By Our Correspondent
NEW DELHI/BHUBANESWAR: With Dharmendra Pradhan at the helm of affairs ,the Ministry of Petroleum & Natural Gas is concerned with exploration and production of Oil & Natural Gas, refining, distribution and marketing, import, export and conservation of petroleum products. Oil and Gas being the important import for our economy, many initiatives have been taken by the Ministry for increasing production and exploitation of all domestic petroleum resources to address the priorities like Energy Access, Energy Efficiency, Energy Sustainability and Energy Security.
PMUY
With the objective to provide clean cooking fuel to poor households, especially in rural areas ensuring universal coverage of LPG as cooking gas in the country, the Government launched Pradhan Mantri Ujjwala Yojana (PMUY) in May 2016, with an initial target of 5 crore. It was further revised to providing 8 crore connections to an adult woman of poor households by March, 2020, which has already been achieved on 7th September, 2019 i.e. 7 months ahead of the target.
Implementation of this scheme enhanced economic productivity and quality of life of women, by removing drudgery associated with collection of wood. The free time, thus, available with them, can be utilized in multi spheres for improving their life standards.
PAHAL
The Government, as a measure of Good Governance, has introduced well targeted system of subsidy delivery to LPG consumers through PAHAL. The initiative of the Government was aimed at rationalizing subsidies, based on approach to cut subsidy leakages, but not subsidies themselves.
PAHAL Scheme was launched on 15th November 2014, initially in 54 districts. It was subsequently extended to rest of the country from 01.01.2015 for providing the direct benefits transfer of LPG subsidy to the bank account of the LPG consumers. As on 13th December 2019, 25.84 crore LPG consumers have joined the PAHAL Scheme and Rs. 1,22,666.82 crore have directly been transferred to the bank accounts of LPG consumers.
PAHAL Scheme has been designed to ensure that the benefit meant for the genuine domestic customer reaches them directly and is not diverted. The scheme has helped in identifying ‘ghost’ connections, multiple connections and inactive connections which in turn has resulted in curbing diversion of subsidized LPG to commercial purposes.
REFORMS IN EXPLORATION AND LICENSING POLICY
The Government notified ‘Reforms in Exploration and Licensing Policy, for enhancing domestic exploration and production of oil and gas’ on 28th February 2019, with the objective to intensify exploration activities, attract foreign and domestic investment and enhance domestic production. The salient features of Policy Reforms are as under:
Shifting of focus from ‘revenue’ to ‘production maximisation’.
No Revenue Sharing with Government in Category- II & III sedimentary basins.
Boost to exploration activities by assigning greater weightage to exploration work programme.
For unexplored areas in Category I basins, 70% weightage to Minimum Work Programme and 30% weightage to Revenue Sharing with a cap of 50% at Highest Revenue Sharing point (HRP); and
For Category II and III sedimentary basins, 100% weightage for Minimum Work Programme.
Shorter exploration period for early development.
Fiscal concessions for early monetization and commercial production.
Marketing and Pricing freedom for natural gas.
The policy envisages bidding out of 66 small and marginal producing nomination fields operated by National Oil Companies (NOCs) to have collaboration with private E&P players for inducting new and innovative technology, infusing fresh investment and best management practices to enhance production of oil and gas by adopting Enhanced Oil Recovery/Improved Oil Recovery (EOR/IOR) methods. NIO for bidding out 66 fields has been issued by ONGC and OIL in the last week of June 2019.
The MoU of ONGC and OIL were restructured with 50% weightage for physical production, Other physical parameters 30%, Financial performance parameters 20%.
Redefining the Role of DGH by delegation of additional powers and functions to DGH to strengthen the compliance/regulatory, developmental and coordination role of DGH.
Simplified and investor friendly Model Bid documents, including increasing of bidding cycle frequency from twice to thrice in a year.
Promoting Ease of Doing Business:
Simplified contractual terms with emphasis on cutting down
approvals of Government/DGH/Management Committee and expeditious grant of approvals
Setting up of Empowered Coordination Committee (ECC) under the chairmanship of Cabinet Secretary for expediting process of approvals.
New Dispute Resolution Mechanism for amicable and speedy redressal of contractual dispute.
Electronic Single Window mechanism based on IT workflow and processes for processing of approvals. Standard Operating procedures (SoPs) for grant of approvals under PSC have also been finalized.
OPEN ACREAGE LICENSING POLICY (OALP) BIDDING ROUNDS
During the year 2019, 32 blocks covering approximately 59,000 sq.km area have been awarded under OALP bid Rounds II and III and 7 Blocks with an area of approximately 18500 sq.km have been awarded under OALP Bid Round-IV.
PETROLEUM EXPLORATION LICENSES
Central Government has already granted Petroleum Exploration Licenses (PELs) for all the offshore blocks and also recommended to all the concerned State Governments to grant PELs for all on-land blocks allocated under Hydrocarbon Exploration and Licensing Policy (HELP) regime.
NATIONAL SEISMIC PROGRAMME
As on 30.11.2019, surface coverage of 41,902 Line Kilo Meter (LKM), out of 48,143 LKM has been achieved under NSP.
NATIONAL DATA REPOSITORY (NDR)
The NDR was established by the Government to assimilate, preserve and upkeep the vast amount of data which could be organized and regulated for use in future exploration and development, besides use by R&D and other educational institutions. The operation of NDR was formally launched on 28th June, 2017 in DGH Office, Noida. Total data uploaded in NDR till 30 November, 2019 is 2.30 million line kilometres of 2D Seismic Data, 0.78 million square kilometres of 3D Seismic data and 17588 exploratory wells. The data availability in NDR will help investors to carve out blocks for submission of expression of interest under OALP.
MONETIZATION OF NEW EXPLORATION LICENSING POLICY (NELP) DISCOVERIES
42 (cumulative) NELP discoveries were monetized as on 31st October, 2019.
REFINERY
Out of the 23 refineries operating in the country, 18 are in public sector, 3 are in private sector and 2 as a joint venture, with a total refining capacity of 249.366 MMTPA. Out of the refining capacity of 249.366MMT, 142.066 MMT is in the public sector, 19.10 MMT in joint venture and the balance 88.20 MMT is in the private sector. The country is not only self-sufficient in the refining capacity for its domestic consumption, but also exports a sufficient quantity of petroleum products.
AUTO FUEL VISION AND POLICY
Ministry of Petroleum & Natural Gas vide order dated 19.01.2015 has notified for implementation of BS-IV Auto Fuels in the entire country. Accordingly, BS-IV Auto Fuels has been implemented in the entire country w.e.f. 01.04.2017.
It has also been decided that the country will leapfrog directly from BS-IV to BS-VI fuel standards and BS-VI standards will be implemented in the entire country w.e.f. 01.04.2020.
Considering the serious pollution levels in Delhi, the Government has already commenced supply of BS-VI in National Capital Territory (NCT) of Delhi w.e.f. 01.04.2018.
The Government has also started supply of BS-VI auto fuels in 20 Districts of Rajasthan, Uttar Pradesh & Haryana adjoining NCT of Delhi.
LIBERALIZATION OF NORMS OF PRIVATE SECTOR PARTICIPATION IN THE RETAIL SECTOR
The Government has approved the guidelines for granting authorization to market transportation fuels i.e. Motor Sprit (MS) / High Speed Diesel (HSD). Necessary notification in this regard has been published in the Gazette of India on 08.11.2019.
DPIIT’S PUBLIC PROCUREMENT (PREFERENCE TO MAKE IN INDIA) ORDER
Ministry of Petroleum and Natural Gas has prescribed minimum local content for Petroleum and Natural Gas products under Department of Promotion of Industry and Internal Trade Public Procurement (Preference to Make in India) Order, 2017 on 25th June, 2019. During the current Financial Year, Policy to Provide Purchase Preference (linked with Local Content (PP-LC)) was reviewed by the Steering Committee constituted under the Policy by MoP&NG. As per the recommendation of Steering Committee, Policy has been extended for a further period of one year w.e.f. 1st October, 2019.
NATIONAL GAS GRID
overnment of India has identified the requirement of development of additional 15000 Km of Gas Pipeline and various pipeline sections to complete the Gas Grid. The status of new pipeline projects being implemented by Govt. PSUs which are part of National Gas Grid are as under:
Jagdishpur – Haldia&Bokaro – Dhamra Pipeline Project (JHBDPL): The 2655 km. pipeline project is being executed by GAIL at an investment of Rs.12,940 Cr., which includes 40% capital grant (i.e. Rs.5,176 Cr) from the Government of India and the project is scheduled to be completed progressively by December, 2020. JHBDPL will cater to the energy requirements of five states, namely Uttar Pradesh, Bihar, Jharkhand, Odisha and West Bengal.
Barauni to Guwahati Pipeline: Pipeline from Barauni to Guwahati is being implemented as an integral part of JHBDPL project to connect North East Region (NER) with the National Gas Grid. The approx. length of the pipeline is 729 km, having capacity of 2 to 2.5 MMSCMD with an estimated project cost of Rs. 3308 crores. Completion of the project is scheduled by December 2021.
North East Gas Grid: “Hydrocarbon Vision 2030 for North-East India” (Vision Document) released by MoP&NG on 09.2.2016 comprehensively examines the gaps in Natural Gas infrastructure and proposes Natural Gas pipeline grid in North-east region. Thus, a joint venture of five oil and gas CPSEs i.e. GAIL, IOCL, OIL, ONGC and NRL named as “Indradhanush Gas Grid Ltd” (IGGL) has been entrusted for the development of Natural Gas Pipeline Grid in North-East, i.e. North East Gas Grid (NEGG), in all North Eastern States i.e. Assam, Sikkim, Mizoram, Manipur, Arunachal Pradesh, Tripura, Nagaland and Meghalaya, in a phased manner at an estimated project cost of Rs. 9265 crore. Further, a CCEA Note seeking Capital Grant required as Viability Gap Funding (VGF) to Indradhanush Gas Grid Limited (IGGL) for setting up the North East Natural Gas Pipeline Grid (NEGG) is under consideration.
Kochi-Koottanad- Bangalore-Mangalore (Ph-II) Pipeline Project (KKBMPL): The construction work to develop Kochi-Kottanad-Managlore-Bangalore pipeline (KKBMPL) and Ennore-Thiruvallur-Bengluru-Puducherry-Nagapatinam-Madurai-Tuticorin Pipeline (ETBPNMT) in the southern part of the country is in progress. Efforts are underway for development of these pipeline project and provide accessibility of natural gas sources (domestic and imported both) to southern cities by connecting KKMBPL and ETBPNMT projects with the existing gas grid.
PROMOTION OF LNG / CNG IN VEHICLES
As on October, 2019, about 55.17 lakh households are availing the benefit of domestic gas in the form of PNG for cooking purpose. Oil & Gas companies along with its Joint Venture/ subsidiary CGD companies have firmed up plans to expand the coverage of PNG network to achieve additional 1 Crore PNG households by 2024. The Government has given priority in allocation of domestic gas (the cheapest gas available in country) for supply to households in the form of Piped Natural Gas (PNG)(Domestic) and Transport segment in the form of Compressed Natural Gas (CNG)(Transport) across the country. City Gas Distribution (CGD) networks have been declared as a “Public utility” under Industrial Dispute Act (IDA) 1947. At present (October, 2019), 1838 CNG stations are making available CNG to meet the requirement of 34.54 Lakh CNG vehicles in the country.
Government is meeting 100% gas requirement of PNG (Domestic) and CNG (Transport) segment of the City Gas Distribution (CGD) networks across the country.
CITY GAS DISTRIBUTION (CGD) BIDDING
Petroleum and Natural Gas Regulatory Board (PNGRB) formed under the Petroleum and Natural Gas Regulatory Board Act, 2006, grants authorization for
setting up of City Gas Distribution (CGD) network in the cities / geographical areas of the country through open bidding process. Supply of domestic PNG to households, setting up of CNG stations for vehicles, providing PNG to small industries and commercial establishments can be carried out only by the
authorised entity.
In 9th and 10th CGD Bidding Rounds, 86 and 50 Geographical Areas (GAs) have been authorized respectively. As per the commitment made by the various entities for the 50 GAs during 10thCGD Bidding Round, 2,02,92,760 domestic PNG (piped natural gas) connections and 3,578 CNG (compressed natural gas) stations for transport sector would be installed during a period of 8 years up to 31st March 2029, in addition to 58,177 inch-km of steel pipeline. After completion of 10th Round of CGD bidding, CGD would be available in 229 GAs comprising 407 districts spread over 27 States and Union Territories, covering approximately 70 percent of India’s population and 53 percent of its geographical area.
Ø LIQUEFIED NATURAL GAS (LNG) REGASIFICATION
At present, the country is having 6 LNG terminals meeting regasification capacity of 39.2 Million Metric Tonne per Annum (MMTPA). These 6 terminals are located at Dahej (17.5 MMTPA), Hazira (5 MMTPA), Dabhol (1.7 MMTPA), Kochi (5 MMTPA), Mundra (5 MMTPA) and Ennore (5 MMTPA). Dabhol terminal capacity utilization will also be enhanced to 5 MMTPA with breakwater in coming years.
SWACHH BHARAT ABHIYAN
Ministry of Petroleum & Natural Gas received Swachh Bharat Award under Swachhata Action Plan Category in Swachh Mahotsav 2019, held on 06th September 2019. MoPNG has allocated a budget of Rs 342.50 crore for 2018 -19, but with the help of continuous monitoring through various meetings including apex level review meetings, MoPNG including Oil & Gas CPSEs, has achieved an expenditure figure of around Rs 473 crore, showing an achievement of around 138%.
Ministry of Petroleum & Natural Gas (MoPNG), its attached offices, and Oil & Gas CPSEs, under the administrative control of MoPNG, celebrated Swachhta Pakhwada fortnight from 01st July 2019 to 15th July, 2019, with full zeal and enthusiasm. On 16th September 2019, Minister of Petroleum & Natural Gas and Steel, Shri Dharmendra Pradhan distributed the Awards to all the winners of the Swachhta Pakhwada 2019, and also to the winners of Inter-refinery Swachhta Ranking 2018-19. As a result of this initiative led by MoPNG, there were more than 60,000 activities undertaken across India and more than 200,000 trees were planted. Various activities were organized as a part of Pakhwada 2019 such as Cleanliness Drives (8450), Awareness Campaigns (5844), Competitions for School Students / Communities (1750) and many more activities. This year, the Swachhta Pakhwada saw an unprecedented public participation of more than 25,00,000 people.
A “Jan-Andolan” for Swachhata was launched on the theme of “Say No To Single Use Plastic” by the Ministry of Petroleum & Natural Gas from 11th September to 27th October, 2019 to pay homage to Mahatma Gandhi on his 150th birth anniversary. With a collaborative effort, all the CPSEs and other organizations under MoPNG joined hands to make a cleaner and greener India. The valuable contributions made by the Ministry, its attached offices and Oil and Gas CPSEs have gone towards making “Swachhata Hi Seva-2019” Campaign a huge success, and a stepping stone to eradicate Single Use Plastic from every nook and corner of our great nation, thereby making Swachh Bharat a reality.
INTERNATIONAL COOPERATION/ IMPORTANT AGREEMENTS/ CONTRACTS
The 13th Edition of India’s flagship hydrocarbon Conference, PETROTECH-2019 was organised in February 2019 in New Delhi. This biennial International Conference presents the Indian hydrocarbon sector prevailing global oil and gas dynamics.
On 22nd September 2019, Hon’ble PM hosted a roundtable for CEOs of US Energy sector in Houston. During the event, Tellurian and PLL signed an MOU wherein PLL and its affiliates intend to negotiate the purchase of up to 5 MMTPA of LNG from the proposed Driftwood LNG project.
India co hosted AMER8 (Asian Ministerial Energy Roundtable 8) in Abu Dhabi in September 2019. India will host AMER9 in Indian in 2021.
On 10th September 2019, Hon’ble PM and H.E. PM of Nepal, jointly inaugurated South Asia’s first cross-border petroleum products pipeline from Motihari in India to Amlekhgunj in Nepal through video conference.
On 5th October 2019, Hon’ble PM and H.E. Sheikh Hasina, PM of Bangladesh jointly inaugurated the project to Import of Bulk LPG from Bangladesh through video-link.
On 8-9 Oct 2019, Minister PNG jointly inauguration the completed infrastructure works funded by Mongolia for the Oil Refinery in Shainshand, Mongolia. The refinery project is funded by India under LOC.
The 3rd meeting of ITT (International Think Tank) was held in New Delhi on 13th October 2019 to discuss the challenges and the way forward for the Indian oil and Gas sector for the future.
The 3rd Edition of CERAWeek India Energy Forum event held in New Delhi from 14th – 15th October, 2019. During the event, Minister for Petroleum & Natural Gas met with CEOs of global oil and gas majors.
An MoU signed between Indian Strategic Petroleum Reserves Limited (ISPRL) and Saudi Aramco for exploring opportunity to fill two caverns in Padur SPRs.
An MoU was signed between MoPNG and Ministry of Energy of Russia on use of Natural Gas in transportation sector on 05th September 2019.
A Joint Statement on Cooperation between India and Russia in Hydrocarbon Sector for 2019-2024 was issued in Vladivostok, Russia on 4th September 2019 after Hon’ble PM’s annual bilateral summit with H.E. Russian President. The Joint Statement provides a Roadmap to for India’s private and public companies to explore the possibility of collaborating in LNG projects, including in the Arctic.
ETHANOL BLENDED PETROL (EBP) PROGRAMME
Ethanol Supply Year (ESY) 2018-19, 188.57 crore litre of Ethanol has been procured by OMCs for blending purpose. For ESY 2019-20, the Government has fixed an enhanced remunerative price for ethanol procurement, based on raw material utilized viz. for C heavy Molasses at Rs. 43.75/- per litre, for B heavy Molasses at Rs. 54.27 per litre, for sugarcane juice/ sugar/ sugar syrup at Rs. 59.48/- per litre and for Damaged Food grains at Rs. 47.63/- per litre. Sugar and sugar syrup have been allowed for the first time for ethanol production to support the industry in liquidating their excess stocks. Government has published a long-term ethanol procurement policy so that the industry can take a long-term view on fresh investments in this sector. The amended provisions of Industries (Development & Regulation) Act, giving control on production, movement and storage of ethanol to the Central Government, have now been implemented in 13 States.
BIO-DIESEL PROGRAMME
In order to encourage production of biodiesel from Used Cooking Oil (UCO), Oil Marketing Companies have floated Expression of Interest on 10.08.2019, for supply of biodiesel produced from UCO at 100 locations across the country. This has been extended to 200 locations on 10.10.2019. The ex-factory UCO based biodiesel price has been fixed for three years. The price for the first year has been fixed at Rs 51/litre, for the second year at Rs 52.7/litre and for the third year at Rs 54.5/litre. GST and transportation shall be payable in addition to this price. MoP&NG has issued Gazette Notification dated 30.4.2019 on the subject ‘Guidelines for sale of Bio-diesel for blending with High Speed Diesel for transportation purposes – 2019’.
2ND GENERATION ETHANOL
Subsequent to opening up of alternate route i.e. Second Generation (2G) route for ethanol production, Oil Marketing Companies are in the process of setting up 12 2G bio-refineries with an investment of Rs.14,000 crores. Five 2G bio-refinery projects in Bhatinda, Bargarh, Numaligarh, Panipat and Gorakhpur are in advanced stage of construction.In order to encourage setting up of second generation bio-fuels plants, Government has launched a scheme namely i.e. “Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool fasal awashesh Nivaran) Yojana” for providing financial support to integrated bio-ethanol projects, using lignocellulosic biomass and other renewable feedstock. Under this scheme, proposals for assistance have come from IOCL (Panipat plant), BPCL (Bargarh), HPCL (Bhatinda), MRPL (Davangere), and NRL (Numaligarh) apart from IOC R&D for a Demonstration plant at Panipat.
