to ensure that the quality and delivery schedules of local substitutes are maintained. Indian companies or joint venture companies for providing different oil/gas field services would continued to be encouraged.
Petroleum Products 6.60 Consumption of petroleum products: During the Sixth Plan, the consumption of petroleum products grew at the rate of 5.3 per cent. In the Seventh Plan, it is expected to grow at the rate of 6.4 per cent, reaching about 53 million tonnes in 1989-90. The consumption of middle distillates has been growing at the rate of 6.6 per cent in the Sixth Plan and is likely to grow at the rate of 6.8 per cent in the Seventh Plan, being about 59 per cent of the total consumption in 1989-90. At these growth rates, the consumption of petroleum products may reach about 90 million tonnes by 2000 with the middle distillates constituting about 66 per cent (see Table 6.5).