Sizable finds begin to emerge from India's licensing efforts

June 9, 2003
A chain of significant discoveries, including in 2002 the world's largest hydrocarbon discovery for the year, has occurred in the past 2 years in India.

A chain of significant discoveries, including in 2002 the world's largest hydrocarbon discovery for the year, has occurred in the past 2 years in India.

This good fortune is partly the result of successive measures taken by the government and due to pioneering work carried out by the Directorate General of Hydrocarbons (DGH) under Ministry of Petroleum and Natural Gas (MOP&NG).

The latest development in this trend was the discovery in November 2002 by Reliance Industries Ltd. (RIL) that established 12-14 tcf of gas on a corner of RIL's first deepwater block to be explored in the Krishna-Godavari basin off India's east coast.

East coast deepwater

The deepwater areas along the east coast were mapped and opened up through seismic and gravity and magnetic (GM) surveys by DGH in 1997 and again in 1999.

Based on interpretation of the new geophysical data acquired, DGH prepared a detailed prospect map of the entire east coast (Fig. 1) and calculated its resources to be 7 billion tonnes of oil and gas equivalent at P50 probability.

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In various technical forums as early as 1999, DGH announced that blocks 4, 5, 6, and 7 in the deepwater KG basin would turn out to be major hydrocarbon producing areas.

So far, drilling has taken place on small portions of just 2 deepwater blocks, and proved reserves of 0.35 billion tonnes have been established. This leaves 18 more deepwater blocks yet to be explored in the area.

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The moment Cairn Energy India Ltd. drilled the first block (KG-DWN-98/2), it resulted in discovery of over 1 tcf of gas in place on the block (Figs. 1 and 2). Immediately thereafter, when RIL drilled KG-DWN-98/3, the second deepwater block, the result was 12-14 tcf of recoverable gas on merely 20% of the block and the world's largest hydrocarbon discovery for the year 2002.

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These discoveries were made in the newly identified geological play types related to slope depositional and stacked channel system in Plio-Pleistocene sandstone reservoirs with several darcies of permeability. The Dhirubhai-1 discovery well encountered 140 m of net pay within 340 m of gross pay. Initial gas in place is on the order of 4-5 tcf, with an expected gas production rate of 40 MMscfd in the discovery well (Fig. 3).

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This is followed by four more discoveries on the same block in the slope depositional environment related play types, i.e., stacked channels, natural levees, basin floor fans, etc. In addition, a variety of stratigraphic-structural plays have been mapped which are yet to be drilled, and more discoveries are awaited in the near future (Fig. 4).

Licensing progress

These new finds and geophysical data collected by DGH have firmly established India as the world's latest deepwater and ultradeepwater destination.

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The New Exploration Licensing Policy (NELP) announced by the government in 1999 has been a great success the last 3 years as can be seen from the distribution of licenses and acreage awarded (Fig. 5).

DGH awarded 68% of the exploration licensed areas in 3 years, compared with 10% in 7 years and only 22% in the last 40 years. All licenses awarded to date cover 1.03 million sq km, or one third of the country's 3.14 million sq km sedimentary area.

Favorable fiscal terms in deep water, shallow water, and on land have resulted in the licensing of nearly all of the 70 blocks announced under NELP in the last 3 years compared with 27 blocks awarded in the previous 10 years.

Due to exploration spurts on the awarded blocks, eight times more 3D seismic data and four times as much exploratory drilling have been completed compared with earlier years.

The number of discoveries made in the last 2 years is already twice that of the previous 10 years. RIL's Krishna-Godavari discovery is India's largest in the last 25 years after the giant Mumbai High (Bombay High) oil field and Vasai (Bassein) gas field discoveries in 1976 and 1977, respectively.

Other deep-water areas

The unique success of India's east coast is likely to be repeated in several other areas opened up recently by carrying out seismic and GM surveys by DGH along the deepwater areas of the southern tip, west coast, and Andaman Sea regions.

The geological play types mapped in these areas have striking similarities to major producing fields in the deepwater areas along the west coast of Africa and Campos basin off Brazil.

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Under the fourth round of NELP, which the government announced on May 8, 2003, 24 more blocks are being offered (Fig. 6). Road shows to provide details of the blocks are being held in London, Calgary, Houston, and Perth during June 2003.

Details of salient geological features, prospectivity of the blocks on offer, various fiscal terms, all promotional documents including the model production sharing contract, along with dates and venue of road shows can be seen on specially created NELP-IV websites (www.petroleum.nic.in, www.dghindia.org, and www.indigopool.com).

The author
Dr. Avinash Chandra has 40 years of experience of working with the oil and gas industry in India and abroad. He is the first director general of the Directorate General of Hydrocarbons, part of the government of India. He was responsible for mapping new oil and gas prospects in several basins in India that subsequently resulted in commercial discoveries. He was first to map prospects and carve out deepwater blocks under NELP.

He holds several bachelors and masters degrees from universities in India and the UK.