#ONGC holds Abu Dhabi roadshow to attract global oil and gas firms.
Company's Director Sushma Rawat outlines the growth strategies and Net-Zero aspiration. #BQLive
Company's Director Sushma Rawat outlines the growth strategies and Net-Zero aspiration. #BQLive
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00:00 Hi, everyone. Welcome to BQ Prime. You're watching this special. My guest today is Sushma
00:04 Rawat, who is the Director of Exploration at ONGC. Ma'am, thank you very much for joining
00:09 us on BQ Prime. To begin with, ma'am, give us a sense of what is the kind of plans that
00:17 ONGC have with respect to increasing the exploration and production of oil and gas.
00:24 Anushka, thank you for having me on Bloomberg. Regarding ONGC's plan had been chartered in
00:33 trying to expand the acreages for exploration all across the sedimentary basins. We had
00:39 carried out an assessment of the potential of these sedimentary basins. So right now
00:44 we have 167,000 square kilometers of acreage, which is with ONGC through the different regimes.
00:53 In which even then OLP, which is the latest, you know, open acreage licensing policy, we
01:03 have acquired more than 43,000 square kilometers. And we plan in turn to increase it in the
01:11 next three years to around five lakhs. So we have already submitted the bids for OLP
01:17 eighth round. And in the forthcoming offshore OLP ninth round, we have identified areas
01:25 where ONGC would like to go. So that is likely to almost double the acreages that ONGC is
01:31 having as on date. In another year we'll be having almost double the acreage for exploration.
01:37 Along with it, we have planned a non-seismic acquisition, data acquisition for areas which
01:44 are logistically difficult. And also seismic acquisition in both the on land as well as
01:50 the offshore.
01:51 Ma'am, is there a way you can give us an idea of what is the in place reserves in this area
01:57 and what kind of potential any of the exploration will yield?
02:03 So the acreages which we are currently holding, it has got the prognosticated resource, we
02:10 call it the resource, the prognosticated resource of the acreages that we are holding is more
02:15 than around out of 42 billion, it is holding around more than 14 to 15 billion tons approximately.
02:25 Because we are not only looking at the aerial expanse of the acreage, but the deeper layers
02:31 in which we had identified around 188 plays. So the shallower ones which are of around
02:39 3000 meters depth, a lot of extensive exploration has been carried out, we have discovered a
02:45 number of fields. But the deeper plays we are yet to probe and our focus is for imaging
02:52 better as well as drilling deeper. So that is what it is going to be.
02:57 Ma'am, give us a sense of, as you look at expanding your acreage as well as the exploration
03:06 volumes, what is the kind of capex that you have outlined for in the next 3 to 5 years
03:13 and where do we see the kind of output from ONGC in this period?
03:21 So in the next 3 years we have almost planned up to 30,000 crores of capex for exploration
03:28 alone in which for the current year as well as the next year we are going to go aggressively
03:34 since we have a lot of OLP commitments, the work commitments and data in airborne gravity,
03:45 then we have metallurgy, then we have a lot of seismic surveys, both of 2D as well as
03:53 3D which we have planned. So most of the capex is going to concentrate
03:58 in the next 2 years and then I think we'll, depending on the successes which we have,
04:04 then we'll plan our next campaign for exploration and also the number of wells that were being
04:10 drilled, that is going to increase because like I said we had OLP commitments which we
04:18 will be catering to, so more than 110 wells per year at least we would be doing and might
04:24 be going even higher as much as 125 or 130 wells per year.
04:31 So definitely that will bring in a lot of new areas which get appraised as well as of
04:39 course the increase in the capex is taken care of.
04:44 And that will be entirely taken care of by internal resources I imagine.
04:49 Yes, but we have the capability and the resources available within the organisation but we are
04:57 looking at partners, JV Ventures, if they can come in because exploration, number one
05:06 everywhere it's a cliché term, it's a risky business and we would like to also go for
05:10 as much risk mitigation and uncertainty removal once we are going for these high cost ventures.
05:18 We intend to go into the deep and the ultra-deep waters.
05:22 We already have acreages in Mahamadi and in Kaveri in Andaman but definitely these acreages
05:29 will see an increase and be for exploration or production.
05:33 Both of them are a little cost intensive.
05:37 So we are looking for partners in these sectors both in exploration as well as production.
05:44 Ma'am, one of the key things which are going around in the oil and gas space is about how
05:50 you can reduce your carbon footprint and become carbon net zero.
05:58 What is the kind of activities that ONGC is undertaking for that and with respect to carbon
06:05 capture as well, if you can give us some insights into what kind of projects you are undertaking
06:10 there?
06:11 Okay, so just a background right now, again this is an approximate estimate.
06:17 In India we have emissions to the tune of around 2,847 MMT of carbon dioxide emissions
06:28 of which 3% is the part which is coming out from the refineries and it is only 0.3% which
06:39 is from the upstream industry.
06:42 So basically the oil NOCs like ONGC, Oil India and Gale.
06:49 So even then what we have for ONGC's share it is 9 MMT COE equivalent which is the emission.
06:59 But this we intend to reduce over a period of next 15 years.
07:05 We have already declared scope one in 2030 and scope two net zero by 2038.
07:14 So we have charted what we need to cater to first and along with it we have also started
07:24 looking into the renewables.
07:26 A number of projects have been started.
07:28 We already have a vertical for renewables.
07:31 So it is right from solar to onshore wind, offshore wind.
07:39 Then we are also into CBC and biofuels.
07:44 Then also into geothermal.
07:47 We have thought of going for the pump storage.
07:52 Then green hydrogen.
07:54 So over the next 15, 16 years we have already charted out by each year how much are we going
08:02 to go towards getting net zero by 2038.
08:09 Along with it a lot of joint ventures have been signed.
08:12 We have MOU with NTPC.
08:16 We have MOU in geothermal with the government of Iceland, another company.
08:24 Then in biofuels we already have one for biotechnology we already have one small subsidiary with
08:34 Terry.
08:35 So the company is really and I think in the next three to five years exponentially this
08:43 space is going to grow.
08:46 And regarding CCUS we are actually more into the carbon capture and storage.
08:54 For the initial part we have MOU with Equinor regarding the EOR project in the state of
09:02 Gujarat for our Gandhar field which is a very immature field and the production levels have
09:07 gone down.
09:09 So the past year we were in talks with IOCL, Indian Oil Corporation, for sourcing the carbon
09:18 dioxide from the Koyali refinery and pumping it to these reservoirs which will bring in
09:26 an increased production.
09:27 I mean a recovery of around 3.4.
09:31 That is again an approximate estimate.
09:34 The cost of the project is a bit high at the moment for recovery costs.
09:42 But along with it we have also started mapping the reservoirs wherein we can take carbon
09:50 dioxide either from the refineries or other emission centers.
09:55 So a sort of a hub and source and sink hubs we have identified.
10:01 Along with it we have started doing the geochemical studies as well as the petrophysical studies
10:07 for subsurface as to how much it can hold and what will be the ceiling capacity for
10:12 these reservoirs once the CO2 is stored there.
10:16 And over a period of the next 100 or 200 years what will be the progress of the plume once
10:22 it is captured below the surface.
10:25 So for these we have a lot of software and digital models which are being prepared.
10:35 So the study is being done.
10:37 And of course ONGC is a part of the NITI IOC team which is formulating the entire CCUS
10:46 policies and regulatory along with the carbon market that is going to come up with the storage
10:53 and the capture of carbon.
10:55 So ma'am what is the blueprint in that case in the next five years or so as you look at
11:00 alternate source of energies where into hydrogen or renewable or offshore wind or onshore wind.
11:09 What could be the kind of contribution these alternate sources of energy bring in for ONGC?
11:16 See we are at the moment with our production hovering around 40 MMTOE.
11:24 We are catering to just around I would say 12 to 15 percent of the requirement.
11:30 And energy requirement as you will see are going to go up.
11:34 Along with it people are common man I would say.
11:38 We all have become conscious about the carbon footprints.
11:44 So one is the increase in production.
11:49 Of course we have a lot of new discoveries which are gas discoveries.
11:53 So again gas is going to be the transition from oil into the renewables.
12:00 So the gas production is going to increase in the next two, three years.
12:03 And the fields discovered by ONGC and on the verge of being discovered they are going to
12:09 be monetized.
12:10 We have fast track that a lot of already discovered fields will be coming on production.
12:17 Along with it, you know, the renewables which is in the next six years up to 30 I think
12:24 the capacity for the renewables or the contribution for renewables from ONGC would be to a tune
12:30 of almost 8 to 10 gigawatts.
12:33 So that is another added capacity in terms of the renewables or the energy requirement
12:39 or consumption which we are going to bring into the market or into the national grid.
12:46 And what about hydrogen because your plants in hydrogen are also big.
12:50 How do you plan to leverage this new area?
12:55 So hydrogen we have an MOU with Greenbook and we are looking at green hydrogen.
13:03 So along with biofuels, again, this is – we have a tie-up with the academy, the IITs and
13:11 other universities.
13:13 So when we are producing biofuels at the R&D stage we have noticed that the, you know,
13:21 there is sort of a byproduct in ammonia.
13:23 So these things are still at a laboratory stage.
13:26 But again, this is one area which will definitely grow.
13:33 And also there are talks at the very initial stage wherein we can go for pump storage.
13:40 The concept is that, you know, you utilize the sunlight, solar and then, you know, use
13:49 it for splitting, you know, electrolysis splitting and get the hydrogen.
13:55 And also for pump storage, you know, in the nighttime when we do the hydro power itself.
14:01 So this will also contribute.
14:04 And hydrogen is going to be a byproduct of a lot of biofuel as well as, you know, CBG
14:14 plants as well.
14:16 Ma'am, give us a sense of how the crude market is looking because you have a very close eye
14:21 to it.
14:22 We've been, last one, one and a half years, we've been going through a lot of volatility
14:26 in this market.
14:27 First it was through the Russia-Ukraine war which created a lot of supply disruptions
14:32 with respect to gas and crude.
14:35 Now we have the new Israel issue which has come in, which is the Israel-Hamas war which
14:41 is now threatening to even, you know, increase the kind of cost of maritime cost for transportation.
14:51 How do you see this entire scenario playing out with respect to crude and crude pricing?
14:59 See, this is, I mean, conflict of any kind, it does bring disruption.
15:06 Nobody thought that Ukraine war would start and suddenly it was there.
15:11 After COVID, people thought we would not require oil and, you know, oil in that much volumes.
15:18 And this, right from the '70s, we have been seeing that there has been a huge fluctuation
15:23 in the pricing of oil, especially.
15:28 The current conflict at the moment might, I mean, it hasn't affected us directly, but
15:36 there are two things.
15:38 One is that if this conflict gets resolved early, might be there will not be too much
15:43 of disruptions, but in case it lingers on and carries on for a longer period, of course,
15:50 then, you know, the geopolitics will start affecting the markets as well.
15:57 Who takes whose side and whose supply chains get disrupted?
16:01 We have a very, very good and a very cordial relationship with the oil-producing countries
16:07 in the Middle East.
16:08 So at the moment, the overall effect would be on what happens to the pricing globally.
16:16 But I think the early resolution of this conflict is best for the crude prices remaining stable.
16:24 Of course, I would say around 20 to 25 percent fluctuation in case the early resolve or,
16:36 you know, the early end of this conflict is seen.
16:41 So that much of a fluctuation we are expecting.
16:44 But for ONGC, you know, as a company, for the nation, it is going to be bad if the prices
16:52 really increase suddenly.
16:56 But for ONGC, I think because our cutoff is at $75, so we don't get much affected, even
17:05 in case the crude prices go very up.
17:11 So from a sourcing point of view, ma'am, has anything changed from the ONGC point of view?
17:17 No, not at the moment.
17:20 And I think the marketing guys would be the right ones because, yes, a lot of discussions,
17:26 a lot of deals, you know, they go, you know, at the background.
17:31 So at the moment, we don't see much disruption.
17:35 How do you look at overseas blocks because you have a sizable exposure to those as well
17:41 through ONGC Bidesh?
17:43 What kind of contribution will they bring in?
17:47 See, right now we are in around 19 countries.
17:51 I mean, ONGC Bidesh, we have acreages which are spanning in 19 countries, more than 35
17:57 blocks we have.
18:01 On that front, I think in the coming months or two, you would see an increase in our,
18:07 you know, equity oil share coming from new acreages.
18:12 Of course, the production from Colombia, which was exploration and a discovery that is also
18:19 coming up very well.
18:21 New wells are going to bring in more production adding on, and they are very good producers
18:28 in Colombia.
18:29 Similarly, things have improved in South Sudan.
18:33 So that also is going to, you know, add to the overall equity oil for ONGC as well as
18:42 ONGC Bidesh.
18:43 We are trying to look into different properties worldwide.
18:51 Some of the proposals are under study.
18:55 So I would like to comment more on that.
18:56 I think OVL would be best to give that answer.
19:02 My final question to you, you mentioned that all your future, most of the future explorations
19:08 which are coming in will bring in more gas.
19:11 As you see yourself, maybe in the next three to five years, as exploration picks up and
19:16 you start, you go commercial with it, what proportion of your revenues would come in
19:21 from gas and what would come in from oil?
19:26 So if you look at ONGC's total production, the contribution of gas is almost 50% even
19:34 today.
19:35 And in the near future, as I was saying, a lot of discoveries which remain unmonetized
19:41 because of the uneconomical gas prices, you know, at 1.79, it wasn't as attractive.
19:51 And with the increased gas prices going around 6.8 minimum, we are going to monetize this.
20:01 Also new gas discoveries as far as on land is concerned in the northeast, we are going
20:09 to increase the exploration as well as production there.
20:14 In the offshore, as you all might be aware, we have been drilling two deep water wells
20:20 in exploratory wells in Mahanadi.
20:24 And at the moment, the wells have not been completed, but whatever sections have been
20:30 logged, they really show very encouraging intervals and more than one zone in both of
20:36 the wells, which indicates gas.
20:39 So then Cauvery is another area where we are putting our bets on.
20:45 We have locations released.
20:47 We'll be going for drilling from November onwards.
20:51 KG, of course, as you know, we have production coming in from the much talked about 98 bar
21:01 2, KG 98 bar 2, oil as well as gas production.
21:06 Plus the shallow water discoveries in KG, which we have in the DSF from the DSF rounds.
21:14 So these are also more gas and oil prone.
21:17 So the contribution from gas definitely over the years, I think it is going to increase.
21:24 And we are looking at more and more discoveries in the coming years.
21:30 Ma'am, it was a pleasure talking to you today.
21:33 Thank you very much for joining us on BQ Prime.
21:35 Thank you for having me.
21:37 Thank you.
21:38 Thank you so much.
21:39 Nice to meet you.
21:40 Nice to meet you.
21:40 Thank you.
21:47 Thank you.
21:48 Thank you.
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