13926877 SWOT Analysis on Power Generation Industries | Oil Refinery | Renewable Energy

Indian Energy Scenario

Karan sahani

Agenda
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Overview Exploration Refinery and Pipelines


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Natural Gas
New and Renewable Energy Power


Regulatory Framework
References

© Det Norske Veritas AS. All rights reserved

15 July 2012

Slide 2

Overview

World Overview

India Overview
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35% of world energy need is supplied by crude oil, 25% by coal and 21% by gas. Most of the reserve is concentrated in the Middle-east region. World Primary Energy Sector growing at 2%
15 July 2012

India is the 5th largest energy consumer India has vast potential in the Exploration Sector. 54% Coal, 32% Oil, 9% Natural Gas Indian Primary Energy Sector growing at 5%
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© Det Norske Veritas AS. All rights reserved

EXPLORATION - History of discoveries and production

© Det Norske Veritas AS. All rights reserved

15 July 2012

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All rights reserved 15 July 2012 Slide 5 . ONGC and OIL have discovered over 260 oil and gas fields. India has 5.EXPLORATION .6 billion barrels of proven oil reserves Oil and Gas Industry Size is estimated at USD 110 bn (about 15% of Indian GDP) India’s GDP would fall by 1.5% for every USD 10 increase in the price of oil per barrel      © Det Norske Veritas AS.Overview of exploration sector in India  Oil was struck at Makum near Margherita in Assam in 1867 First commercial oil was discovered in Digboi in 1889 Giant Discovery .Bombay High field in 1974 in west coast offshore Public sectors companies.

All rights reserved 15 July 2012 Slide 6 .Natural gas demand is currently about 179 MMSCMD while the domestic supply is only 80 MMSCMD STRUCTURE .ONGC and OIL.Exploration and Production sector witnessing increased private sector participation © Det Norske Veritas AS. with about 82% share of the total domestic oil and gas production . largest upstream companies.Oil & Gas cater to 45% of India’s primary energy requirements .EXPLORATION AND PRODUCTION IN INDIA SIZE .Crude oil demand is currently about 146 MMT while the domestic production of crude is only 34 MMT .

EXPLORATION AND PRODUCTION IN INDIA POLICY .Coal Bed Methane (CBM) Policy has been formulated which provides for attractive fiscal and contract terms for the exploration of CBM blocks .Crude oil demand is likely to increase to about 235 MMT by 2012 .Regulatory Body .Gas demand is expected to reach 279 MMSCMD by 2012 © Det Norske Veritas AS.Director General of Hydrocarbons (DGH) OUTLOOK .100% FDI is allowed in the exploration of Crude Oil and Natural Gas through the automatic route .New Exploration Licensing Policy (NELP) is in place (since 1998) to facilitate private sector participation in Oil and Gas exploration . All rights reserved 15 July 2012 Slide 7 .

gas and CBM .Exploration and production of crude oil.EXPLORATION AND PRODUCTION IN INDIA POTENTIAL . ONGC.Active promoting and creation of strategic oil and gas reserves through partnerships with the private sector .Growing demand-supply mismatch provides ample opportunities for investment . etc. All rights reserved 15 July 2012 Slide 8 .22% of the Indian sedimentary area is unexplored – discovery of oil fields by investors such as Cairn Energy and “giant” gas fields by Reliance.An investment need of US$40 billion is expected in exploration and production by 2012 .Reliance alone plans to spend over US$10 billion in oil & gas exploration and production over the next 3 years. © Det Norske Veritas AS. indicate a large potential for profitable investment in exploration .

Scope for DNV © Det Norske Veritas AS.EXPLORATION . All rights reserved 15 July 2012 Slide 9 .

All rights reserved .REFINING . oil in India would last only for about 20 to 25 years. 15 July 2012 Slide 10 © Det Norske Veritas AS.World Consumption Pattern At current rate of consumption & production.

5th largest petroleum refining capacity in the world today . In 1947.close to 150 MMTPA. (3 MBPD)    Indian refineries are further expanding capacities and are expected to have a total refining capacity of 242 MMTPA by 2011-12. Environmental considerations – Future Energy Policy Hydrocarbon Vision 2025 .REFINING . Subsequently. there was only one refinery located in Digboi with a capacity of 0. Standard Vacuum Oil Company put up a refinery in Bombay in 1955: and Caltex at Visakhapatnam in 1957.Strategic plan to meet future energy requirement   © Det Norske Veritas AS. All rights reserved 15 July 2012 Slide 11 .Background   Spectacular growth in the refining sector over the years.25 MMTPA.

REFINING . All rights reserved 15 July 2012 Slide 12 .Existing Refining Capacity & Expansion Plans © Det Norske Veritas AS.

Availability and Demand  Predicted refining capacity with export potential of 100 MMTPA up to 2012  Current installed capacity of 149 MMTPA.Refined Products . stress on quality improvementby mid 2009. All rights reserved 15 July 2012 Slide 13 . all refineries to meet Euro III/ IV norms for petrol/ diesel . 5th largest refining capacity in the world  Significant investments projected in new capacity additions 250 200 150 100 50 0 2007-08 2008-09 2009-10 2010-11 2011-12 149 122 189 125 221 236 205 128 132 137 .Emphasis on use of heavy and sour crude for processing Availability demand © Det Norske Veritas AS.Govt.

REFINERY GRM trends  Strong profitability of Indian refining companies driven by strong export earnings  Substitution of light crude by heavier. sour crude oils to leverage spread  GRMs expected to stay robust with high crude prices and global demand-supply forecasts Administered Pricing © Det Norske Veritas AS. All rights reserved Market Determined Pricing 15 July 2012 Controlled Pricing Slide 14 .

Future The Future  Way Forward  West coast refineries would continue to cater to the western markets High refining margins will allow competitive exports (RIL) Most Asian/SEA countries like Taiwan. All rights reserved 15 July 2012 Slide 15 . Indonesia. Sri Lanka.REFINING . Philippines. Pakistan and Bangladesh are expected to have a deficit of petroleum products Middle East refineries would be key competitors The opportunity to emerge as a refining hub seems to be real and attractive Cost competitiveness and timely project commissioning is key Competitiveness to be driven by product slate and ability to process a wide range of crude      Integrated refining and petrochemical facilities for higher value-addition Environmental and product quality specs in export markets   © Det Norske Veritas AS. Vietnam.

of natural gas transmission network which is over 82% of the total pipeline infrastructure in the country © Det Norske Veritas AS.PIPELINES . All rights reserved 15 July 2012 Slide 16 . the share of pipeline transportation is likely to increase in India  About 50-60% of the primary transportation of petroleum products in developed countries is done through pipelines  Pipeline network of Indian Oil has grown to 9273 km with a capacity of about 62 million metric tonnes per year.  GAIL owns and operates 6700 km.Crude and LPG Pipe Lines  Increasing urbanization and greater concern for environment and safety.

50% Pipelines 25% © Det Norske Veritas AS.20%  Share of pipeline transportation in India much lower as compared to USA.50% Coastal 7.204 kms  POL pipelines under implementation – 5. inspite of its advantages  Total POL pipeline length currently under operation in India – 12.70% Pipelines 59% Rail.561 kms (Investment of USD 1.5 bn) USA Road 27.PIPELINES . All rights reserved INDIA 15 July 2012 Slide 17 .50% Rail 37.Transportation Road 5.10% Coastal 33. 3.

Scope for DNV © Det Norske Veritas AS. All rights reserved 15 July 2012 Slide 18 .REFINING AND PIPELINES .

3 India 37 1 35 Source (B P Statiscal Review 2008) © Det Norske Veritas AS.Global Comparison India’s Gas Reserves / Production Place Reserves (TCF) Production (TCF/ Yr) R/P (Years) World 6263 98 60. All rights reserved 15 July 2012 Slide 19 .

Indian Energy Sector – An Overview World Energy Consumption (MTOE) Energy Mix (%) Coal Oil Natural gas Nuclear Hydro Oil & Gas Imports (MTOE) 27% 37% 24% 6% 6% 2467 47% 34% 10% 4% 5% 836 54% 32% 8% 1% 5% 98 (US$ 30 billion) Total Primary Energy Natural Gas 2.6% 4.8% 6.2% 6.8% 10224 Asia Pacific 3199 India 376 Growth in Energy (last 10 yrs) India .1% 2.5th Largest Energy Consumer © Det Norske Veritas AS. All rights reserved 15 July 2012 Slide 20 Source : BP Statistical Review of World Energy June 2005 .0% 4.

MYANMAR to increase 3 fold by 2012.5 MMTPA) Upcoming (16.5 mmtpa PHOOLPUR JHANSI VARANASIGAYA VIJAIPUR BOKARO BHOPAL INDORE CUTTACK India plans to bring 200 of its cities under the gas pipeline network by 2020.40000 Cr – NEXT 5 YRS ) BHATINDA DELHI BAREILLY AURAIYA LUCKNOW JAGDISHPUR DAHEJ I & II 10 mmtpa* MATHANIA AGRA GWALIOR DISPUR PATNA KANPUR KOTA RAJKOT UJJAIN AHMEDABAD JAMNAGAR BHARUCH HAZIRA 2. AGARTALA India at present uses around 150 million cubic meter of gas a day.300 Kms) Planned (8. US $ 2 Billion) Gas By Sea Receipt (Likely Location) LNG Terminal TUTICORIN © Det Norske Veritas AS. LNG Existing (7.present economic growth rate.400 Kms. At A 1 BLOCK. US$ 2 Billion) KOLKATA BARODA consumption SURAT MUMBAI PUNE SOLAPUR KOLHAPUR GOA DAMRA BHUBANESHWAR KRISHNAPATNAM KAKINADA RAJAMUNDRY HYDERABAD VIJAYAWADA NELLORE DABHOL 5 mmtpa Transmission Pipelines City Gas/ CNG Existing (6. US$ 5 Billion) HASAN MANGLORE BANGLORE CHENNAI COCHIN 5 mmtpa KANJIRKKOD COIMBTORE TIRUCHCHIRAPALLI Existing (10 cities) Planned (40 cities. All rights reserved INTEGRATED GRID TO LINK ANY2012 15 July SOURCE TO ANY MARKET Slide 21 .GAS SECTOR INFRASTRUCTURE: CURRENT AND FUTURE – A COMPOSITE PICTURE TOTAL INVESTMENT – US$ 9 Billion (Rs.25 MMTPA .

Gas Sector Challenges Gas Pricing Competitiveness Technology Upstream Midstream Downstream Creating Infrastructure Creating an indigenous manufacturing base (Turbines.Legal / Regulatory framework Management of Risks (Market / Price / Political) Sector Policy Regulation / Gas Laws Technical and Safety standards Institutional Support Structure Creating Training Infrastructure Skilled manpower to support growth. All rights reserved 15 July 2012 Slide 22 . Gas based Automobiles) Creation of up front capacities Coordinated development of gas value chain Gas Sector Reforms Dependence on Imports Geo .Political issues Integration with global pricing regimes Global Competition Need for International Charter . Compressors. CNG kits. © Det Norske Veritas AS.

Increased growth of East coast E & P .likely that Rajamundry will develop as support centre.What does this mean for DNV? The Gas sector will be very active with lots of uncertainties to be managed. Regulated industry but government requires significant education. Significant LNG degasification developments LNG supply chain issues critical to India energy sector Major onshore/offshore pipeline development projects expected. All rights reserved 15 July 2012 Slide 23 . Fertilizer sector is strongly inter-related to the Indian gas sector. © Det Norske Veritas AS.

RENEWABLE ENERGY .000 MW of grid connected renewable energy (Sept. All rights reserved 15 July 2012 Slide 24 .Introduction   India has installed close to 10. © Det Norske Veritas AS.500-1. 2007) Wind energy market size has increased in the 1. agricultural waste & animal dung constitute ½ of the total energy consumption in India    Strengthen India’s energy security Concern for environment Large untapped potential Regulator :The Ministry of New and Renewable Energy (MNRE) is the nodal Ministry of the Government of India for all matters relating to new and renewable energy.700 MW per year $2250miillion – 2500million per annum Key drivers for renewable energy  Renewable Energy sources in India     Demand supply gap Solar Energy Hydropower Biomass Wind Energy Non-commercial sources like fuelwood.

Soft loans to users. BHEL Reliefs offered by Government on SPV manufacturers and users of SPV based products .. All rights reserved 15 July 2012 Slide 25 .Solar Power    Location advantage Average annual temperature – 25-27 degree centigrade South-East coast has the highest temperature   Major players PV cell .No excise duty for manufacturers .Low import tariff for several raw materials and components .Central Electronics Ltd. intermediaries and manufacturers © Det Norske Veritas AS.RENEWABLE ENERGY .

Bhakra Nangal dam Proposed Hydro Power projects in India   Rampur Hydropower Project Vishnugadh Pipalkoti Hydropower Project Only 20% of the potential is currently being utilized (18000 MW out of 90000 MW) © Det Norske Veritas AS. Assam.RENEWABLE ENERGY .Hydro power   High annual rainfall is a good indicator The dominant annual rainfall is located on the north-eastern part of India: Arunachal Pradesh. Advantages    Start up and shut down quick and economical Long and productive lives Eg. Nagaland. Manipur and Mizoram Good water management and storage needed. All rights reserved 15 July 2012 Slide 26 .

All rights reserved Gross Potential (MW) (a) 8275 9675 6620 875 5500 3650 1700 5400 3050 450 45195 MW 15 July 2012 Technical Potential (MW) (b) 1920 1780 1180 605 845 3040 780 910 1880 450 13390 MW Installed Capacity (MW) (c) 121.  Wind Energy Potential In India Sl. 6.6 0. renewable and clean. 4. 5. 10. 3. 2. it is considered by experts to be more environmentally friendly than many other energy sources.1 667 847 2. 9.Wind Energy  Wind energy is plentiful. 8.5 7114 MW Slide 27 Source : M N E S .RENEWABLE ENERGY . 7. Therefore. No. 1. 11.0 58 1485 2 470 3460 1. State Andhra Pradesh Gujarat Karnataka Kerala Madhya Pradesh Maharashtra Orissa Rajasthan Tamilnadu West Bengal Other States Total © Det Norske Veritas AS.

major players – Vestas.000 MW ).Suzlon is in the process  Other of developing Asia’s largest wind park in Maharashtra (1.Started in 1995 .RENEWABLE ENERGY .50% market share in India .Ranked 5th in terms global market share of . Enercon and GE wind energy India is second largest exploiter of Wind Energy – 1000 MW © Det Norske Veritas AS.Wind resource in India Major Player  Suzlon . All rights reserved 15 July 2012 Slide 28 .

Sugarcane Molasses  Supreme Court of India ruling compulsory blending of 10% ethanol Technology Initiatives . Indian Railways.SBI.Cooking Top 3 States in biomass potential .Biomass and Bio-fuel BIOMASS BIOFUEL    4th world ranking in power generation Various Applications: . Gujarat Bio-fuel initiative using . All rights reserved 15 July 2012 Slide 29 . AP Government Agreement with Reliance Industries    © Det Norske Veritas AS.Jatropha .Power Generation . Bihar.Andhra Pradesh.Biomass gasification for heating .RENEWABLE ENERGY .

All rights reserved 15 July 2012 Slide 30 .Scope for DNV © Det Norske Veritas AS.RENEWABLE ENERGY .

The gross electricity production capability of Indian Power Sector is placed at around 111 GW.80% Coal. comprising about 3. 22.3% of the overall global energy expenditure per year. 11% Hydro. 54% © Det Norske Veritas AS. 8. 35. 1% Gas.POWER SECTOR .60% Commercial. 24. All rights reserved 15 July 2012 Slide 31 .60% Agriculture.Electricity Power Generation – Sector wise Breakup Wind Renewable.10% Domestic. 26% Others.Current Scenario   2.  Consumption Pattern . Nuclear.4% of the overall world energy output 6th largest energy user. 3% 5% Diesel. 8.90% Insustrial.

Weakness MAJOR REASONS  Inadequate power generation capacity  Lack of optimum utilization of the existing generation capacity  Inefficient use of electricity by the end users  Inadequate inter-regional transmission links  Huge T&D losses (theft) and skewed tariff structure.POWER SECTOR . All rights reserved 15 July 2012 Still 19% villages haven’t seen what is electricity Slide 32 . making SEBs unviable  Inadequate and ageing sub-transmission & distribution network leading to power cuts and local failures/faults  Slow pace of rural electrification  Lack of grid discipline © Det Norske Veritas AS.

All rights reserved 15 July 2012 . Vast hydroelectric potential (150. Impressive power development in absolute terms (comparable in size to those of Germany and UK). framework for private  New strategies and reforms Increased significance of renewable sources of energy     Potentially. one of the largest power markets in the world Slide 33 © Det Norske Veritas AS.000 MW).Future FUTURE SCOPE       Exponential demand growth Capacity Enhancement Increased significance of the role of the private players and foreign investments Abundant coal reserves (enough to last at least 200 years).POWER SECTOR . Enabling investors. Large pool of highly skilled technical personnel.

All rights reserved 15 July 2012 Slide 34 .POWER SECTOR .Scope for DNV © Det Norske Veritas AS.

1986 © Det Norske Veritas AS. 1998    Electricity Act 2003 Atomic Energy Act Environment (Protection) Act. 1948 Electricity Laws (Amendment) Act. 1998 Electricity Regulatory Commission Act.REGULATORY FRAMEWORK .Laws    Oilfields (Regulations and development) Act 1948 Petroleum and Natural Gas Rules 1959 Petroleum and Natural Gas Regulatory Board Act 2006    Electricity (Supply) Act. All rights reserved 15 July 2012 Slide 35 .

Director General of Hydrocarbons   Upstream Regulator Members Director General Deputy Director General  Deputy Director General Key Functions and Responsibilities Review exploration Programs of companies for adequacy Cost monitoring. statutory payments to government. All rights reserved 15 July 2012 Slide 37 . Security and Environment aspect To reassess the hydrocarbon reserves estimated by the operating companies Monitoring of CBM blocks Technical advice to MOP&NG on issues relevant to exploration and optimal exploitation of oil & gas .Advise Government on policy formulations © Det Norske Veritas AS.REGULATORY FRAMEWORK . Profit sharing to government Monitoring of safety.

REGULATORY FRAMEWORK .9 shallow water blocks . All rights reserved .29 onshore blocks .New Exploration and Licensing Policy (NELP)  NELP was launched to accelerate the pace of Hydrocarbon exploration in India in 1997-98  212 blocks have been offered under 7 rounds .7th round launched in 2008  57 exploration blocks on offer under NELP 7 .19 deepwater blocks     Model Production Sharing Contract Income Tax holiday for 7 Years from the start of commercial production 100% FDI allowed Assured marketing rights in domestic markets 15 July 2012 Slide 38 © Det Norske Veritas AS.

of common carrier or contract carrier and city or local natural gas distribution network . processing.Registration of entities . transportation. laying.Transportation Tariff   © Det Norske Veritas AS. storage. All rights reserved 15 July 2012 Slide 39 . petroleum products and natural gas Promote competitive markets Functions of the Board . building.REGULATORY FRAMEWORK .2007 Regulate refining.Petroleum and Natural Gas Regulatory Board    Downstream Regulator PNGRB formally established with effect from 1..Authorization .Declaring. marketing and sale of petroleum. etc.10.Rights of first use . distribution.

Fix the trading margin in the inter-State trading of electricity  Advisory Functions .REGULATORY FRAMEWORK .Promotion of investment in electricity industry © Det Norske Veritas AS.Central Electricity Regulatory Commission  Mandatory Functions Regulate the tariff of generating companies Regulate the inter-State transmission of electricity Determine tariff for inter-state transmission Issue licenses to persons to function as transmission licensee and electricity trader Specify Grid Code having regard to Grid Standards Specify and enforce the standards with respect to quality. All rights reserved 15 July 2012 Slide 40 .Promotion of competition.Formulation of National electricity Policy and tariff policy . efficiency and economy . continuity and reliability of service by licensees .

wordpress. All rights reserved 15 July 2012 Slide 41 .References    http://petroleum.net http://www.nic.hinduonnet.nic.org/ http://indiastatistical.in/ http://mnes.energywatchgroup.org © Det Norske Veritas AS.indiaenergyportal.com    http://southasianmedia.org/ http://www.energymanagertraining.com  www.in/    http://www.in/ http://uttara.acus.com/ http://www.

teriin.References    www.ril.gov.org www.com www.bharatpetroleum.oil-india.com    www.ongcindia.com © Det Norske Veritas AS.cairnindia.com  www.cercind.hindustanpetroleum.suzlon.in/ www.com www.com    www. All rights reserved 15 July 2012 Slide 42 .com www.iocl.com www.

© Det Norske Veritas AS. All rights reserved 15 July 2012 Slide 43 .

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