Location identification for new oil pipelines

Abstract

The origin of the Indian oil & gas industry dates back to the late 19th century. The first oil reserve was struck at Digboi in Assam in 1889. All the upstream activities pertaining to petroleum comprising of oil exploration and production activities were largely confined to the North-Eastern region. Even till our Independence the main petroleum exploration site remained as Assam with the daily crude oil production averaging around 5,000 barrels per day. The downstream activities also started at Digboi in 1901 after 12 years of exploration of petroleum reserves at the same location. The Government of India on realising the importance of oil & gas sector for overall economic growth, announced petroleum as the core sector industry under the Industrial Policy Resolution of 1954. Under this resolution petroleum exploration & production activity was hence controlled by the government-owned National Oil Companies, namely Oil & Natural Gas Corporation (ONGC) and Oil India Private Ltd (OIL). A major milestone was achieved with the discovery of the Cambay onshore basin (in 1958) and the Bombay offshore basin (in 1974). This led to the increase in the domestic oil production substantially. This resulted in the country meeting almost 70% of its oil requirement domestically in the early of 1970. However, the scenario never remained the same as in early 1970’s. By the end of the 1980s, few of the existing oil & gas fields experienced decline in their production since they were in production for several years. On top of that it was countered with a steady increase in consumption of oil & gas, leading the two NOCs to meet only about 35% of domestic requirement from a substantial 70% a decade ago. Then came the oil shock of 1970s, which led to a recession in the country. The government on October 14 thus nationalised both the upstream & downstream sectors which concluded by the end of 1981. This resulted in the international oil companies exiting from the Indian oil & gas industry. To add on to the woes, the resource crunch in the beginning of the 1990s held the NOCs from developing some of the then newly discovered oil & gas fields (such as Gandhar, Heera Phase-II & III, Neelam, Ravva, Panna, Mukta, Tapti, Lakwa Phase-II, Geleki and Bombay High Final Development scheme). This severely impacted the domestic oil production and exploration. Factors like the administered oil prices and non-availability of appropriate technology logistics didn’t help in reducing the impact of the problem. This scenario completely changed in the last decade of the 20th century. For the first time, Indian companies with or without any prior experience in exploration & production activities were allowed to participate in the bidding process during these bidding rounds. While in 1995, the Government’s announcement of a Joint Venture Exploration Programme was viewed as a deterrent by major private sector oil companies. This led the government to come up with a New Exploration Licensing Policy (NELP) in 1997 (operationalised in 1999). Under NELP, licenses for exploration were awarded only through a competitive bidding system and NOCs are required to compete on an equal footing with Indian and foreign companies to secure Petroleum Exploration Licenses. In addition to NELP, other efforts were made to address the need for achieving energy security.